        Maurice RICHARDSON, an individual, Karen Richardson, an individual, Plaintiffs-Appellees,

                                                       v.
                   PALM HARBOR HOMES, INC., a corporation, Defendant-Appellant.

                                                 No. 00-12858.

                                        United States Court of Appeals,
                                               Eleventh Circuit.

                                                 June 28, 2001.

Appeal from the United States District Court for the Northern District of Alabama.(No. 00-00454-CV-J-S)
Inge P. Johnson, Judge.
Before WILSON and COX, Circuit Judges, and RYSKAMP*, District Judge.

          COX, Circuit Judge:

          Palm Harbor Homes, Inc., a retailer of mobile homes, appeals the district court's denial of its motion
to compel arbitration of a breach-of-express-warranty claim against it. We reverse and remand.

                                                  Background
          Maurice and Sabrina Richardson bought a mobile home manufactured by Grand Manor Homes, Inc.
from Palm Harbor. Grand Manor issued them a one-year warranty against defects in materials and

workmanship. The mobile home proved on delivery to be riddled with such defects, and the Richardsons
immediately requested repair under the warranty. Unsatisfied with the response, the Richardsons sued Palm
Harbor, Grand Manor, and Bombardier Capital, Inc., which financed their purchase, for breach of written,

express, and implied warranties.
          Palm Harbor (as well as the other defendants) moved to compel arbitration of the claims against it
based on a predispute agreement, signed by Mr. Richardson at closing, in which Mr. Richardson and Palm

Harbor agreed to binding arbitration of all disputes between them about the mobile home, including warranty

disputes. The Richardsons opposed Palm Harbor's motion, in part because they believed that the Magnuson-

Moss Warranty Act (MMWA), 15 U.S.C. § 2310(a), voided their predispute assent to arbitrate.
          The district court agreed with the Richardsons in part, holding that the MMWA prohibits arbitration
of express-warranty claims. The court accordingly denied Palm Harbor's motion to compel arbitration of the

express-warranty claims against it. The court did, however, compel arbitration of the implied-warranty claims


    *
     Honorable Kenneth L. Ryskamp, U.S. District Judge for the Southern District of Florida, sitting by
designation.
against Palm Harbor.1

         Palm Harbor appeals, invoking our jurisdiction under 9 U.S.C. § 16(a). (The Richardsons have not

invoked our pendent appellate jurisdiction to cross-appeal, and the part of the order compelling arbitration
is therefore not before us.) Palm Harbor makes two alternative arguments: first, that the MMWA does not

prohibit binding arbitration at all; and second, that even if it did, it would not bar arbitration of the specific

claims that the Richardsons have made against Palm Harbor. These arguments present legal issues about the

arbitrability of certain claims, and we consider them de novo. See Paladino v. Avnet Computer Technologies,

Inc., 134 F.3d 1054, 1060 (11th Cir.1998) (Cox, J., joined by Tjoflat, J.).

                                                   Discussion
         The Federal Arbitration Act (FAA), 9 U.S.C. § 2, explicitly makes predispute arbitration agreements

presumptively enforceable if they "evidenc[e] a transaction involving commerce," which this one
undisputedly does. Congress may, of course, revoke this approval of arbitration agreements and "preclude

a waiver of judicial remedies for the statutory rights at issue." Shearson/American Express, Inc. v. McMahon,

482 U.S. 220, 227, 107 S.Ct. 2332, 2337, 96 L.Ed.2d 185 (1987). Such an intent must be " 'deducible from
[the statute's] text or legislative history' " or "from an inherent conflict between arbitration and the statute's

underlying purposes." Id., 107 S.Ct. at 2338 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444 (1985) (alterations in Shearson)). No one

argues that enforcing predispute arbitration agreements "inherently conflicts" with a statute that regulates

consumer warranties, but the Richardsons contend—with support from at least two courts—that the MMWA's
"text or legislative history" show an intent to override the FAA and to render unenforceable predispute

agreements to submit warranty disputes to binding arbitration. See Wilson v. Waverlee Homes, Inc., 954

F.Supp. 1530, 1539 (M.D.Ala.) (Thompson, J.), aff'd without opinion, 127 F.3d 40 (11th Cir.1997); Southern

Energy Homes, Inc. v. Lee, 732 So.2d 994, 999-1000 (Ala.1999), overruled, Southern Energy Homes, Inc.

v. Ard, 772 So.2d 1131, 1135 (Ala.2000); see also Cunningham v. Fleetwood Homes of Ga., Inc., --- F.3d

----, ---- (11th Cir.2001) (a manufacturer may not avail itself, as a third-party beneficiary, of a presale

arbitration agreement between the retailer and the consumer, when the warranty does not mention the
arbitration agreement).


