Fourth Circuit Affirms Dismissal of Warranty Class Action
The Fourth Circuit recently issued an opinion highlighting the fact that product design often presents trade-offs, and that in comparing one product's performance to another, it is important to recognize those differences in order to preserve consumer choice.
In Robinson v. American Honda Motor Co., 2009 WL 19132 (4th Cir. Jan. 5, 2009), the plaintiff had brought a class action alleging that the tires sold with the Odyssey Touring minivan were defective because they did not last as long as other tires. This style of minivan came exclusively with Michelin PAX System tires with "run flat" capability: "If a tire is punctured, the minivan can still be driven at speeds up to 55 mph for a distance of up to 125 miles." Because of the PAX System's unique wheel-rim and tire combination, no other brand or model of tire will work on the minivan unless the wheels themselves are replaced.
The tire's treads are susceptible to rapid wear from wheel misalignment or mechanical irregularity. Plaintiff complained that after having the minivan for 18 months and less than 18,000 miles of use, his tires experienced excessive wear on the outside edge of the tread. He brought a class action against Honda and Michelin for breach of express warranty and breach of implied warranties.
The trial court, applying Maryland law, had granted the defendants' motion to dismiss, and the Fourth Circuit affirmed.
Honda's Express Warranty
The car manufacturer had clearly, repeatedly and unambiguously excluded the tires from its limited warranty. In three places it indicated that the tires were not covered under the warranty and that the tires had their own separate warranty. The express warranty also stated that a "local representative of the tire's manufacturer" would be responsible for warranty service.
Nevertheless, plaintiff seized on the following statement in the warranty booklet to argue that the tires should be covered: "By keeping your Honda in top condition, you will be rewarded with years of trouble-free service at the lowest operating cost. The keys to keeping your Honda in top condition are proper operation and regular maintenance." Plaintiff argued that because he had had all of the recommended maintenance performed by Honda, his need to replace tires in 18 months violated the promise of "years of trouble free service at the lowest operating cost."
The Fourth Circuit -- noting that the proffered phrase from the booklet was likely mere puffery -- observed that "lowest operating cost" is not "no" operating cost, and it did not cancel the very clear statements in the warranty booklet that the tires were not covered. Accordingly, the court affirmed dismissal of the express warranty claim against Honda.
Michelin's Express Warranty
Michelin's warranty covered the tires "against defects in workmanship and materials, for the life of the original useable tread or 6 years from the date of purchase, whichever comes first." The warranty also had replacement provisions making it clear that the life of the warranty is measured by the life of the tread, not by a period of time or miles. The Fourth Circuit affirmed the trial court's conclusion that there was no warranty whatsoever for tread wear, and thus affirmed dismissal of the express warranty claim.
Implied Warranty Claims Against Honda and Michelin
UCC 2-314(1) requires that goods, to be merchantable, must "'[p]ass without objection in the trade under the contract description' and must 'be fit for the ordinary purpose for which such goods are used.'"
Plaintiff argued that the 18,000 mile tread life of his PAX System tires did not meet the 35,000 mile to 40,000 mile tread life of other tires, and thus his tires were not fit for their ordinary purpose and would not pass without objection in the trade.
The Fourth Circuit recognized, however, that in making comparisons under section 2-314, one must be careful to correctly define the product. Here, the "product" for comparison was not "tires," but rather a subcategory of that product type: "run-flat tires." The court understood that properly defining the product for comparison is the key to preserving consumer choice:
Many different types of tires exist, each with a different purpose, a different design, and a different duration. Passenger tires, touring tires, high performance tires, all terrain tires, and mud tires are all categories of automobile and light truck tires commonly driven on American roads. When purchasing a specialized type of tire, consumers often choose to forego the longer tread life of standard passenger tires for special features such as increased grip or handling, a smoother ride, a lower profile, better aesthetics, or increased traction.
. . . Michelin PAX System tires provide a benefit -- increased safety -- at the cost of potentially shorter tread life. As in the case of performance tires, the merchantability of Michelin PAX System tires cannot be determined by a comparison to standard passenger tires. Instead, the merchantability of Michelin PAX System tires must be determined by examining whether these tires would "pass without objection in the trade" as run-flat tires.
Id. at *6 (emphasis in original).
The court thus affirmed dismissal of the implied warranty claims because plaintiff did not allege that his tires had a shorter tread life than other run-flat tires.
Although it is hardly complicated, the decision in Robinson is an important statement of the court's properly limited role in second-guessing issues of product design, and a recognition that a broader reading of implied warranty rules can severely impair consumer choice:
To hold otherwise would require all automobile tires to last as long as the standard passenger tire and would elevate durability above all other considerations in the manufacture and design of tires. This procrustean standard would severely limit the ability of tire and automobile manufacturers to create the specialized tires that consumers may desire. The purchaser of a set of tires -- and not the courts -- should be given the power to decide what balance of durability, performance, special features, and safety is best suited to his needs.
Id.
