Koons Ford v. Lobach

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Koons Ford of Baltimore, Inc v. Lobach, No. 66, September Term, 2006 HEADNOTE: FEDERAL ARBITRATION ACT MAG NUSO N-MOSS WARRANTY ACT BINDING ARBITRATION SINGLE DOCUMENT RULE According to the text of the MagnusonMoss Warra nty Act, 1 5 U.S.C . § 2301 et seq., claimants cannot be forced to re solve their claims through binding arbitration; the MM WA therefo re supersedes the Federal Arbitration Act, 9 U.S.C. § 1 et. seq, as to this point. This conclusion is based on the congressional intent at the time that the MMWA was enacted, as w ell as the FTC regulations promulgated in conju nction w ith the M MW A. In the Circu it Court for B altimore C ounty Case No. C05-4477 IN THE COURT OF APPEALS OF MARYLAND No. 66 September Term, 2006 ____________________________________ KOONS FORD OF BALTIMORE, INC. v. RAYMOND CALVIN LOBA CH, ET AL. ___________________________________ Bell, C.J. Raker *Wilner Cathell Harrell Battaglia Greene, JJ. ____________________________________ Opinion by Greene, J. Raker and Harrell, JJ., Dissent ____________________________________ Filed: March 20, 2007 *Wilner, J., now retired, participated in the hearing and conference of this case while an active membe r of this Court; after being recalled pursuant to the Cons titution, Article IV, Section 3A, he also participated in the decision and adoption of this opinion. This case is an appeal from the Circuit Court for Baltimore County. William and Raymond Lobach purchased a vehicle from Koons Ford of Baltimore, Inc. ( Koons Ford ) and, after discovering defects in that vehicle, filed a complaint against Koons Ford in the Circuit C ourt, alle ging, inter alia, that Koons Ford violated the Magnuson-Mo ss Warranty Act ( MM WA ), 15 U.S.C . § 2301 et s eq. Koo ns Ford co ntends that th e claim must be submitted to binding a rbitration bec ause, as part of the purchase, William and Raymond signed a buyer s order that contained a binding arbitration clause, and arbitration is ex pressly favored by the Federal Arbitration Act ( FAA ), 9 U.S.C. § 1 et. seq. Raymond argues that the MM WA p rohibits the fo rced resolu tion of claims through binding arbitration, and, therefore, the FAA does not a pply. He also claims that the arbitration clause must be include d in the w arranty do cume nt to be e nforce able un der the s ingle do cume nt rule. We conclude that, under th e MM WA, cla imants ma y not be force d to resolve their claims through binding arbitration because Congress expressed an intent to preclude binding arbitration when it enacted the MMWA. The FAA does not supersede the MMW A. Because of our resolution of this case, we need not a ddress the p arties dispute o ver the sing le document rule. FACTUAL AND PROCEDURAL BACKGROUND On October 20, 2001, William Lobach went to the Koo ns Ford d ealership on Security Boulevard in Baltimore, Maryland, with the intention of purchasing a vehicle. William s father, Raymond Lobach, accompanied William to the dealership. A sales representative presented William and Raymond with a 2001 Ford Escort, which William ultimately purchased. Raymond was a co-signer on the purchase. As part of the transaction, William and Raymond signed several documents, including a double-sided buyer s order; both men signed both sides of the buyer s order. The reverse side of the buyer s order contained the following provision: 10. WE AGREE THAT ANY CLAIM, DISPUTE OR CONTROVERSY DIRECTLY OR INDIRECTLY RELA TING TO THIS AGREEMENT OR TO ANY VEHIC LE INVOLVED HERE IN SHALL BE RESOLVED BY B INDIN G A R B I T R A TI O N T H R O U G H T H E N A T I O NA L ARBITRATION FORUM, UNDER ITS CODE OF PROCEDURE THEN IN EFFECT. RULES AND FORMS OF THE NATIONAL ARBITRATION FORUM MAY BE OBTAINED AND ALL CLAIMS SHALL BE FILED AT ANY NATIONAL ARB ITRA TION FOR UM OFF ICE, www.arbforum.com OR PO BOX 50191, MINNEAPOLIS , MINNESOTA 55405. THIS AGREEMENT IS MADE PURSUANT TO A TRANSA CTION INVOL VIN G INTERSTATE COMMERCE, AND SHALL BE GOVERNED BY THE FEDERAL ARBITRATION ACT, 9 U.S.C. SECTIONS 1-16. JUDGMENT UPON ANY AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE PART IES ACKNOWLEDGE THAT THEY HAVE KNOWINGLY WAIVED THEIR RIGHTS TO A JUDGE OR JURY TRIAL. NOTHING HEREIN SHALL BE CONSTRUED TO PREVENT EITHER PARTY S USE OF REPOSESSION, REPLEVIN, DETINUE OR ANY OTHER REMEDY, WITH OR WITHOU T JUDICIAL PROCESS, CONCERNING ANY COLLATERAL, SECURITY OR P R O P E R T Y I N T E R E S T R EL A T I N G TO T H IS AGREEMENT, NOR SHALL ANYTHING HEREIN BE CONSTRUED TO LIMIT ANY REMEDIES UNDER THE MARYLAND AUTOMOTIVE WARRANTY ENFORCEMENT ACT, OR THE MAGNUSON MO SS ACT. -2- On April 20, 2005, Raymond, individually, and as next of kin to William,1 filed a complaint in the Circuit Court for Baltimore County against Koons Ford. According to the complain t, after taking possession of the Ford Escort, the buyers discov ered defe cts in, and undisclosed prior damage to, the vehicle; specifically, water began leaking into the interior of the car and into the trunk. The comp laint alleged violation of the M MWA (Count I), 2 violation of the Maryland Co nsumer Protection A ct ( MCPA ) § 13-301(1) (C ount II), violation of the MCPA § 13-301(9) (Count III), breach of contract (Count IV), violation of the Maryland Com mercial Law C ode § 12-1005 (Count V), fraud (Count VI), and a derivative action against Suntrust Bank for all of the aforementioned claims (Count V II). On June 3, 2005, K oons Fo rd filed a Pe tition for Ord er to Arbitrate and Dismissal of Com plaint, requesting that t he C ircuit Co urt st ay the case so that the claims co uld be sub mitted to 1 William is now deceased. 2 Raymond alleged that Koons Ford violated the MMW A, the main issue now befo re this Court, by selling the vehicle in breach of the implied and express warranties of merchan tability and fitn ess. A sales representative and finance department representative at Koons Ford had both affirmatively represented that the [a]utomobile did not have any prior dama ge. In addition, Koons Ford presented Raymond and William with a U sed Veh icle Disclosure Form, in which it stated that the vehicle had never been used for commercial use. Raymond and William materially relied upon these assurances when purchasing the vehicle. A diagnostic evaluation of the vehicle, how ever, revealed that the vehicle had prior accident damage, which damaged the frame and caused it to leak. A service technician also informed Raymond that the odometer had been rolled back and tha t the car had other mechanical problems. The vehicle also had prior commercial use as a lease and rental vehicle. Acc ordingly, Raymond argues that the vehicle is unfit for ordinary purposes, that Koo ns Ford acted with actual malice and evil intent, and that Raymond continues to suffer harm as a result of Koons Ford s actions. This harm includes the increased interest and finance charges as a result of the inflated sales price, loss