also dissenting:
This appeal presents a single question: Does the Magnuson-Moss Warranty — Federal Trade Commission Improvement Act (the Magnuson-Moss Warranty Act) (15 U.S.C. § 2301 et seq. (1994)) prohibit a seller of consumer goods from requiring purchasers to waive their judicial remedies and submit their warranty claims to binding arbitration? In three separate lawsuits, the circuit court of Cook County held that it did. Based on that conclusion, the court denied motions filed by the seller to dismiss the purchasers’ complaints or to compel arbitration and stay the proceedings pending outcome of the arbitration. The seller appealed. The appellate court consolidated the appeals and affirmed. 331 Ill. App. 3d 842. We subsequently granted the seller’s petition for leave to appeal. 177 Ill. 2d R. 315. For the reasons that follow, I would affirm the judgment of the appellate court.
The plaintiffs in the cases before us are Michael Borowiec, Tadeusz and Dorota Kobik, and Leslie Waldron. Borowiec’s complaint alleged that in November of 1999, he purchased a personal computer from Gateway 2000, now doing business as Gateway, Inc. According to the complaint, Borowiec began experiencing “numerous defects and non-conformities within the computer” shortly after he bought it. Borowiec alleged that Gateway had intentionally or recklessly misrepresented to him that his service contract with Gateway for labor services provided for on-site repair, and that when he requested on-site repair, Gateway refused and required him to bring the computer to a Gateway facility for service. Borowiec further alleged that despite repeated attempts to obtain redress from Gateway pursuant to a warranty which the company had issued when it sold the computer to him, Gateway refused to honor the warranty, and the defects in his computer remain uncorrected.
According to Borowiec’s complaint, he revoked acceptance of the computer based on the foregoing acts or omissions by Gateway and filed this action against the company to recover his damages. Borowiec’s complaint asserted four claims for relief: (1) breach of written warranty pursuant to the Magnuson-Moss Warranty Act, (2) breach of implied warranty pursuant to the MagnusonMoss Warranty Act, (3) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 1998)) and (4) common law fraud.
The complaint filed by Tadeusz and Dorota Kobik paralleled the one filed by Borowiec. It alleged that the Kobiks purchased their computer from Gateway on or about January 31, 2001, and shortly thereafter “began to experience numerous defects and nonconformities” with the machine. As did Borowiec, the Kobiks asserted that Gateway had intentionally or recklessly misrepresented to them that their service contract with Gateway for labor services provided for on-site repair, and that when they requested on-site repair, Gateway refused and required them to bring the computer to a Gateway facility for service. The Kobiks further alleged that despite repeated attempts to obtain redress from Gateway pursuant to a warranty which the company had issued when it sold the computer to them, Gateway refused to honor the warranty and the defects in their computer remain uncorrected.
As a result of the defects and nonconformities with the computer, the Kobiks gave written notice to Gateway that they were revoking acceptance of the unit. This litigation followed. As grounds for their complaint, the Kobiks asserted claims for (1) breach of written warranty pursuant to the Magnuson-Moss Warranty Act, (2) breach of implied warranty pursuant to the MagnusonMoss Warranty Act, and (3) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. Unlike Borowiec, they did not include a count based on common law fraud.
The complaint filed by Leslie Waldron, the fourth plaintiff involved in this litigation, was similar. Waldron alleged that she purchased a computer and services from Gateway in November of 2000. Shortly thereafter, she discovered that the computer was defective. According to Waldron’s complaint, the defects and nonconformities in the unit violated both the express written warranty issued to her by Gateway and an implied warranty of merchantability. Waldron contended that despite numerous attempts to have Gateway repair the unit, the defects remain uncorrected. Waldron further contended that Gateway had intentionally or recklessly misrepresented to her that her service contract with Gateway for labor services provided for on-site repair, and that when she requested on-site repair, Gateway refused and required her to bring the computer to a Gateway facility for repairs. Waldron subsequently revoked acceptance of the computer, which, she alleged, remains in a defective and nonconforming condition, and brought this action against Gateway for damages. Her complaint alleged: (1) breach of a written warranty pursuant to the Magnuson-Moss Warranty Act, (2) breach of an implied warranty pursuant to the Magnuson-Moss Warranty Act, (3) revocation of acceptance pursuant to the Magnuson-Moss Warranty Act, and (4) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.