    1
      The district court initially declined to compel Mrs. Richardson to arbitrate because she is not a party
to the arbitration agreement. It later reversed that ruling, however, on the ground that Mrs. Richardson is
a third-party beneficiary of the arbitration agreement. Mrs. Richardson has not appealed that ruling.
         The Richardsons' and these courts' reasoning relies on inferences from the statute, its history, and

interpretation of the Act by the Federal Trade Commission (FTC). First, the statute provides a federal judicial

forum for claims of breach of written or implied warranties. See 15 U.S.C. § 2310(d); Wilson, 954 F.Supp.

at 1537 (starting its analysis with the observation that the MMWA expressly provides a federal cause of
action). Second, the MMWA endorses, and makes enforceable, provisions in written warranties requiring

nonbinding dispute resolution, provided that the informal procedures prescribed comply with regulations

issued by the FTC. See 15 U.S.C. § 2310(a)(1)-(3)2; Cunningham, --- F.3d at ----. The FTC's regulations

under the Act that permit a warrantor to demand an effort at extrajudicial dispute resolution, moreover,

provide only for nonbinding proceedings. See 16 C.F.R. pt. 703. The FTC has indeed been explicit that its

regulations "do[ ] not allow for" binding alternative dispute resolution. Disclosure of Written Consumer
Product Warranty Terms and Conditions, 40 Fed.Reg. 60168, 60210 (December 31, 1975). The provision

of a federal claim for breach of some warranties and this strong preference for nonbinding informal dispute



    2
     The MMWA provides in pertinent part:

                 (1) Congress hereby declares it to be its policy to encourage warrantors to establish
                 procedures whereby consumer disputes are fairly and expeditiously settled through
                 informal dispute settlement mechanisms.

                 (2) The Commission shall prescribe rules setting forth minimum requirements for any
                 informal dispute settlement procedure which is incorporated into the terms of a written
                 warranty to which any provision of this chapter applies. Such rules shall provide for
                 participation in such procedure by independent or governmental entities.
                 (3) One or more warrantors may establish an informal dispute settlement procedure
                 which meets the requirements of the Commission's rules under paragraph (2). If—

                         (A) a warrantor establishes such a procedure,
                         (B) such procedure, and its implementation, meets the requirements of such rules,
                         and

                         (C) he incorporates in a written warranty a requirement that the consumer resort
                         to such procedure before pursuing any legal remedy under this section respecting
                         such warranty,

                 then (i) the consumer may not commence a civil action (other than a class action) under
                 subsection (d) of this section unless he initially resorts to such procedure; and (ii) a class
                 of consumers may not proceed in a class action under subsection (d) of this section
                 except to the extent the court determines necessary to establish the representative
                 capacity of the named plaintiffs, unless the named plaintiffs (upon notifying the
                 defendant that they are named plaintiffs in a class action with respect to a warranty
                 obligation) initially resort to such procedure.

        15 U.S.C. § 2310(a).
resolution, according to the Richardsons and the courts that subscribe to this reasoning, together spell

prohibition of binding arbitration of consumer warranty claims, notwithstanding the FAA.
         But even these courts do not suggest that the statute and its history show that Congress meant to

supersede the FAA with respect to all consumer warranty claims. See Boyd v. Homes of Legend, Inc., 981