of use of the vehicle, and the money paid for repairs to the ve hicle. -3- arbitratio n pursu ant to the provisio ns in the buyer s o rder. A motions hearing was held on August 26, 2005, and the Circuit Court denied Koons Ford s petition without prejudice.3 On September 26, 2005, Koons Ford filed an Amended Petition for Orde r to Arbitrate and Dismissal o f Comp laint, with an a ttached aff idavit, requesting the same re lief as the orig inal petition. On March 10, 2006, the Circuit Co urt granted K oons Fo rd s Am ended P etition for O rder to Arb itrate as to Counts II through VI, and denied it with respect to Count I. 4 On April 10, 2006, Koons Ford filed its Notice of Appeal to the Court of Special Appeals.5 On September 13, 2006, while the appeal was 3 Koons Ford failed to attach an affid avit to its Petition For Order to Arbitrate. The court denied the Petition without prejudice with the right to re-bring it, as it [wa]s not suppo rted, the [ c]ourt [ wa]s n ot goin g to con sider it. 4 On April 5, 2006, Raymond Lobach filed a First Amended Complaint in this action. It contained only the MMWA count (originally Count I), and removed William Lobach as a plaintiff. 5 Koons Ford pres ented the f ollowing questions in its brief on ap peal: 1. May claims under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., be resolved through binding arbitration? 2. Does the failure to include an arbitration clause in the warranty document preclude binding arbitration of claims under the Magnuson-M oss W arranty A ct, 15 U .S.C. § 2 301 et s eq., when a valid arbitration provision is included in a related docume nt? Raymond Lobach presented th e followin g question s in his brief o n appeal: I. Whether courts should compel binding arbitration when consumers do not ha ve an y true notice or knowledge that they (contin ued...) -4- pending in the interm ediate appe llate court, this Court issued a writ of certiorari on its own motion . Koons Ford v. Lobach, 394 Md. 478 , 906 A.2d 942 (2006). DISCUSSION Koons Ford contends th at under the FAA , arbitration agre ements are enforcea ble absent a showin g that Congress intended to override the FAA by precluding binding arbitration for claims arising under a particular statute. Koons Fords explains that under the test articulated in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 227, 107 S. Ct. 2332, 23 37-38; 96 L. Ed. 2d 1 85, 194 (1 987), the co ngressiona l intent will be deducible from [the statute s] text or legislative history or from an inherent conflict between 5 (...continued) have entered into contracts that include a binding arbitration provision? II. Whether the [single] document rule bars Koons from compelling binding arbitration of the Lobach s claims? III. Whether in drafting the Magnuson-Moss Warranty Act (MMWA) it was the intent of Congress to prohibit binding arbitration? IV. Whether in evalua ting the FTC s implementing regulations, the courts shou ld apply the u nreasona ble interpretation or arbitrary or capricious standard of review? V. Whether the FTC regulations that prohibit binding arbitration of MMWA claims are u nreasona ble or arbitrary and capricious? VI. Whether the trial court committed error in ruling that the Lobach s MMW A claims could not be resolved through binding arbitration? -5- arbitration and the statute s underlying purposes. Koons Ford contends (1) that neither the text nor legislative history of the MMWA indicates that Congress intended to preclude binding arbitration, (2) that the MMW A explicitly allows informal dispute settlement procedures but that there is no mention that Congress intended binding arbitration to be considered an informal dispute settlement mechanism, (3) that binding arbitration does not conflict with the purposes of the MMW A because enforcement of a binding arbitration clause would have no e ffect on th e ability of a consumer to vindicate his or her substantive rights under the MMWA, (4) that there exist several cases to support this proposition, and (5) that the regulations, promulgated by the FTC pursuant to the MMWA, stating that any informal dispute settlem ent mech anism mu st not be bind ing, is unreas onable b ecause it relies on a conclusion, rejected by many courts, that binding arbitration is considered an inform al dispu te settlem ent me chanis m. 6 In addition, K oons Fo rd argues th at under the single docu ment rule, a w arrantor is required to include c ertain disclosu res pertaining to a warranty in one document but that the FTC regulations make no mention of the inclusion of binding arbitration clauses in that one docume nt. Instead, according to Koon s Ford, the re gulations req uire that the w arranty document contain [i]nformation respecting the availability of any inform al dispute settlement mechanism and binding arbitration is not an informal dispute settlement 6 Koons Ford cites Walton v. Rose Mobile Homes LLC, 298 F.3d 470 (5th Cir. 2002), Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002) and other federal cases for support. We discuss these cases infra. -6- mech anism. Raymond counters that the Circuit Court correctly denied arbitration of the MMWA claims. First, Raymond argues that no valid arbitration agreement exists since neither he nor William had notice or knowledge of the binding arbitration provision because they did not understand that they were forgoing their day in cou rt; the buyer s order was, in their view, a contrac t of adh esion. Raymond next contends that both the text and legislative history of the MMW A evince Congre ss s intent to preserve the rights of consumers to seek judicial redress on warranty claims and therefore ban binding arbitration of claims under the MM WA . Furthermore, according to Raymond, because Congress intended to preclude a waiver of judicial remedies, the FAA is inapplicable to MMWA claims and the presumption of arbitrability is overridden. Raymond notes that althou gh the M MW A does n ot explicitly mention the words binding arbitration, at the time of the MMWA s passage, binding arbitration was not widely used in consumer contracts so there was no need at the time for Congress to expressly identify it. In addition, Raymond states that it is not at all clear that arbitration was perceived as a formal dispute resolution mechanism a t the time of its enactment in 1974 . . . [an d] the mod ern view of arbitration cannot be used to glean Congress s intent in enacting the MMWA more than thirty years ago when binding arbitration was considered much different. Further, Raymond avers that the FAA was not as broadly applicable at the time of the M MWA s enactment; the Supre me Court -7- subseque ntly extend ed the m eaning of the F AA. Raymond also posits that there exists an inherent conflict between binding arbitration and the underlying principles of the MMWA because the MM WA se eks to prote ct consum ers. As suc h, Raymon d argues th at courts should not circum vent the