Gateway filed a motion to dismiss Borowiec’s complaint, arguing that under the terms of the warranty it issued when it sold the computer to Borowiec, Borowiec had agreed to waive his right to seek redress in the courts and was obligated by the warranty’s provisions to submit any claims he might have to arbitration. In Gateway’s view, that arbitration provision in the warranty divested the circuit court of subject matter jurisdiction to consider Borowiec’s complaint on the merits.2 The circuit court was only empowered to compel Borowiec to submit to arbitration.
The circuit court disagreed and denied Gateway’s motion to dismiss. Following an unsuccessful effort by Gateway to remove the action to federal court, the company sought interlocutory review in the appellate court pursuant to Supreme Court Rule 307 (188 Ill. 2d R. 307).3
In the Kobiks’ case, Gateway filed a motion under section 2 — 619 of the Code of Civil Procedure (735 ILCS 5/2 — 619(a)(1) (West 1998)) to dismiss the complaint based on the arbitration provision in the warranty issued to the Kobiks when they bought their computer. In the alternative, Gateway asked for an order compelling the Kobiks to submit their claims to arbitration and staying their civil action until the arbitration was completed. Gateway’s motion was denied. Immediately thereafter, the company filed a notice of interlocutory appeal pursuant to Supreme Court Rule 307.
Waldron’s case proceeded in exactly the same way. Invoking the arbitration clause in the warranty that came with Waldron’s computer, Gateway moved to dismiss her complaint under section 2 — 619 of the Code of Civil Procedure (735 ILCS 5/2 — 619(a)(1) (West 1998)) or, in the alternative, to compel arbitration and stay proceedings pending the completion of arbitration. As in Borowiec’s case and the litigation brought by the Kobiks, that motion was denied and Gateway brought an interlocutory appeal under Supreme Court Rule 307.
The appellate court consolidated Gateway’s appeals in each of the three cases and affirmed the orders entered by the circuit court. In ruling as it did, the appellate court noted that under the Federal Arbitration Act (9 U.S.C. § 1 et seq. (1994)), written contractual provisions requiring arbitration of disputes are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The court further opined, however, that in the case of consumer transactions, Congress has overridden the Federal Arbitration Act through the Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq. (1994)). The court held that the Magnuson-Moss Warranty Act and the regulations adopted by the Federal Trade Commission (FTC) pursuant to the Act prohibit the type of binding arbitration provisions contained in Gateway’s warranties. Accordingly, the court concluded that those arbitration provisions are unenforceable. Consistent with that conclusion, the court found that the arbitration provisions cannot operate as a bar to the plaintiffs’ claims in circuit court and that Gateway’s motions to dismiss or to compel arbitration and stay the circuit court proceedings were therefore properly denied.
In undertaking review of the appellate court’s judgment, I begin by noting that the issues before us have arisen in the context of motions to dismiss. A motion to dismiss pursuant to section 2 — 619 of the Code of Civil Procedure admits the legal sufficiency of the complaint but asserts an affirmative defense or other matter that avoids or defeats the plaintiffs claim. See Busch v. Bates, 323 Ill. App. 3d 823, 831-32 (2001). For purposes of reviewing a court’s ruling on a defendant’s motion to dismiss, this court accepts as true the well-pleaded allegations of the plaintiffs complaint. Board of Managers of the Village Centre Condominium Ass’n v. Wilmette Partners, 198 Ill. 2d 132, 134 (2001). Motions to dismiss under section 2 — 619 of the Code of Civil Procedure present a question of law, which we review de novo. Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 411 (2002).
Central to the dispute before us is Gateway’s “Limited Warranty and Terms and Conditions Agreement,” which governed the purchase of the computers in all three of the cases at issue here. The “Limited Warranty and Terms and Conditions Agreement” contains a dispute resolution clause, which reads:
“You agree that any Dispute between You and Gateway will be resolved exclusively and finally by arbitration administered by the National Arbitration Forum (NAF) ***. *** Any decision rendered in such arbitration proceedings will be final and binding on each of the parties ***. *** You understand that You would have had a right to litigate disputes through a court, and that You have expressly and knowingly waived that right and agreed to resolve any Disputes through binding arbitration. This arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1, et seq.”4 Section 2 of the Federal Arbitration Act provides, in
relevant part:
“A written provision in *** 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, *** shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (1994).
