Federal Court Jurisdiction Over Magnuson-Moss Warranty Act Class Actions: Change we can Believe In

Congress passed the Magnuson-Moss Warranty Act (the “MMWA”) in 1975 to combat perceived abuses in consumer automotive sales. Although the MMWA is not a model of clear drafting (in fact, many courts have noted just the opposite), the MMWA does make one very clear pronouncement: it expressly permits class actions.

However, the MMWA contains a jurisdictional requirement that renders its grant of class actions illusory: in order for a federal court to have jurisdiction over a class action under the MMWA, the plaintiff must name 100 class members in the complaint.[1] This requirement was interpreted strictly and literally by courts and, for 30 years, caused the death knell for otherwise viable class actions in federal court.

However, the Class Action Fairness Act of 2005 (“CAFA”) rendered the MMWA’s jurisdictional limitation moot.  CAFA gave federal courts jurisdiction over any class action in which the amount in controversy exceeds $5 million, and in which any of the members of a class are citizens of a state different from any defendant (subject to certain exceptions).  Courts began looking at this jurisdictional requirement as superseding MMWA’s requirement under the principle of statutory interpretation that holds that “Congress is knowledgeable about existing law pertinent to the legislation it enacts.” If Congress enacted CAFA and did not make a carve out for MMWA class actions, then Congress intended for CAFA’s jurisdictional requirements to trump the MMWA.

So, in the last few years, several courts have held that CAFA provides an alternative basis for jurisdiction over MMWA claims.  See McCalley v. Samsung Elecs. Am., Inc., No. 07-2141 (JAG), 2008 U.S. Dist. LEXIS 28076 (D.N.J. Mar. 31, 2008); Payne v. Fujifilm U.S.A., Inc., No. 07-385 (JAG), 2007 U.S. Dist. LEXIS 94765 (D.N.J. Dec. 28, 2007).  We are not aware of any court that has disagreed.

More recent cases have have bolstered this alternative basis for federal court jurisdiction over MMWA claims. In these cases, decided over the last twelve months–Marcus v. BMW of North America (December 18, 2009 opinion) and Oscar v. MINI USA–federal district courts have permitted MMWA claims to proceed under CAFA without requiring 100 class members to be listed on the complaint. Abbey Spanier represented the plaintiff class representatives in both of those cases.

[1] The MMWA does, however, permit a class action with fewer than 100 plaintiffs to proceed in state court.