righ t of consume rs to take their M MW A claims to court. Raymond also argues that those courts that have compelled arbitration of MMWA claims have wrongly excluded binding arbitration from the MMWA s definition of an informal dispute resolution mechanism and also do not afford the FT C regulatio ns the we ight to which they are entitled. Raymond explains that the F TC has interpreted the MMWA to preclude the enforcement of binding arbitration clauses in written warranties covered by the MMWA and that t his p reclu sion is no t arbitrary or capricio us an d is re ason able . Las tly, Raymond argues that the single document rule bars Koons Ford from compelling arbitration of the claims because Koons Ford included the arbitration clause on the reverse side of a buyer s order, and not on the warranty itself, as is required by that rule. Basic Contract Principles At the outset, we reject Raymond s claim that neither he nor William had notice or knowledge of the bind ing arbitration provision o r that they were forgoing their ability to bring a civil suit because the buyer s order constitutes a contract of adhesion. The pertinent portion of the provision on the buyer s order stated: W E AGR EE TH AT AN Y CLA IM, DISPUTE OR CONTROVERSY DIRECTLY OR INDIRECTLY RELA TING T O THIS AGRE EMEN T OR T O AN Y VEH ICLE INV OLVE D HER EIN SHALL BE RESOLVED -8- BY BINDING ARBITRATION . . . . THE PARTIES ACKNOWLEDGE THAT THEY HAVE KNOWINGLY WAIVED THEIR RIGHTS TO A JUDGE OR JURY TRIAL. The applicable language wa s clear and compre hensible and appe ared in the buyer s order in capital letters and in bold print. Moreover, both Raymond and William signed their names below the arbitration p rovision, attestin g to their unders tanding of wh at they had read. We hold that Raymond and William may not evade their obligations simply because they chose to not re ad wh at they had signed . This conclusion is consistent with the pre cedent of this Court. W e explained recently in Holloman v. Circui t City Sto res, Inc., 391 Md. 580, 595, 894 A.2d 547, 556 (2006), that under Maryland la w, a party wh o signs a co ntract is presumed to have read and understood its terms and as such will be bound by its execution. In addition, in Walther v. Sovereign Bank, 386 M d. 412, 444 , 872 A.2d 735, 754 (2005), w e stated that [i]f petitioners did not [read the agreement] befo re they signed the agreement, they have no person to blame but themselves. As expressed earlier in our d iscussion, w e are loath to rescind a conspicuous agreement that was signed by a party whom now, for wha tever reason , does not d esire to fulfill tha t agreeme nt. This principle is not a new principle; it has been long echoed in this Court. In Binder v. Benson, 225 M d. 456, 461 , 171 A.2d 248, 250 (1961), w e explained that [i]t is true that the usual ru le is that if there is no fraud, duress or mutual mistake , one who has the capacity to understand a written document who reads and signs it, o r, without rea ding it or having it read to him, signs it, is bound by his signature as to all of its te rms. -9- Raymond has not alleged fraud, duress, or mutual mistake in this case. Nor has he alleged that he or William lacked the capacity to understand the written buyer s order that both of them signed. He simply contends that he and William are not bound by their signatures. We disagre e. Another provision of the buyer s order provides in relevant part, NOR SHALL ANYTHING HEREIN BE CONSTRUED TO LIMIT ANY REMEDIES UNDER . . . THE MAGNUSON MOSS AC T. We follow the obje ctive law of con tract inter pretatio n. Taylor v. Nations Bank, N.A., 365 M d. 166, 178, 776 A.2d 645, 653 (2001). In Gen. Motors Accepta nce Cor p. v. Danie ls, 303 M d. 254, 261 , 492 A.2d 1306, 13 10 (1985 ), we said: A court construing an agreem ent under th is [objective ] test must first determine from the language of the agreement itself what a reasonable person in the position of the parties would have meant at the time it was effectuated. In addition, when the language of the contract is plain and unamb iguous there is no room for construction, and a court must presume that the parties meant what they expressed. In these circumstances, the true test of what is meant is not what the parties to the contrac t intended it to m ean, but w hat a reason able person in the position of the parties w ould have thought it m eant. Consequently, the clear and unambiguous language of an agreement will not give away to what the parties thought that the agreement meant or intended it to mean. We interpret the above referenced contract provision, by its terms, to mean that claims filed under the MMWA are exempt from the restrictive provisions of the buyer s order. Thus, as a reasonable interpretation of the contract between the parties, Raymond may not be precluded from pu rsuing his claims for b reach of w arranty in a cou rt of law. O ur analysis does not stop here. Even though we think the MMWA allows for non-binding, as opposed -10- to binding arbitration, we must determine whether the FAA trumps the MMWA and whether the binding arbitration provision contained in the buyer s order is nonetheless enforceable. Evolution of The Federal Arbitration Act The issues now before us involve the interplay between two Federal statutes, the FAA and the MMWA. We must theref ore examine the F AA, to determine whether, and to what extent, that statute affects our analysis of the MMWA. The FA A provides: A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contra ct. 9 U.S.C. § 2. Congress enacted the FAA in 1925 [t]o make valid and enforceable written provisions or agreem ents for arb itration of disp utes arising o ut of contra cts, maritime transactions, or commerce among the States or Territories or with foreign nations. United States A rbitration Act, ch . 213, 68 P.L. 40 1, 43 S tat. 883 ( 1925) . Prior to the 1980s, the FA A was w idely inapplicable to claims that were based upon the assertion of statutory, rather than contractual, claims. For example, in Wilko v. Swan, 346 U.S. 427, 74 S . Ct. 182, 98 L. Ed. 16 8 (1953), the Supreme Court analyzed whether a conflict existed between the FAA and the Securities Act of 1933 to determine whether an agreement to arbitrate issues arising under the Securities Act was valid. The Supreme Court evaluated -11- both statutes and stated: Recognizing the advantages that prior agreements for arbitration may provide for the solution of commercial controversies, we decide that the intention of Congress concerning the sale of securities is better carried out by holding invalid such an agreement for arbitration of issues arising under the [Securities] Act. Wilko, 346 U.S. at 438, 74 S. Ct. at 188-89, 98 L. Ed. at 177. Th e Court he ld that the arbitra tion provisio n in the parties agreements was void under the Securities Act because the arbitration provision deprived Petitioner of his rights and forced him to surrender the advantages that