Although plaintiffs in each of the three cases before us asserted in their complaints that they revoked their contracts with Gateway, they do not argue, for the purposes of this appeal, that the revocations avoided the effect of the arbitration requirement in the contracts’ dispute resolution clauses. Nor do they dispute that the arbitration requirement would be valid and enforceable under the Federal Arbitration Act, standing alone. Their contention is that the Federal Arbitration Act has been superseded by the Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq. (1994)) in cases involving consumer transactions and that under the Magnuson-Moss Warranty Act and the regulations adopted by the Federal Trade Commission pursuant thereto, arbitration requirements of this kind are prohibited.
The Federal Arbitration Act, 43 Stat. 883, was originally enacted in 1925 and then reenacted and codified in 1947 as title 9 of the United States Code. The purpose of the law was to reverse a long-standing hostility by the courts to arbitration agreements and to place arbitration agreements on the same footing as other contracts. Equal Employment Opportunity Comm’n v. Waffle House, Inc., 534 U.S. 279, 289, 151 L. Ed. 2d 755, 765, 122 S. Ct. 754, 761 (2002), quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 114 L. Ed. 2d 26, 36, 111 S. Ct. 1647, 1651 (1991). The Supreme Court has construed the Act’s provisions as establishing a liberal federal policy favoring arbitration. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24, 74 L. Ed. 2d 765, 785, 103 S. Ct. 927, 941 (1983). In accordance with that policy, the Supreme Court has held that courts have a duty to enforce arbitration agreements subject to the Act. See Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226, 96 L. Ed. 2d 185, 193, 107 S. Ct. 2332, 2337 (1987). The Court has further held, however, that the mandates of the Federal Arbitration Act are not absolute. As with any statutory directives, they may be overridden by a contrary congressional command. McMahon, 482 U.S. at 226, 96 L. Ed. 2d at 194, 107 S. Ct. at 2337.
To defeat application of the Federal Arbitration Act based on conflicting federal legislation, the party opposing arbitration of a dispute has the burden of showing that Congress intended to preclude a waiver of judicial remedies for the rights at issue. Such an intent may be discerned from the text of the congressional enactment or the enactment’s legislative history or through the existence of an inherent conflict between arbitration and the enactment’s underlying purposes. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 114 L. Ed. 2d 26, 37, 111 S. Ct. 1647, 1652 (1991).
The Magnuson-Moss Warranty Act, the statute in question here, was enacted in 1975, 50 years after passage of the Federal Arbitration Act. While the Federal Arbitration Act deals generally with contractual arbitration agreements, the Magnuson-Moss Warranty Act was designed for a more specific purpose, namely, “to improve the adequacy of information available to consumers [and] prevent deception” in connection with written warranties issued with consumer products. 15 U.S.C. § 2302(a) (1994).
In keeping with its purposes, the Magnuson-Moss Warranty Act sets out clear and comprehensive requirements regarding disclosures, duties, and remedies associated with warranties on consumer products. Products covered by the Act include any “tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes.” 15 U.S.C. § 2301(1) (1994). There is no dispute that the computers purchased by the plaintiffs in this case fell within this definition and that the warranties issued by Gateway on those computers were subject to the Magnuson-Moss Warranty Act’s requirements.
While the Federal Arbitration Act calls for enforcement of arbitration agreements, the Magnuson-Moss Warranty Act specifically provides that where a consumer has been damaged by the failure of a supplier, warrantor or service contractor to comply with any obligation under the Act or under a written warranty, implied warranty or service contract, the consumer “may bring suit for damages and other legal relief *** in any court of competent jurisdiction in any State or the District of Columbia.” 15 U.S.C. § 2310(d)(1)(A) (1994). An aggrieved consumer is also given the option of suing in federal court if certain restrictions are met. 15 U.S.C. § 2310(d)(1)(B) (1994). Moreover, if the consumer “finally prevails” in the litigation, the Act authorizes the court to award the consumer his costs and expenses, including his attorney fees. 15 U.S.C. § 2310(d)(2) (1994).