F.Supp. 1423, 1437-38 (M.D.Ala.1997) (Thompson, J.) (MMWA supersedes FAA only with respect to claims

of breach of a written warranty, not of unwritten express or implied warranties). The MMWA, after all, has

a "far more limited mission" than to become the "dominant regulator of consumer product warranties." Walsh

v. Ford Motor Co., 807 F.2d 1000, 1013 (D.C.Cir.1986). It prescribes different federal limitations and

regulations for different kinds of warranties and leaves other warranty law untouched.                 The Act's
consumer-suit provision, for instance, supplies a federal remedy for breach of written and implied warranties,

but not for oral express warranties, which remain the domain of state law. See 15 U.S.C. § 2310(d)(1); see

Walsh, 807 F.2d at 1015 (explaining why Congress excluded oral express warranties from the

consumer-remedy provision). The Act prescribes content and minimum standards for written warranties, see

15 U.S.C. §§ 2302, 2304, but it is content to supplement state-law implied warranties only by prohibiting

their disclaimer in certain circumstances, see 15 U.S.C. § 2308, and affording a federal remedy for their

breach. Closer to our subject here, furthermore, the Act's preference for nonbinding dispute resolution,
arguably to the exclusion of binding arbitration, expressly applies only to dispute-resolution mechanisms for

which written warranties provide as a prerequisite to suit. See 15 U.S.C. § 2310(a)(2), (3) ("The [FTC] shall

prescribe rules setting forth minimum requirements for any informal dispute settlement procedure which is
incorporated into the terms of a written warranty...."). Finally, the Act is arguably not universally hostile to

binding dispute resolution, at least not explicitly; the general policy is to "encourage warrantors to establish

procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute
settlement mechanisms." 15 U.S.C. § 2310(a)(1). The MMWA's text and history may thus show that any
arguable restriction on agreements providing for binding arbitration reaches those agreements relating to some

kinds of warranties, for instance for written warranties, Cunningham, --- F.3d at ----, but not others.

        This suspicion of a limited restriction on arbitrability means that a first step in arbitrability analysis

is to pin down the nature of the claim. Often that is simple, but it is not here because the complaint is vague.
It begins with a proper and concise recitation of the factual basis for all the Richardsons' claims. But then

it articulates the claims, grouped in three counts, in a way that leaves it unclear who the defendants are to each
claim, and what exactly is the warranty that the Richardsons believe to have been breached.

        Count I, the most likely home of the express-warranty claim whose arbitrability we are considering,
alleges that a "Defendant expressly represented that said manufactured home was free from defects in

materials and workmanship" (R.1 ¶ 15), and that "Defendants, Grand Manor and [Palm Harbor] have

repeatedly failed and refused to remedy the said defect after more than reasonable time and opportunities to

do so" (id. ¶ 16). This conduct, Count I says, "is in direct violation to [sic ] the written and oral

representations of warranties under the Uniform Commercial Code 7-2-313 and is a breach of the express

warranties given by the Defendants " (id. ¶ 17 (emphasis added)). One trait of the Count I claim is clear; it

is brought under state law, Alabama's version of the Uniform Commercial Code's express-warranty provision,
§ 2-313, and not under the consumer-suit provision of the MMWA, 15 U.S.C. § 2310(d). If Count I's

language did not suffice to make its legal basis clear, comparison to Count III would dispel all doubt. Count

III, expressly titled "Magnuson-Moss," alleges that "Defendant has violated the Magnuson-Moss Warranty

Act, 15 U.S.C. 2301 et seq." (Id. ¶ 25.) Count I's omission of the MMWA is thus telling.

        But Count I does not clearly disclose who the "Defendant" who made the warranty is, or how the
warranty was made. For that information, we have to resort to guesswork and inference by looking at the rest

of the complaint. Two features stand out. First, Count III—the Magnuson-Moss claim—also alleges a breach
of an express warranty, but it is plainly against Grand Manor alone. Although Count III, like Count I, alleges
only that an unidentified "Defendant" made a warranty, it explicitly mentions only Grand Manor's written

warranty, and then its ad damnum clause limits its basis to "Defendant Grand Manor's conduct." (Id. ¶ 28.)