the Securities Act gave him as the buyer in the tra nsactio n. See also NLRB v. Radio & Television Broad. Eng rs Union, 364 U.S. 573, 581-82, 81 S. Ct. 330, 336, 5 L. Ed. 2d 302, 309 (1961) (concluding that Congress expressed a clear preference for a Board to resolve NLRB claims, as opposed to resolution by compelled arbitration, and that, therefore, the Court must respect this policy preference). In the 1980s, the Supre me Court beg an to take a different app roach, giving more weight to the FA A and lo oking m ore favora bly upon com pelled arbitratio n. In 1983 , in Moses H. Cone M em l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765, 785 (1983), the Court stated that questions of arbitrability must be addressed with a hea lthy regard for th e federal p olicy favoring arbitration . . . . The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. In 1985, in Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S. Ct. 1238, 1242-43, 84 L. Ed. 2d 158, 165, -12- the Court echoed its prior position, concluding that [t]he preeminent concern of Congress in passing the [FAA] was to enforce private agre ements into which parties had entered, and that concern requires that we rigorously enforce agreements to arbitrate, even if the result is piecemeal litigation, at least absent a countervailing policy manifested in another federal statute. Also in 1985, in Mitsubishi Motors Corp. v. Soler Chrys ler-Plym outh In c., 473 U.S. 614, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (19 85), the Supreme C ourt made clear that the FA A s mand ate of a rbitration also ap plied to c auses o f action created by statute. The Supreme Court has since b een reluctan t to find that a s tatute s purpo se conflicts with arbitration because it has determined that Congress enacted the FAA to establish[] a federal policy favoring arbitration and further that [t]he Act was intended to revers[e] centuries of judicial hostility to arbitration ag reements, b y plac[ing] arb itration agreem ents upon the same footing as o ther contracts. McMahon, 482 U.S. at 225-26, 107 S. Ct. at 2337, 96 L. Ed. 2d. at 193 (citations omitted). In McMahon, the Suprem e Court he ld that to defeat application o f the FA A, the mo ving party must demonstrate that Congress intended to make an exception to the [FAA] for claims arising under [a competing statute] . . . an intention discernible from the text, history, or purposes of the statute. McMahon, 482 U.S. at 227, 107 S. Ct. at 2338, 96 L. Ed.2d. at 194. This test has become commonly known as the McMahon test. The Supreme Court has utilized this test to determine whether other statutes preclude binding arbitration and supersede the FAA; the Court has strongly favored arbitration. The Supreme Court recently stated that even claims arising under a statute -13- designed to further important social policies may be arbitrated because so long as the prospective litigant effectively may vindicate his statutory cause of action in the arbitral forum, the statute serves its function. Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 90, 121 S. Ct. 513, 521, 148 L. Ed. 2d 373, 383 (2000) (citations omitted). The Supreme Court has not yet specifically applied this line of reasoning to the MMWA. In addition, prior to 1984, when the Supreme Court decided Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984), the FAA was considered by many courts and com mentators to be only proce dural in nature and applicable only in federal courts. It allowed a party to a written arbitration agreement involving either interstate commerce or a maritime transaction to enforce that agreement in federal court, so long as that court had jurisdiction. In Southland, the Supreme Court determined that the FAA rests on the authority of Congress to enact substantive rules under t he Co mmer ce Clau se, and that, as a result, it was enforceable in state courts, as well as federal courts, under the Supremacy Clause. Southland, 465 U.S. at 11, 104 S. Ct. at 858, 79 L. Ed. 2d at 12. Justice O Connor dissented, arguing tha t Congres s enacted th e FAA pursuant to its power over the federal courts, and not the Commerce power, and that the legislative history of the FAA makes clear that Congress intended the FAA to be procedural in nature, and applicable only in federal courts. Southland, 465 U.S . at 11, 104 S . Ct. at 858, 79 L. Ed. 2d a t 12 (O Connor, J., dissenting). T he Hou se report up on whic h she relied s tates, in pertinen t part: The matter is properly the subject of [f]ederal action. Whether an agreement for arbitration shall be enforced or not is a -14- question of procedure to be determ ined by the law court in which the proceeding is brought and not one of substantive law to be determined by the law of the forum in which the contract is made. Before such contracts could be enforced in the [f]e deral cou rts, therefore, this la w is essen tial. H. R. Rep. No. 96, 68th Cong ., 1 st Sess., 1 (1924) (emph asis added). The Magnuson-Moss W arranty Act Congress enacted the MMWA in 1975 [t]o provide minimum disclosure standards for written consumer product w arranties; to define minimum Federal content standards for such warranties; to amend the Fe deral Trad e Comm ission Act in order to imp rove its consumer protection activities; and for other purposes. Magnuson-Moss Warranty Act, 93 P.L. 637, 88 Stat. 2183 (1975). Congress also intended the MMWA to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products. 15 U.S.C. § 2302(a). In furtherance of these goals, § 2310(d)(1) of the MMWA gives consumers a statutory private right of action, in either state or federal court, if they are damaged by the failure of a supplier, warrantor, or service contractor to com ply with a ny obliga tion un der this tit le [15 U .S.C. § 2310 et. seq.], or under a written warra nty, implie d warr anty, or ser vice co ntract . . . . The main provision of the MMW A, 15 U.S.C. § 2310, entitled Remed ies in consum er disputes states, in pertinen t part: (a) Informal dispute settlement procedures; establishment; rules setting forth minimum requirements; effect of compliance by warrantor; review of informal procedures or implementation by Commission; application to existing informal procedures. -15- (1) Congress hereby declares it to be its policy to encourage warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms. (2) The Commission sh all prescribe ru les setting forth minimum requirements for any informal dispute settlement procedure which is in corporated into the terms of a written warranty to which a ny provision o f this title [15 USCS §§ 2301 et seq.] applies. Such rules shall provide for participation in such procedure by independent or governmental entities. (3) One or mo re warrantors may establish an informal dispute settlement procedure which meets the requirements of the Commission's rules un der paragraph (2). If-(A) a warrantor establishes such a procedure, (B) such procedure, and