Class Action Lawsuits Claim Costco, Amazon, Samsung Violated Federal Warranty Law

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Three proposed class action lawsuits respectively accuse Costco, Amazon.com and Samsung of violating the federal Magnuson-Moss Warranty Act.

The cases against Costco and Amazon claim the mega retailers have unlawfully failed to provide customers with access to the written warranties for certain products prior to the point of sale and have instead pushed consumers into buying their own protection plans and extended warranties.

Meanwhile, the lawsuit against Samsung claims the manufacturer has violated the Magnuson-Moss Warranty Act’s so-called “anti-tying” rule, which prohibits companies from conditioning the validity of their warranties on a customer’s use of only authorized repair services or replacement parts. 

The complaints, filed in Allegheny County, Pennsylvania state court on July 26, say the defendants’ violations of the federal warranty law have benefited the three companies at the expense of consumers, who are entitled to complete information regarding product warranties and the right to have their products repaired without voiding those warranties.

The similarly worded cases against Costco and Amazon explain that for any product that costs more than $15, a customer must be provided with access to any written warranty prior to the point of sale. According to the suits, retailers may provide such notice either by displaying the warranty “in close proximity” to the product or by putting up signs in prominent locations around the store to notify customers that they may view a product’s warranty upon request. 

The suits relay that these provisions protect a consumer’s right to “be fully informed” about a product’s warranty so they can more easily assess different products’ values in terms of their prices, features and warranty coverage.

According to the lawsuits, Costco and Amazon have failed to provide consumers with warranty information for “virtually all of the products—if not every single product—sold” in their stores and online. Instead, the suits allege, the retailers display information about their own extended warranties and protection plans that are available for purchase and simply instruct consumers to contact the manufacturers for more information about warranties that come with the products.

The plaintiff in the Costco case says she was unable to access any warranty information about a Samsung television she bought from the big box retailer until after she purchased the item. 

In the Samsung case, the same plaintiff who sued Costco takes issue with the manufacturer’s warranty on the TV she purchased—specifically Samsung’s requirement that warranty services must be performed by an authorized Samsung service center. According to the suit, this “stifling of competition” for repair services causes consumers to pay more for repairs and potentially have to wait longer before they can use their product since it must be fixed by an authorized service center.

“Based on the Warranty’s terms, Plaintiff is unable to repair the Product via a third-party, independent repair service without purportedly voiding her Warranty, thereby limiting Plaintiff to a fraction of the repair marketplace,” the lawsuit states. “Because Plaintiff is limited to a smaller marketplace for service and repair, it is likely she will encounter reduced availability among providers and higher prices for their services.”

The Magnuson-Moss Warranty Act’s anti-tying provision prohibits warrantors such as Samsung from conditioning the terms of their warranties on a customer’s use of “an article or service identified by brand, trade, or corporate name,” the lawsuit relays.

The plaintiff says she would consider purchasing other products from Samsung in the future but “does not wish to have her rights under the Anti-Tying Rule thwarted by Defendants’ unlawful warranty terms.”

The lawsuit is not seeking damages on behalf of consumers but requests that the court order Samsung to remove the provision in its warranty that allegedly violates the federal warranty law.

Similarly, the cases against Costco and Amazon seek only to compel the two retailers to comply with the Magnuson-Moss Warranty Act’s provisions regarding pre-sale warranty notice.

The lawsuit against Samsung looks to represent anyone in Pennsylvania who purchased a product subject to Samsung’s warranty anytime within the past three years and until the date of class certification.

The cases against Costco and Amazon look to cover anyone in Pennsylvania who purchased one or more products from the retailers that cost more than $15 and included a written manufacturer’s warranty.

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