The right conferred on consumers by the Act to seek redress in the courts is subject to two basic conditions. First, where an individual consumer complains that a company obligated under a warranty has failed to comply with its warranty obligations, the consumer must afford the company a reasonable opportunity to cure such failure before he brings suit. 15 U.S.C. §§ 2310(d)(1), (e) (1994). Second, if a warrantor has established informal dispute settlement procedures that comply with rules established by the Federal Trade Commission, the warrantor may require the consumer to resort to those procedures before pursing any legal remedies in the courts. 15 U.S.C. § 2310(a)(3)(C) (1994).
When Congress enacted the Magnuson-Moss Warranty Act, it did not include within the statute itself a detailed listing of the standards a warrantor’s informal dispute settlement procedures must meet. Rather, it delegated authority for prescribing the minimum standards for such procedures to the Federal Trade Commission. 15 U.S.C. § 2310(a)(2) (1994). Pursuant to that authority, the FTC has adopted a comprehensive set of legislative regulations governing informal dispute procedures. 16 C.F.R. § 703.1 et seq. (2002). Those regulations provide that the decisions of any informal dispute resolution procedure incorporated into the terms of a written warranty “shall not be legally binding on any person.” 16 C.F.R. § 703.5(j) (2002). Interpretive regulations adopted by the FTC further provide that a
“warrantor shall not indicate in any written warranty or service contract either directly or indirectly that the decision of the warrantor, service contractor, or any designated third party is final or binding in any dispute concerning the warranty or service contract.” 16 C.F.R. § 700.8 (2002).
The FTC’s legislative regulations were adopted in 1975. Its interpretive regulations were issued in 1977. Those regulations have now been followed by the FTC for over a quarter century without deviation. As recently as 1999, the FTC reaffirmed its position. In a regulatory review statement published in April of that year, the FTC determined that it would not amend 16 C.F.R. § 703.5(j) to allow for binding arbitration and that 16 C.F.R. pt. 703 “will continue to prohibit warrantors from including binding arbitration clauses in their contracts with consumers that would require consumers to submit warranty disputes to binding arbitration.” 64 Fed. Reg. 19,700, 19,708-09 (eff. April 22, 1999).
In view of the statutory and regulatory provisions I have just detailed, numerous federal district courts have held that the Magnuson-Moss Warranty Act overrides the mandates of the Federal Arbitration Act and prohibits warrantors from requiring consumers to waive their judicial remedies in favor of binding arbitration where, as here, an express written warranty is involved. See Wilson v. Waverlee Homes, Inc., 954 F. Supp. 1530, 1538-39 (M.D. Ala. 1997), aff’d, 127 F.3d 40 (11th Cir. 1997); Boyd v. Homes of Legend, Inc., 981 F. Supp. 1423 (M.D. Ala. 1997), remanded on jurisdictional grounds, 188 F.3d 1294 (11th Cir. 1999); Rhode v. E&T Investments, Inc., 6 F. Supp. 2d 1322 (M.D. Ala. 1998); Pitchford v. Oakwood Mobile Homes, Inc., 124 F. Supp. 2d 958, 963-65 (W.D. Va. 2000); Raesly v. Grand Housing, Inc., 105 F. Supp. 2d 562, 573 (S.D. Miss. 2000); Yeomans v. Homes of Legend, Inc., No. 00—D—824—N (M.D. Ala. March 5, 2001); Brown v. Kline Tysons Imports, Inc., 190 F. Supp. 2d 827, 830-31 (E.D. Va. 2002); see Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002) (King, C.J., dissenting). State trial courts (see Philyaw v. Platinum Enterprises, Inc., No. CL00—236 (Va. Cir. Ct. 2001)), intermediate appellate courts (see In re Van Blarcum, 19 S.W.3d 484, 491-92 (Tex. Ct. App. 2000)), and courts of last resort (see Parkerson v. Smith, 817 So. 2d 529, 533-35 (Miss. 2002); Southern Energy Homes, Inc. v. Lee, 732 So. 2d 994 (Ala. 1999)) have taken the same view.