its implementation, meets the requirements of such rules, and (C) he inco rporates in a w ritten warran ty a requirement that the consumer resort to such procedure before pursuing any legal remedy under this section respe cting such warranty, then (i) the consumer may not commence a civil action (other than a class action) und er subsectio n (d) of this section unless he initially resorts to such procedure; and (ii) a class of consumers may not proceed in a class action under subsection (d) except to the extent the co urt determin es necessa ry to establish the representative capacity of the named plaintiffs, unless the named plaintiffs (upo n notifying the defendant that they are named plaintiffs in a class action w ith respect to a warranty obligation) initially resort to such procedure. * * * * (4) The C ommissio n on its own initiative may, or upon written complaint filed by any interested person shall, review the bona fide operation of any dispute settlement p rocedure r esort to which is stated in a w ritten warran ty to be a prereq uisite to pursuing a legal remedy under this section. If the Commission finds that such procedure or its implem entation fails to comply with the requirements of the rules under paragraph (2), the Commission may take appropriate remedial action under any authority it may have under this title [15 USC S §§ 2 301 et s eq.] -16- or any other provision of law. (5) Until rules under paragraph (2) take effect, this subsection shall not affect the validity of any informal dispute settlement procedure respecting consumer warranties, but in any action under subsection (d), the court may invalidate any such procedure if it finds that such p rocedure is unfair. To encourage settlemen t of disputes in a mann er other than by civil lawsuits, the MMWA allows warrantors to include a provision for an informal dispute settlement procedure for breach of warranty claims and to mandate that consumers resort to such a procedure before brin ging their case to court. 15 U.S.C. § 2310(a). Congress never defined informal dispute settlem ent proced ure but it left the power to the FTC to devise minimum requirements for any informal dispute settlement procedure incorporated into the written war ranty. In response, th e FTC p romulgate d regulation s setting forth what must be contained in a written warranty s terms, in addition to how the informal dispute settlement procedures shall work. In 16 C.F.R. § 703.1, the FTC defines Mechanism as an informal dispute settlement proc edure w hich is inc orpo rated into the te rms o f a w ritten war ranty. . . . In 16 C.F.R. 703.5, the FTC explains how the Mechan ism will operate and states explicitly that [d]ecisions of the M echan ism sha ll not be l egally bin ding on any perso n. . . . See also 40 Fed. Reg. 60168, 60211 (1975) (stating that [t]here is nothing in the Rule which precludes the use of any other remedies by the pa rties follo wing a Mech anism d ecision . . . . reference within the written w arranty to any binding, non-judicial remedy is prohibited by the Rule and the Act ). Therefore, according to the FTC, the MMWA does not allow for the resolution -17- of claims through forced or binding arbitration. The Su preme C ourt has stated : When a court revie ws an ag ency s constru ction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congre ss has directly spoken to the precise question at issue. If the intent of C ongress is clear, that is the end of the matter; for the court, as well as the a gency, must give effect to the unambiguously expressed intent of Congress. [] If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impos e its own construction on the statute,[] as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agenc y s answer is based on a permissible construction of the statute.[] Chevron U.S.A ., Inc. v. N atural R es. Def. C ouncil, I nc., 467 U.S . 837, 842-4 3, 104 S. C t. 2778, 2781-82 , 81 L. Ed.2d 694 , 702-03 (1984)). Under the test announced in Chevron, we must therefore determine whether Congress evinced its intent to preclude, or allow, resolution of MMWA claims through binding arbitration, and, if not, whether the FT C s interpretation is a permissible construction of the MMWA. This matter is one of first impression for this C ourt and one in which the re exists a vast disparity of opinions among the jurisdictions in this country. As stated above, the Supreme Court has not yet addressed this issue and, at the current time, only two federal appeals courts, the United States Courts of Appeal for the Fifth and Eleventh Circuits, have addressed this issue . The various federal an d state courts th roughou t this country rem ain divided. -18- As Koons Ford sets forth, the United States Co urt of Appeals for both the Fifth and Eleventh Circuits have held that MMWA claims are subject to binding arbitration, based on the McMahon factors mentioned supra. See Walton v. Rose Mobile Homes LLC, 298 F.3d 470 (5th Cir. 200 2); Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 200 2). The court in Walton examin ed the text of the MMW A, its legislative history, and whether arbitration conflicted with the MMWA s purpose, in accordance with McM ahon, and concluded that the text, legislative history, and purposes of the MMW A do not evince a congressional intent to bar arbitration of MMWA written warranty claims. Walton, 298 F.3d at 478. In examining the MMWA s text, that court stated that it does not specifically address binding arbitration, nor does it specifically allow the F TC to de cide whe ther to permit or to ba n bindi ng arbi tration. Walton, 298 F.3d at 475. As to the legislative histo ry, the court held that it does not specifically discuss the availability of arbitration, nor does it define or shed light on the meaning of informal dispute settlement procedure. Walton, 298 F.3d at 476. Notwithstanding, the Walton court determ ined that under the MMWA, when a warrantor creates an in formal disp ute settlemen t procedure , the warran tor is permitted to include language in the warranty that would require a consumer to resort to this settlement procedure before pursuing a legal remed y; [y]et binding arb itration gener ally is understood to be a substitute for filing a lawsuit, not a prerequisite. Walton, 298 F .3d at 47 5. The court therefore concluded that binding arbitration falls outside the bounds of the MMWA and of the FTC s power to prescribe regulations. Walton, 298 F.3d at 476. La stly, the court -19- examined the MMWA s purposes and determined that there did not exist any inherent conflict between arbitration and these purposes. Consumers can still vindicate the ir rights under warranties in an arbitral forum. Warranties can provide adequate and truthful information to consum ers, while also requiring binding arbitration. Arbitration is not inherently unfair to consumers. Walton, 298 F.3d at 478. Similarly, the court in Davis determined that neither the text