A proposed class action alleges Harley-Davidson has violated federal law by tying the validity of its 24-month motorcycle warranties to the use of only authorized dealers for repairs and replacement parts.
The 30-page lawsuit says that it is illegal for a consumer product warranty to be conditioned on the use of a specific repair service or authorized parts. According to the case, the repair services provided by authorized Harley-Davidson dealers cost more than those provided by independent shops, and the motorcycle giant’s alleged “tying arrangement” has allowed it to maintain a monopoly on both repairing the products it sells and selling after-market parts.
Ultimately, Harley-Davidson does not allow customers to choose how they repair and maintain their motorcycles, instead opting to “insure future revenue for itself” by tying its warranties to the use of authorized dealer repairs and replacement parts.
“In other words, if a consumer repairs his or her own motorcycle or uses an independent dealer and/or installs unauthorized parts or accessories on his or her motorcycle, Harley-Davidson threatens that it will void the warranty,” the filing summarizes, noting that sales of parts and accessories are the company’s “second-largest source of revenue and consistently comprise approximately 20% of those revenues.”
As a result, consumers have been left to pay for more expensive Harley-Davidson repairs, maintenance and parts in order to continue the warranty coverage that was included with their original motorcycle purchase, the complaint alleges.
“Had Plaintiff and the Class members been aware that the warranty included an unlawful repair restriction, they would not have: (i) purchased the motorcycles, or would have paid significantly less for them and (ii) paid a price premium for Harley-Davidson repairs and parts for the motorcycles.”
The suit also alleges Harley-Davidson unlawfully fails to provide consumers with access to its written warranties prior to the point of sale. By law, the case says, Harley-Davidson must provide sellers with the necessary materials to allow them to either display the warranty “in close proximity” to the product or place signs prominently around a store to alert a consumer that they may inspect product warranties upon request. These obligations extend to any product that costs more than $15, per the complaint.
Moreover, Harley-Davidson has failed to disclose its product warranties “clearly and conspicuously in a single document with simple and readily understood language” and provide a clear description and identification of the particular products, parts or components that are excluded from the warranty, the suit claims. Per the case, the defendant instead instructs consumers to consult a Harley-Davidson dealer for the full details of the warranty.
The lawsuit looks to cover all persons nationwide who purchased a Harley-Davidson motorcycle.
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