The judgment of the appellate court now before us for review adhered to that precedent. Several courts in other jurisdictions have recently adopted a contrary position. A divided three-judge panel of the United States Court of Appeals for the Fifth Circuit has held that the Magnuson-Moss Warranty Act is not an exception to the Federal Arbitration Act and does not preclude warrantors from requiring binding arbitration of claims asserted under written warranties. Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002). Its interpretation is now shared by the Eleventh Circuit (see Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002) ) and has been adopted by the Supreme Courts of Texas (see In re American Homestar of Lancaster, Inc., 50 S.W.3d 480 (Tex. 2001), directing appellate court to vacate order in In re Van Blarcum, 19 S.W.3d 484 (Tex. Ct. App. 2000)), and Alabama (see Southern Energy Homes, Inc. v. Ard, 772 So. 2d 1131 (Ala. 2000), overruling Southern Energy Homes, Inc. v. Lee, 732 So. 2d 994 (Ala. 1999)) and by appellate courts in Florida (see Stacy David, Inc. v. Consuegra, 845 So. 2d 303 (Fla. App. 2003)), Georgia (see Results Oriented, Inc. v. Crawford, 245 Ga. App. 432, 538 S.E.2d 73 (2000), aff’d, 273 Ga. 884, 548 S.E.2d 342 (2001)), Louisiana (see Howell v. Cappaert Manufactured Housing, Inc., 819 So. 2d 461 (La. App. 2002)) and Michigan (see Abela v. General Motors Corp., 257 Mich. App. 513, 669 N.W.2d 271 (2003)).
Various rationales are advanced in this latter group of decisions to uphold mandatory binding arbitration in the face of the Magnuson-Moss Warranty Act and its attendant rules and regulations. All are premised on the notion that the courts which have invalidated binding arbitration provisions under the Magnuson-Moss Warranty Act have misinterpreted the Act’s legislative history and text.5 Although the latter cases acknowledge that the decisions of the other courts are fully consistent with the FTC’s rules and regulations, they argue that the FTC’s interpretation of the law is, itself, erroneous and should not be followed.
Gateway urges our court to adopt this reasoning and to reject the view taken by our appellate court and by the tribunals which have concluded that the MagnusonMoss Warranty Act forbids warrantors from requiring consumers to forgo their judicial remedies in favor of binding arbitration. A majority of my colleagues has accepted this invitation. I do not.
The Federal Arbitration Act, which applies generally to transactions involving commerce, allows judicial access to be supplanted by arbitration. The legislative scheme created under the more recently enacted Magnuson-Moss Warranty Act, which pertains specifically to warranties on consumer products, does not. Although the Magnuson-Moss Warranty Act makes provision for alternative dispute resolution procedures, those procedures may operate only as a precondition to bringing suit. 15 U.S.C. § 2310(a)(3)(c) (1994). They may not be imposed as a substitute for legal action, as the FTC’s regulations recognize.
Some have attempted to reconcile the two statutes by arguing that the informal dispute resolution procedures contemplated by the Magnuson-Moss Warranty Act are distinguishable from and do not include arbitrations. I have found nothing in the text or legislative histories of the statutes to support such an interpretation. To the contrary, it seems clear to me that the informal dispute settlement procedures referenced by the Magnuson-Moss Warranty Act were intended by Congress to include all mechanisms of redress other than court proceedings, including private arbitration. Current legal scholarship supports this view. A. Lamis, The New Age of Artificial Legal Reasoning as Reflected in the Judicial Treatment of the Magnuson-Moss Act and the Federal Arbitration Act, 15 Loy. Consumer L. Rev. 173 (2003).
To hold otherwise would contravene basic principles of statutory construction. If the Magnuson-Moss Warranty Act were read to permit binding arbitration in accordance with the Federal Arbitration Act, warrantors would have no reason to provide consumers with the option of pursuing any other type of dispute resolution mechanisms. Warrantors would always opt for binding arbitration because that mechanism would foreclose any subsequent access to the courts by consumers and defeat the consumers’ concomitant right to obtain an award of their attorney fees from the courts if they prevailed (see 15 U.S.C. § 2310(d)(2) (1994)). As a result, the provisions in the Magnuson-Moss Warranty Act governing informal dispute resolution procedures would be rendered meaningless. That is fatal, for under federal law, as under the law of Illinois, the court has a duty to give effect, if possible, to every clause and word of a statute. Statutes are to be so construed that, if it can be prevented, no clause, sentence, or word is superfluous, void, or insignificant. TRW Inc. v. Andrews, 534 U.S. 19, 31, 151 L. Ed. 2d 339, 350, 122 S. Ct. 441, 449 (2001), quoting Duncan, Superintendent, Great Meadow Correctional Facility v. Walker, 533 U.S. 167, 174, 150 L. Ed. 2d 251, 259, 121 S. Ct. 2120, 2125 (2001).