nor legislative history of the MMW A expressly prohibited binding arbitration and further concluded that the purpose of the M MW A did n ot conf lict with the FA A. Davis, 305 F.3d at 1274-77. The court next examined the FTC regulations and concluded that the FTC s position that it would not develop guidelines that would require consumers to commit themselves to resolve any difficulties in a binding, but non-judicial, proceeding was unreasonable. The court stated that this interpr etation is no longer valid based on the Supreme Court s abandonment of its hostile attitude towards arbitration. In light of the Supreme Court s acknowledgment and continual enforcement of the strong federal policy toward arbitration, w e conclud e this rationale to be based on an impermissible construction of the statute. Davis, 305 F .3d at 1280. Davis further dete rmined tha t arbitration did n ot constitute an inform al dispute mechanism because th e FTC d efined suc h a mech anism as only a precurs or to litigation and never binding and bind ing arbitration is understood gen erally to be a substitute for litigation. Davis, 305 F.3d at 1274. The court therefore held that [a]fter a thorough review of the MMWA and the FAA, combine d with the strong f ederal policy fa voring arb itration, we h old -20- that written warranty claims arising under the Magnuson-Moss Warranty Act may be subject to valid b inding arbitratio n agree ments. 7 Davis, 305 F .3d at 12 80. Conversely, there exists support for Raymond s contention that the MMWA constitutes an exception to the FAA and, therefore, claimants cannot be forced to resolve their claims th rough bindin g arbitra tion. Chief Judge King dissented in Walton to espouse this view. He examined the congressional intent at the time of the MMWA s enactment and determined that the congressional intent was unclear as to binding arbitration - that Congress did not speak directly to the issue before u s today. He explained, how ever, that he was not surprised about the lack of discussion since the Supreme Court expanded the FAA after the MMWA was written and it is therefore more broadly applicable today. In reviewing the FTC regulations, Chief Judge King determined that the FTC s construction of the statute is eminently reasonable, and therefore that forced, binding arbitration is impermissible under the MMWA. Walton, 298 F.3d at 492 (King, C.J. dissenting). He therefore concluded that the Dis trict Cou rt s judg ment re fusing to com pel arbit ration o f the cla ims wa s correc t. Id. Other courts also oppose Walton and Davis and support Raymond s contentions. For example, the United States District Court for the Northern District of Ohio in Rickard v. Teynor s Homes, Inc., 279 F. Su pp.2d 91 0, 921 (N .D. Ohio 2 003), agree d with the Walton dissent s reasoning, and explained that the creators of the FAA understood that arbitration 7 We also acknowledge that this conclusion has been echoed in several other jurisdictions. See, e.g. Dombrowski v. Gen eral M otors C orp., 318 F. Supp.2d 850, 851 n. 1 (D. Ariz . 2004); Stacy David, Inc. v. Consuegra, 845 So.2d 303, 306 (Fla. Dist. Ct. App. 2003); DaimletChrysler Corp. v. Yaeger, 818 N .E.2d 5 27, 534 (Ind. C t. App. 2 004). -21- agreeme nts historically were entered into in the commercial or contractual context where the parties were sophisticated and deliberately desired to avoid the expense and delay attendant on the civil trial system, and that it was the Supreme Court that later decided to expand the scope of the FAA beyond that anticipated by Cong ress at the time of the M MWA s enactmen t.8 That court continued , notwithstanding the Su preme Cou rt s recent expansion of the FAA, the statute s liberal policy should not encroach on or undermine the manifest pro-consumer policy of the MMWA and concluded that the MMWA precludes the enforcement of binding arbitration agreements for claims under written warranties, because 8 In support, that court cites several journal articles: See e.g., Lar ry J. Pittman, The Federal Arbitration Act: The Supreme Court's Erroneous Statutory Interpretation, Stare Decisis, and a Proposal for Change 53 Ala. L. Rev. 789, 829 (2002) (finding that the drafters and supporters of the FAA envisioned that the FAA should apply only to arbitration agreeme nts between merchan ts who ha ve freely entere d into such agreements, and that the FAA does not apply to adhesion arbitration agreements between powerful sellers and weak buyers ); Sen. Rus sell D. Feing old, Policy Essa y: Mandatory Arbitration: What Pr ocess is Due? 39 Harv. J. on Legis. 281, 289 (stating that C ongress d id not origina lly intend the FAA to enable stronger parties to force we aker parties into binding arbitration ); Jean R. Sternligh t, Panacea o r Corpora te Tool? Debunking the Supre me Cou rt's Preference for Binding Arbitration 74 Wash. U. L. Q. 637, 647 (1996) ( M ost commentators have concluded that the FAA was envisioned as applying to consensual transactions between two merchants of roughly equal bargaining power, and not necessarily to transactions between a large merchant and a much weaker and less know ledgea ble con sumer . ). Rickard, 279 F. Supp.2d at 921 n. 12. -22- of the F TC re gulation s. Rickard, 279 F . Supp .2d at 92 1. The court in Brown e v. Kline T ysons Im ports, Inc., 190 F. Supp. 2d 827 (E.D. Va. 2002), went further, finding that Congress intended to preclude binding arbitration for claims under the MMWA , in addition to the FTC s regulations precluding binding arbitration. That court stated: A clear reading of the statute evinces Co ngress s intent to encourage informal dispute settlement mechanisms, yet not deprive any party of [his or her] right to have [a] written warranty dispute adjudicated in a judicial forum . Browne, 190 F. Supp. 2d at 831. The court therefore determined that, under the MMW A, [a]ny informal dispute settlement procedure that may be utilized to resolve written warranty disputes under the MMWA must be a non-binding mechanism, which serves as a prerequisite, and no t a bar, to r elief in c ourt. Id. The Browne court also held that the FTC regulations further demonstrate that the MMW A prohibits binding arbitration of claims.9 We reject Koons Ford s interpretation of the MMWA. In addressing the first prong of the Chevron test, we agree with Raymond, and the Browne court, that Congress expressed an intent to preclude binding arbitration of claims under the MMW A, a conclusion which is further supported by the FTC regulations. As Walton and Davis explain, binding arbitration is no longer a precursor to litigation but is, instead , a substit ute for l itigation . Walton , 298 9 See also Pitchford v. Oak wood Mob ile Hom es, Inc., 124 F . Supp . 