JOHN ABELA V GENERAL MOTORS CORP
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Michigan Supreme Court
Lansing, Michigan 48909
Chief Justice
Maura D. Corrigan
Opinion
Justices
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
FILED APRIL 7, 2004
JOHN and BARBARA ABELA,
Plaintiffs-Appellants,
v
No. 124375
GENERAL MOTORS CORPORATION,
Defendant-Appellee.
_______________________________
MEMORANDUM OPINION
This
case
poses
the
question
whether
the
federal
consumer product warranty act prohibits enforcement of a
binding arbitration agreement entered into by a person who
purchases a vehicle under a motor vehicle manufacturer’s
employee purchase plan.
The trial court ruled that such a
binding arbitration agreement is prohibited by the federal
act.
The
Court
of
Appeals
reversed
the
trial
court’s
decision, relying on the supposedly binding authority of
the decisions of two federal circuit courts of appeals.
We
affirm the decision of the Court of Appeals, but do so
because we are persuaded by the reasoning employed in the
federal decisions and not because we are bound by them.
Plaintiff John Abela purchased a 1999 Chevrolet truck
from a General Motors dealership under defendant’s employee
purchase plan, which offered him a discount because of his
wife’s employment with General Motors.
purchase
contract,
plaintiff
was
As part of the
required
to
sign
an
agreement requiring any warranty dispute to be settled by
binding arbitration.
number
of
problems,
The truck subsequently developed a
necessitating
costly
repairs.
Plaintiff and his wife brought suit under the Magnuson-Moss
Warranty-Federal Trade Commission Improvement Act (MMWA),
15 USC 2301 et seq., as well as two Michigan statutes.1
Defendant responded with a motion for summary disposition
pursuant to MCR 2.116(C)(7), claiming that plaintiffs had
agreed to arbitrate any claims they had against defendant.
The trial court denied defendant’s motion and granted
summary disposition in favor of plaintiffs pursuant to MCR
2.116(C)(9), for failing to state a valid defense.
trial
court
1
based
its
ruling
on
the
determination
The
that
The two statutes are not relevant to this discussion.
As the Court of Appeals correctly ruled in this case, the
Michigan warranties on new motor vehicles act, the “lemon
law,” MCL 257.1401 et seq., and the Michigan Consumer
Protection Act, MCL 445.901 et seq., are surmounted by the
federal arbitration act.
2
defendant’s program for binding arbitration was contrary to
the MMWA and, therefore, unenforceable.
The Court of Appeals reversed the ruling of the trial
court.
257 Mich App 513; 669 NW2d 271 (2003).
It noted
that two federal circuit courts of appeals had addressed
the question whether the MMWA bars compulsory arbitration
of written warranty claims, and that both had determined
that the MMWA does not preclude such arbitration, otherwise
enforceable under the Federal Arbitration Act (FAA), 9 USC
1 et seq.
Citing Schueler v Weintrob, 360 Mich 621; 105
NW2d 42 (1960), and Woodman v Miesel Sysco Food Co, 254
Mich App 159; 657 NW2d 122 (2002), the Court of Appeals
held that it is bound by the authoritative holdings of the
federal courts of appeals on a federal question where there
is no conflict among those federal courts on that question.
Because the only two federal circuit courts of appeals that
had ruled on the issue concluded that binding arbitration
agreements are not prohibited by the MMWA, the Court of
Appeals found that the trial court had erred in granting
plaintiffs’ motion for summary disposition and in denying
defendant’s motion for summary disposition.
We
disagree
with
the
Court
of
Appeals
basis
for
reversing the decision of the trial court. The Court of
Appeals concluded that it was bound by the decisions of the
federal circuit courts of appeals on questions of federal
3
law.
by
257 Mich App 523.
the
decisions
of
Although
the
state courts are bound
United
States
Supreme
Court
construing federal law, Chesapeake & O R Co v Martin, 283
US 209, 220-221; 51 S Ct 453; 75 L Ed 983 (1931), there is
no
similar
obligation
with
lower federal courts.
respect
to
decisions
of
the
Winget v Grand Trunk W R Co, 210
Mich 100, 117; 177 NW2d 273 (1920).
See generally 21 CJS,
Courts, § 159, pp 195-197; 20 Am Jur 2d, Courts, § 171, pp
454-455.
The
Court
of
Appeals
reliance
on
Schueler
v
Weintrob, 360 Mich 621; 105 NW2d 42 (1960), is misplaced.
In that case, we were faced with conflicting decisions of
lower federal courts and, of course, were “free to choose
the view which seems most appropriate to us.” 360 Mich 634.
However, that statement does not establish the converse—
that
where
there
is
no
such
conflict,
we
are
bound
to
follow the decisions of even a single lower federal court.
Although lower federal court decisions may be persuasive,
they are not binding on state courts.
Although the federal courts of appeals decisions are
not binding, we nevertheless affirm the decision of the
Court of Appeals.
We have examined the decisions in Walton
v Rose Mobile Homes LLC, 298 F3d 470 (CA 5, 2002), and
Davis v Southern Energy Homes, Inc, 305 F3d 1268 (CA 11,
2002), and find their analyses and conclusions persuasive.
Both decisions carefully examined the MMWA and the FAA, and
4
both concluded that the text, the legislative history, and
the purpose of the MMWA did not evidence a congressional
intent
under
the
FAA
to
bar
agreements
for
binding
arbitration of claims covered by the MMWA.
Persuaded by
these
appeals,
we
defendant
to
analyses
conclude
address
that
the
resolution
of
the
federal
plaintiffs’
warranty
process,
courts
agreement
claim
through
including
of
with
defendant’s
mandatory
dispute
arbitration,
is
enforceable.
The Court of Appeals result is affirmed on the basis
of the above analysis, and this matter is remanded to the
trial court for entry of an order for binding arbitration
pursuant to the agreement.
Maura D. Corrigan
Elizabeth A. Weaver
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
CAVANAGH, J.
I
would
opinion.
not
dispose
of
this
matter
by
memorandum
I would grant leave to consider further briefing
and argument.
Michael F. Cavanagh
Marilyn Kelly
5
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