Indiana Court of Appeals Holds Binding Arbitration Provision not Violative of Magnuson Moss or Indiana Lemon Law

In Walker v. Daimler Chrysler, Corp., the Indiana Court of Appeals rejected the Federal Trade Commission's conclusion that the Magnuson Moss Warranty Act precludes binding arbitration.  The Court determined nothing in the MMWA's text or legislative history precluded binding arbitration and also found that there was no inherent conflict between arbitration and the MMWA's underlying purposes, as arbitration would adequately protect consumers.  In so holding, the Court aligned itself with the two federal appellate courts and five of six state supreme courts that have decided the issue.

The Court of Appeals also found that binding arbitration was not violative of Indiana's Lemon Law statute.