2d 958 , 962-65 (W.D. Va. 2000) (finding that the MMWA and FTC s regulations preclude binding arbitration). Although Rickard, Browne, and Pitchford are the decisions of nisi prius courts, we mention those cases because their analysis is persuasive and consistent, at least in part, with our own interpretation of the MMWA. -23- F.3d at 475 (citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (198 5)); Davis, 305 F .3d at 12 74. Davis and Walton use this distinction to conclude that Congress must not have addressed whether binding arbitration clauses are enforceable and, therefore, the FAA must control. Notwithstanding the support for Koons Ford s position, we are not convinced that these cases are dispositive because they are all based upon McMahon and the Supreme Court s interpretation, and expansion, of the FAA nearly a decade after the M MW A wa s enacte d. Congress s Intent to Preclude Binding Arbitration To determine whe ther Congress add ressed the issue now before us, we m ust evaluate the plain langu age of the text of the M MW A to asce rtain the congressional intent at the time that Congress enacted the statute. See Walzer v. Osborne, 395 Md. 563, 571-74, 911 A.2d 427, 431-34 (2006 ) (outlining the rules of statutory interpretation); Public Citizen v. United States Dep t of Justice, 491 U.S . 440, 454-5 5, 109 S. C t. 2558, 2567, 105 L. Ed. 2d 377, 392 (1989) (explaining that the plain language of a statute is ordinarily the most reliable source for interpreting the meaning of a statute and that looking beyond the plain language becomes permissible only in situations where the plain meaning seems inconsistent with the congressional intent). Based on the clear language of the MMWA, we conclude that Congress expressed an intent to preclude the enforcement of binding arbitration clauses under the MMWA.10 10 We acknowledge that Congress did not include in the text of the MMWA any (contin ued...) -24- Congress made clea r, in § 2310 (a)(3)(C), tha t consum ers must reta in the ability to adjudicate their claims in court, even if they must first resort to informal dispute settlement procedures. Congress explained that consumers may be required to participate in the informal disp ute settlemen t mec hanisms establish ed by warrantors before pursuing other legal remedies. Congress stated explicitly that a consumer may be forced to submit to an informal dispute resolution mechanism before pursuing any legal remedy under this section respecting such war ranty (emphasis added ). The language of 15 U.S.C. § 23 10 therefore makes clear that the warrantor may establish informal dispute settlement mechanisms that 10 (...continued) language expressly identifying binding arbitration, as Koons Ford sets forth. Notwithstanding this acknowledgment, we do not conclude that the lack of such language means that Congress did not speak directly to the issue at hand; there existed no reason for Congress to include such langua ge in 1975. Neither McMahon nor the cases discussed supra, in which the Suprem e Court ex panded th e applicability of the FAA, had been decided in 1975 when Congress enacted the MMWA. Therefore, when Congress discussed informal dispute settlement m echanism s, it was doin g so based on the law at that time; in 1975 the FAA was not as broadly applicable and arbitration was not as formal. Binding arbitration would not become an issue for Congress u ntil the mid 1980 s w hen the Suprem e Court decided that the FAA was more broadly applicable and arbitration became a substitute for litigation. See Walton, 298 F.3d at 484 (King, C.J. dissenting) (stating that the formality of arbitration proceedin gs have in creased no tably in the latter half of the twentieth c entu ry, particularly in the period since the Su preme C ourt revitalized the FAA by clarifying its applicability to statutory claims in the late 1980s ). Furthermore, as stated supra, prior to 1984, many courts and commentators believed that the FAA applied only to federal cases. Given that in diversity cases, there must be diversity of citizensh ip and a sign ificant amo unt in contro versy, the FA A wou ld not have applied to very many warranty disputes, like the one at issue here, and therefore would not have been a concern for Congress when it enacted the MM WA. Un der Southland, however, because of the impediments to diversity jurisdiction, most consumer contract cases involving the FAA now arise only in state courts. Congress could not have contemplated this change in 1975, when it enacted the MMWA. -25- consumers must use to resolve their claims under the MMWA, but that consumers cannot be forced to resolve their claims through an informal d ispute resolu tion mech anism that is binding. Consumers may be required by warranto rs to participate in a non-binding informal dispute settlement mechanism, but only as a prerequisite; afterwards, consumers may pursue other legal remedies. 15 U .S.C. § 2310(a)(3)(C). Furthermore, the legislative history of the MMWA also reveals the congressional intent to prevent consumers from being forced into binding arbitration because such a resolution would constitute a sub stitute for litigation. The House Report on the MMWA states expressly that [a]n adverse decision in any inform al dispute settlement procedu re would not be a bar to a civil a ction on the wa rranty inv olved in the pro ceedin gs . . . . H.R. Rep. No. 93-1107 (1974). Moreover, the Conference Committee Report explains that consumers can still pursue all alternative av enues of redress if th ey choose n ot to participate in an inf ormal d ispute se ttlemen t proced ure. S. Conf. Rep. N o. 93-1408 (197 4). We agree with Davis and Walton that because binding arbitration is now considered a substitute for litigation, it would not fit within C ongress s definition o f an inform al dispute settlement mechanism that would p recede oth er legal aven ues. Notw ithstanding th is determination, we do not agree with Davis or the Walton majority s conclusion that Congress must therefore not have intended to preclude binding arbitration. If Congress had enacted the MM WA in the 19 90s, then such a conclusion could be permissible, but it was written prior to the expansion of the FAA, in 1975. We therefore interpret the language contained -26- in the MMWA and the language in the House and Senate reports as clear evidence of Congress s intent to protect consumers from the forced resolution of claims through binding arbitration, as it exists today as a substitute for litigation. The MM WA is pro-co nsumer, it seeks to protect consumers from deception, it gives consumers a statutory private right of action in state or federal court if they are damaged by the failure of a supplier, warrantor, or service contractor, and, although Congress allows for the resolution of claims through informal dispute settlement mechanisms, it stated clearly that those mechanisms precede the other legal remedies provided for under the MMWA. When Cong ress ena cted the MM WA , Wilko was the precedent, and the Supreme Court determined in Wilko that the claimants could not be forced to arbitrate their claims, despite the existence of the