The claim has been made that rather than thwarting the Magnuson-Moss Warranty Act, enforcement of binding arbitration provisions under the Federal Arbitration Act is actually consistent with the Magnuson-Moss Warranty Act because that statute provides that nothing therein “shall invalidate or restrict any right or remedy of any consumer under State law or any other Federal law” (15 U.S.C. § 2311(b)(1) (1994)) and consumers, no less than corporations, should have the right to resort to binding arbitration if they so choose. I find this contention unpersuasive. There is no question that informal dispute resolution procedures, including arbitration, can benefit consumers by offering them the opportunity to pursue their claims in a manner that is usually cheaper than litigation, with simpler rules, less formality, and more flexible scheduling. See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 280, 130 L. Ed. 2d 753, 768, 115 S. Ct. 834, 842-43 (1995). That is why the Magnuson-Moss Warranty Act encourages warrantors to establish such procedures. See 15 U.S.C. § 2310(a)(1) (1994). Where arbitration is mandatory and binding, however, and access to courts is foreclosed, the benefits flow primarily to the warrantors. That is why the Magnuson-Moss Warranty Act makes recourse to informal dispute resolution procedures a precondition to litigation rather than a replacement for it.
That arbitration profits warrantors rather than consumers when it is made compulsory and binding is demonstrated by experience. If binding arbitration were advantageous to consumers, one would expect to find instances where warrantors were asking for judicial relief while consumers demanded arbitration. In fact, the reported decisions seem to be uniformly to the contrary. I have searched in vain for a single instance in the case law where the consumer is the party seeking to avoid litigation through arbitration. In every instance I have seen, the substitution of binding arbitration for judicial remedies is a mode of recourse sought by warrantors, not their customers. Accordingly, adherence to the MagnusonMoss Warranty Act and its opportunities for redress in the courts cannot, in any meaningful sense, be regarded as invalidating or restricting “any right or remedy of any consumer.” Indeed, the notion that enforcement of binding arbitration is necessary to protect consumers, notwithstanding the Magnuson-Moss Warranty Act’s provision for judicial remedies and statutory attorney fees, turns the Act on its head. It is the same as holding that portions of the Act must be nullified to give the statute effect. I cannot countenance such a construction.
By any reasonable measure, the Magnuson-Moss Warranty Act and the Federal Arbitration Act are in irreconcilable conflict. Because the Magnuson-Moss Warranty Act became law five decades after promulgation of the Federal Arbitration Act, we must presume that it was enacted in light of the Federal Arbitration Act. See Parkerson v. Smith, 817 So. 2d at 533. In construing federal statutes, courts follow the familiar principle that where statutes are in irreconcilable conflict, as the statutes here are, the more recently enacted law controls over an earlier and more general statute. See, e.g., Tug Allie-B, Inc. v. United States, 273 F.3d 936, 949-50 (11th Cir. 2001); Bolar v. Frank, 938 F.2d 377, 379 (2d Cir. 1991). Because the statutes before us today cannot be reconciled and because the Magnuson-Moss Warranty Act deals more specifically with written warranties on consumer products, I agree with those courts which have held that the Magnuson-Moss Warranty Act supersedes the Federal Arbitration Act in cases seeking relief based on warranties encompassed by the Magnuson-Moss Warranty Act’s provisions.
The regulations enacted by the FTC in accordance with the authority conferred on it by Congress are consistent with that view. As I wrote earlier in this dissent, the FTC’s regulations do not allow binding arbitration of disputes concerning written warranties or service contracts. Under those regulations, warrantors are prohibited from including clauses in contracts with consumers that would require consumers to submit their warranty disputes to binding arbitration. That, however, is precisely what Gateway attempted to do in the consolidated cases before us today.
I reject the notion that the FTC’s regulations are not entitled to deference and should be ignored by our court in analyzing the validity of the binding arbitration clause in Gateway’s warranties. Such an approach is inconsistent with federal law. The United States Supreme Court has expressly held that legislative regulations adopted by federal administrative agencies are given controlling weight unless they are arbitrary, capricious or manifestly contrary to the statute pursuant to which they were adopted. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 81 L. Ed. 2d 694, 703, 104 S. Ct. 2778, 2782 (1984). The regulations here do not fall within any of those exceptions.
