Michigan Supreme Court
Lansing, Michigan 48909
Chief Justice Justices
Opinion
Maura D. Corrigan 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.
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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. As part of the
purchase contract, plaintiff was required to sign an
agreement requiring any warranty dispute to be settled by
binding arbitration. The truck subsequently developed a
number of problems, 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. The
trial court based its ruling on the determination that
1
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.
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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
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law. 257 Mich App 523. Although state courts are bound
by the decisions of the 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 respect to decisions of the
lower federal courts. 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
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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 analyses of the federal courts of appeals, we
conclude that plaintiffs’ agreement with defendant to
address the warranty claim through defendant’s dispute
resolution process, including mandatory 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 not dispose of this matter by memorandum
opinion. I would grant leave to consider further briefing
and argument.
Michael F. Cavanagh
Marilyn Kelly
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