Indiana Lemon Law Appellate Opinions 2006

As 2006 comes to a close, I thought I would take a look back at Indiana’s courts of appeal opinions on the Indiana Motor Vehicle Protection Act, also known as Indiana’s lemon law. Actually, there wasn’t much. There was only one published opinion dealing with Indiana’s lemon law.

On November 2, 2006, the Indiana Court of Appeals decided the case of Walker v. DaimlerChrysler Corporation. William Walker, though not apparently an employee of DaimlerChrysler, purchased the truck at a discount under DaimlerChrysler’s Employee New Vehicle Purchase/Lease Program (remember the “buy at the price our employees pay” advertising?). In exchange for the employee discount, Mr. Walker signed an agreement giving up the right to file a lawsuit and instead submit to binding arbitration.

After the trial court dismissed his lawsuit, Mr. Walker appealed. Whether the Magnuson-Moss Warranty Act and Indiana’s lemon law allowed sellers to make mandatory binding arbitration part of sale was an issue of first impression in Indiana. The Indiana Court of Appeals, following the majority of states but going against the Federal Trade Commission’s explicit opinion, first found that the Magnuson-Moss Warranty Act does not prohibit mandatory binding arbitration.

The court then found that Indiana’s Motor Vehicle Protection Act also allowed mandatory binding arbitration. In doing so, the court found that binding arbitration was not an “informal procedure” under the Act.

The effect of this decision is that automobile manufacturers are permitted under Indiana law to require a consumer to submit to binding arbitration. Without a doubt, this means that consumers who so agree are foregoing significant rights, such as the right to a trial with its attendant protections and the right to appeal. Unfortunately, I seriously doubt it will also consistently mean lower prices for Indiana consumers.

Overall, I would say it was a pretty quiet year for lemon law appellate opinions.

Posted in:

Comments are closed.