Adherence to the FTC’s regulations is further supported by the United States Supreme Court’s precept that considerable weight should be accorded to executive department construction of a statutory scheme it is entrusted to administer. Chevron, 467 U.S. at 844, 81 L. Ed. 2d at 704, 104 S. Ct. at 2782. Such deference is particularly appropriate where, as in this case, the agency has interpreted the statutory scheme in a consistent fashion over a considerable period of time. Barnhart v. Walton, 535 U.S. 212, 220, 152 L. Ed. 2d 330, 340, 122 S. Ct. 1265, 1270 (2002).
I note, moreover, that unlike the intermediate federal appeals courts whose decisions have been cited by the majority, we are a state court. As such, our authority to reject federal law is more constrained. It is true that state courts normally have jurisdiction to hear claims arising under both federal and state law unless that jurisdiction has been validly limited. It is also true, however, that the federal constitution requires the states to recognize federal law as paramount. Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 477-78, 69 L. Ed. 2d 784, 791, 101 S. Ct. 2870, 2875 (1981).
I have no doubt that a state court has authority to declare that a federal statute or regulation violates the United States Constitution. I would even concede that a state court may hold that a federal regulation is invalid because it has not been properly enacted. Neither of those circumstances is present here, however. The regulations at issue in this case, which bar binding arbitration clauses in written warranties, are not claimed to violate the federal constitution, and no argument has been made that the FTC did not follow the proper procedures in adopting them. The majority declines to follow the regulations simply because it disagrees with them. That it may not do.
Properly promulgated agency regulations implementing federal statutes have the force and effect of federal law, which state courts are bound to follow. For a state court to override such regulations would violate the supremacy clause of the United States Constitution. Boron Oil Co. v. Downie, 873 F.2d 67, 71 (4th Cir. 1989). None of the state courts which have followed the decisions by the federal circuit courts of appeal in Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002), and Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002), have recognized this limitation.
Arbitration provisions that violate federal statutory or regulatory provisions, as Gateway’s do, are void and unenforceable. See, e.g., In re Conticommodity Services, Inc., No. H—86—4202 (N.D. Ill. May 8, 1987) (arbitration clause which violated regulations of the Commodities Futures Trading Commission was null and void, and the Federal Arbitration Act did not mandate its enforcement). The appellate court was therefore correct in upholding the circuit court’s decisions to deny the motions filed by Gateway to dismiss the plaintiffs’ respective complaints or to compel arbitration and stay the proceedings pending outcome of the arbitration.
Gateway argues, in the alternative, that even if its binding arbitration provisions are unenforceable with respect to plaintiffs’ warranty claims, they can still be applied to require arbitration of plaintiffs’ non-Warranty Act claims. This argument is untenable. Because the Magnuson-Moss Warranty Act prohibits inclusion of mandatory binding arbitration provisions in warranties on consumer products, those provisions should not have been in the warranties extended to plaintiffs by Gateway. Because they should not have been included in the warranties, they have no force or effect. We must treat them as if they do not exist. That is the consequence of finding them void and unenforceable. No principle of contract law permits us to excise the arbitration provisions from the warranties, where they are illegal, and restore them to the agreement in some other place in some other way for some other purpose.
A second, and equally fundamental, flaw in Gateway’s argument is that it would require us to overlook the nature of plaintiffs’ other claims. Although plaintiffs’ complaints include counts alleging violation of Illinois’ consumer fraud and deceptive business practices statute and, in one instance, common law fraud, those counts are all premised on the substantive provisions of the warranties issued by Gateway. The statutory consumer fraud counts, for example, are based on the proposition that Gateway’s inclusion of the binding arbitration requirement in its warranties is a deceptive practice because under the Magnuson-Moss Warranty Act, warrantors are not, in fact, permitted to represent to consumers that the results of arbitration or other types of informal dispute resolution proceedings will be final and binding.
As with plaintiffs’ other claims, the viability of these claims plainly turns on the underlying question of whether Gateway has violated its obligations under the Magnuson-Moss Warranty Act. In this sense, all of plaintiffs’ claims are Warranty Act claims. Under the statutory and regulatory scheme adopted by Congress, plaintiffs have the right to litigate such claims in the courts.
