District Court Holds That Magnuson-Moss Act Does Not Apply to Sale of U.S.-Manufactured Yacht in Canada

The World in U.S. Courts: Summer 2015 - Warranties

Stein v. Marquis Yachts, LLC, U.S. District Court for the Southern District of Florida, May 27, 2015

Plaintiff Stein, a Canadian resident, bought a 54-foot yacht in Canada that, almost immediately, began to suffer extensive mechanical and electrical problems. Although the opinion is not entirely clear, it appears that the yacht and its engines were manufactured in the U.S. and exported for sale to Stein. At issue was Stein's effort to amend the complaint to add a claim for breach of warranty under the Magnuson-Moss Warranty Act. The District Court in Miami rejected the effort, finding that the Act would not apply to a consumer exported from the U.S. for purchase in Canada.

The Magnuson-Moss Act applies to products that are "distributed in commerce." The statutory definition of that phrase does not expressly describe its applicability to products sold outside the U.S. The Federal Trade Commission, the U.S. agency with administrative responsibility for enforcing the Act, has declined to apply the Act to exports, despite arguably ambiguous language. The District Court agreed, citing the U.S. Supreme Court's 2012 decision in the Morrison case and its rule that a presumption against extraterritorial applicability must be overcome by clear statutory expressions to the contrary, which the court found did not exist with respect to the Act.

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