FAA, because arbitration would disadvan tage the consume r. Wilko, 346 U.S . at 438, 74 S . Ct. at 188-89, 98 L. Ed. at 177. In a ddition, Raymond s contention in his brief is therefore correct - that [w]hat was once an informal means of dispute resolution h as now b ecome m ore form al. Thus, the modern view of arbitration cannot be used to glean Co ngress s inten t in enacting the MMWA more than thirty years ago when binding arb itration was c onsidered something much dif ferent. Because arbitration was a precursor to litigation in 1975 and the precedent at the time that Congress enacted the MMWA was th at arbitra tion disa dvanta ged the consu mer, w e hold that Congress did not intend for consumers to be forced to resolve their MMWA claims through binding arbitration, as it stand s today. Congress likely intended to include arbitration, as it existed -27- in 1975, as an informal dispute settlement procedu re because consu mers could still pursue a civil action. It is clear, however, that Congress intended to preclud e arbitration in its current form, based o n the language in § 2 310 (a). In construing a statute, [w]e avoid a construction of the statute that is unreasonable, illogical, or inconsistent with common sense. Walzer, 395 Md. at 573, 911 A.2d at 432 (2006) (citing Blake v. Sta te, 395 Md. 213, 224, 909 A.2d 1020, 1026 (20 06)); see also G win v. MVA, 385 Md. 440, 462, 869 A.2d 822, 835 (2005); Frost v. State , 336 Md. 125, 137, 647 A.2d 106, 112 (1994 ). It would be inconsistent with common sense, and the MMWA s proconsumer approach, to hold that Congress intended for consumers to retain their ability to pursue a civil action, but did not intend to bar the use of binding arb itration that w ould constitute a substitute for litigation. We therefore reject Koons Ford s interpretation of the MMWA. If Congress intended otherwise, then it certainly had, and still has, the ability to say so. As we have previously explained, however, [i]t is not the task of the Judiciary to rewrite the Statute . . . . The court s charge in interpreting a statute is to determine the intent of the Legislature, not to insert language to change the meaning of a statute. Walze r, 395 Md. a t 584-8 5, 911 A .2d at 43 9-40 (c itations o mitted). Even if Congress did not directly express an intent to preclude binding arbitration in the language of the M MWA , the FTC s interpretation o f the MM WA is c ertainly based on a permis sible co nstructio n of the MM WA . See Walton, 298 F.3d at 492 (King, C.J. -28- dissenting); Rickard, 279 F. Su pp.2d at 92 1; Browne, 190 F. Su pp. 2d at 83 1; Pitchford, 124 F. Supp. 2d at 962-65. The FTC s interpretation is a permissible construction for all of the reasons set forth supra, describing why this Court believes that Congress evinced such an intent. 11 Therefore, under the second prong of the Chevron test, we would defer to the FTC regulations and hold that the MMW A precludes the resolution of MMWA claims through bindin g arbitra tion. JUDGMENT OF TH E CIRCU IT COURT FOR BALTIMORE COUNTY AFFIRMED. KOONS FORD TO PAY THE COSTS. 11 The FTC made clear that it based its decision on the plain language of the MMWA and not other fa ctors. In 64 F ed. Reg. 1 9700, 19 708 (Ap r. 22, 1999) , the FTC stated expressly that: The [FTC] examined the legality and the merits of man datory binding arbitration clau ses in written consum er produc ts warranties when it promulgated Rule 703 in 1975. Although several industry representatives at that time had recommended that the Rule a llow wa rrantors to req uire consu mers to submit to binding arbitration, the [FTC] rejected that view as being contrary to the congressiona l intent. The [ FTC] b ased this decision on its analysis of the plain view of the [MM WA]. The FTC also declined, in this volume o f the Fede ral Register, to amend th e regulation s to allow f or bind ing arb itration, st ating tha t this inte rpretatio n contin ues to b e correc t. -29- IN THE COURT OF APPEALS OF MARYLAND No. 66 September Term, 2006 KOONS FORD OF BALTIMORE, INC. v. RAY MON D CA LVIN LOB ACH , et al. Bell, C.J. Raker *Wilner Cathell Harrell Battaglia Greene, JJ. Dissen ting Op inion b y Harrell, J ., which Raker, J., Joins. Filed: March 20, 2007 * Wilner, J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decisio n and ado ption of this opinion. I dissent. While the Majority is welcome to pin its decision on the reasoning adopted previously by only three federal district courts,1 a handful of law journal articles,2 and a dissent, 3 I would choose to follow and adopt the reasoning of the other courts (the vast majo rity) that have decided that the Magnuson-Moss Warranty Act permits binding arbitration to be ele cted fo r dispute s arising under a covere d warr anty. See, e.g ., Davis v. S. Energy Homes, Inc., 305 F.3d 1268 (11 th Cir. 2002); Walton v. Rose Mobile Homes, Inc., 298 F.3d 470 (5th Cir. 2002) ; Patriot Mfg., Inc. v. Dixon, 399 F . Supp . 2d 1298, 1306-07 (S.D. Ala. 2005); Dombrowski v. Gen. Motors Corp., 318 F. Supp. 2d 850, 850-51 (D. Ariz. 2004); Pack v. Damon Corp., 320 F. Su pp. 2d 54 5, 558 (E.D . Mich. 20 04); Patriot Mfg., Inc. v. Jackson, 929 So.2 d 997, 10 05-06 (A la. 2005); Daimler Chrysler Corp. v. Yaeger, 818 N.E.2d 5 27, 536 (In d. 2005); Borowiec v. Gateway 2000, 808 N.E.2d 95 7, 970 (Ill. 2004); Abela v. Gen. Motors Corp., 677 N.W.2d 325 (M ich. 2004); Howell v. Cappaert Manufactured Housing, Inc., 819 So.2 d 461, 46 4 (La. Ct. A pp. 2002 ); In re American Homestar of Lancaster, Inc., 50 S.W.3 d at 492; S. Energy Homes, Inc. v. Ard, 772 So.2d 1131, 1135 (A la. 2000). 1 Rickard v. Teynor s Homes, Inc., 279 F. Supp. 2d 910 (N.D. O hio 2003); Browne v. Kline Tysons Imports, Inc., 190 F. Supp. 2d 827 (E.D. Va. 2002); and Pitchford v. Oakwood Mobile Homes, Inc., 124 F. Supp. 2d 9 58 (W.D. V a. 2000). 2 See Maj. slip op. at 20, n.8. 3 Chief Judge King s dissent in Walton v. Rose Mobile Homes, Inc., 298 F.3d 470 (5th Cir. 2002). The Majority opin ion, to its credit, giv es a fair (and persuasive) summary of the reasoning in Davis and Walton. See Maj. slip op. at 17-19. I need not repeat that here. Suffice it to add that the Federal Trade Commission s anti-arbitration b ias, expresse d in its 1999 renewal of the view that Section 110 (a)(3) of the [M agnuson -Moss] W arranty Act . . . clearly implies that a [ informal d ispute settlem ent] mech anism s de cision cann ot be legally binding, because if it were it would bar later court action (64 Fed. Reg. 19700, 19708 (1999)) is complete ly out-of-step w ith both Congress and the U.S. Supreme Court s views regarding arbitratio n not be ing inh erently ho stile to co nsume rs intere sts. See, e.g., Green Tree Fin. Corp. Ala. v. Randolph, 531 U.S. 79, 89-90, 121 S. Ct. 513, 521-22, 148 L. Ed. 2d 373 (2000 ). Judge Raker authorizes me to state th at she joins the views ex pressed in this dissent. -2-

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