For the foregoing reasons, I would affirm the judgment of the appellate court. I therefore respectfully dissent.
JUSTICE KILBRIDE joins in this dissent.
Gateway purported to base its motion on section 2 — 615 of the Code of Civil Procedure (735 ILCS 5/2 — 615 (West 1998)). Where, as here, a defendant in a civil action challenges the circuit court’s subject matter jurisdiction, dismissal is properly sought under section 2 — 619(a)(1) of the Code of Civil Procedure (735 ILCS 5/2 — 619(a)(1) (West 1998)), rather than section 2 — 615. Sound practice dictates that motions be correctly designated. Nevertheless, reversal based on misdesignation is necessary only if the error has prejudiced the nonmoving party. See Scott Wetzel Services v. Regard, 271 Ill. App. 3d 478, 481 (1995). There is nothing in the record before us to suggest that Borowiec suffered any such prejudice. He clearly understood Gateway’s position and was able to address it on the merits.
Denial of a motion to dismiss and to compel arbitration is appealable under Rule 307, which governs interlocutory appeals as of right, because demanding that court proceedings be halted and that a dispute be sent to arbitration is analogous to a motion seeking injunctive relief. See Bass v. SMG, Inc., 328 Ill. App. 3d 492, 496 (2002). Rule 307(a) requires the notice of appeal to be filed within 30 days of the circuit court’s order. Although the notice in Borowiec’s case was not filed until several months after the circuit court ruled, the filing period was tolled by the removal proceedings (see Hartlein v. Illinois Power Co., 151 Ill. 2d 142, 155 (1992)), and Gateway does not argue that Borowiec’s appeal was untimely.
Gateway’s binding arbitration provisions have evolved in the wake of court challenges. A prior version specified that arbitrations were to be conducted in accordance with the rules of Conciliation and Arbitration of the International Chamber of Commerce. Those rules required consumers to pay up-front fees that exceeded the cost of most Gateway products and to bear Gateway’s legal fees if the consumer did not prevail. In addition, the rules mandated that all arbitrations were to be held in Chicago regardless of where the consumer resided, and that all correspondence regarding the arbitration was to be sent to the International Chamber of Commerce’s headquarters in France. In Brower v. Gateway 2000, Inc., 246 A.D.2d 246, 676 N.Y.S.2d 569 (1998), the New York Supreme Court, Appellate Division, found this to be unconscionable and therefore invalidated the arbitration agreement to the extent that it required arbitration before the International Chamber of Commerce. The court in Brower was not asked to resolve the more basic question presented by this case, namely, whether the binding arbitration clause violated the Magnuson-Moss Warranty Act.
Stacy David, Inc. v. Consuegra, 845 So. 2d 303 (2003), did not directly advance this rationale. It merely cited to Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002). Similarly, Abela v. General Motors Corp., 257 Mich. App. 513, 669 N.W.2d 271 (2003), undertook no independent analysis. It simply invoked the decisions of the federal courts of appeals in Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002), and Davis v. Southern Energy Homes, Inc., 305 F.3d 1268 (11th Cir. 2002), which it felt obliged to follow. To the extent such an obligation existed, it was an obligation the courts of Michigan elected to assume as a matter of Michigan state law. The only federal court whose interpretation of federal law is controlling on state courts is the United States Supreme Court. Neither federal supremacy nor any other principle of federal law requires that a state court’s interpretation of federal law give way to a lower federal court’s interpretation. If a state court follows a federal circuit court’s interpretation of federal law, it does so only because it chooses to, not because it must. Lockhart v. Fretwell, 506 U.S. 364, 376, 122 L. Ed. 2d 180, 193, 113 S. Ct. 838, 846 (1993) (Thomas, J., concurring). Consistent with this principle, our court has expressly held that decisions of lower federal courts are not conclusive on the courts of Illinois except insofar as the decision of the lower federal court may become the law of the case. People v. Kokoraleis, 132 Ill. 2d 235, 293-94 (1989). See also Bishop v. Burgard, 198 Ill. 2d 495, 507 (2002); Weiland v. Telectronics Pacing Systems, Inc., 188 Ill. 2d 415, 423 (1999).