Count II does not mention express warranties at all. If this complaint indeed contains an express-warranty

claim against Palm Harbor—and the parties and the district court all seem to think that it does—it must be

the one in Count I, and Palm Harbor must therefore be the "Defendant" who made the alleged representation.
Second, the only warranty that the complaint specifically identifies anywhere is the written one issued by
Grand Manor. That is the only one that Count I, by its unhelpful clause that "adopts and re-alleges all of the

above allegations" (id. ¶ 14) refers to. Because Grand Manor is the only warrantor under the written

agreement, it appears that in Count I the Richardsons are seeking to hold Palm Harbor liable for breach of

some oral express warranty that the complaint simply does not describe, notwithstanding the enigmatic

reference to "written ... representations of warranties." (Id. ¶ 17.) Because of these features of the complaint,

we conclude that the only express-warranty claim against Palm Harbor, and thus the only claim whose
arbitrability we are considering, is a claim under Alabama's UCC for breach of an oral express warranty. The

district court did not determine whether the Count I claim against Palm Harbor was for breach of written or
oral express warranty, and our conclusion does not therefore conflict with the district court's reading of the

complaint.

         That kind of state-law claim is simply outside any superseding scope of the MMWA. As explained

above, if the MMWA supersedes the FAA at all for any claims, it is by the negative implication of the
MMWA's provisions and history approving and regulating the prescription of nonbinding, as opposed to

binding, extrajudicial dispute resolution. See Cunningham, --- F.3d at ----. That regulation of nonbinding

dispute resolution is limited to provisions in written warranties. See 15 U.S.C. § 2310(a)(2), (3). The House

report's explanation of the policy behind this provision, too, focuses on "informal dispute settlement

procedure which is incorporated in any written warranty," H.R.Rep. No. 93-1107 (1974), reprinted in 1974

U.S.C.C.A.N. 7702, 7722. The FTC's implementing regulations follow suit, addressing only the requirements

for dispute-resolution provisions in written warranties. See 15 C.F.R. § 704.2(a). The negative inference we

can draw from this about Congress's intent with regard to arbitration of state-law oral express warranty claims
is thus very weak. The FTC's own conclusions about Congress's intent do not draw any inference about

arbitration of any claims other than ones based on written warranties; the FTC has explained that it

"examined the legality and the merits of mandatory binding arbitration clauses in written consumer product

warranties when it promulgated Rule 703," which prescribes standards for nonbinding dispute resolution
mechanisms that warrantors may impose as preconditions to a court action, and concluded only that Congress

did not wish to permit warrantors to demand binding arbitration as a condition of a written warranty. Final
Action Concerning Review of Interpretations of Magnuson-Moss Warranty Act, 64 Fed.Reg. 19700, 19708

(Apr. 22, 1999) (emphasis added). Thus, even if the text and history of the MMWA could imply a silent

supersedure of the FAA with respect to warranty claims, no such inference could fairly extend to a state-law
claim for breach of an oral express warranty. Refusing to rely on these weak inferences about oral express

warranties makes sense, moreover, given that the overwhelming focus of the drafters of the MMWA was

dispelling the deceit that was then common in manufacturers' written warranties on new products, not to
ensure that consumers had exclusively judicial remedies when they were misled by oral representations by

retailers. See H.R.Rep. No. 93-1107 (1974), reprinted in 1974 U.S.C.C.A.N. 7702, 7705-7711 (describing

the widespread abuse by manufacturers in the issuing and honoring of written warranties).
        The FAA thus still governs the arbitrability of the Richardsons' oral express warranty claim against

Palm Harbor. It makes agreements to arbitrate "valid, irrevocable, and enforceable" absent "such grounds
as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The Richardsons did advance

one such ground, unconscionability, before the district court, but the district court rejected it after detailed

briefing. That decision goes unchallenged here. The Richardsons make only an impassioned argument that

arbitration is bad for the Richardsons, as for all consumers, because it does not provide an adequate remedy.
The Richardsons do not, however, explain in any detail why an arbitrator could not award them full relief.

Indeed, the opposite would seem to be true for a dispute of this simplicity. Under the FAA, the arbitration
agreement must be enforced.

                                                 Conclusion
        For the foregoing reasons, the district court's order refusing to compel arbitration of the
express-warranty claim against Palm Harbor is reversed, and we remand for the district court to enter an order
compelling the Richardsons to arbitrate that claim.

        REVERSED AND REMANDED WITH INSTRUCTIONS.
