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Magnusson-Moss Warranty Act

Discussion in 'Off Topic' started by FlasherZ, Sep 12, 2012.

  1. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    It was directed more toward the assertions by the lay people that Tesla has no idea what it's doing and will clearly be sued off the face of the earth. M-M is basic contracts and warranty 101. They have it covered, I'm sure.

    On the first part, you're correct - you can't have sales tie-ins as a condition of warranty. Other consumer protection laws (*not* M-M) require automotive manufacturers (inc. Tesla) to make available maintenance procedures and training for completing them. However, Tesla CAN dictate that certain maintenance items be performed by a qualified person, and then place the burden of proof upon you (the owner) or your agent to prove qualification -- Tesla will not have to prove disqualification. So expect an uphill battle trying to convince any court or jury (if you can past the matter-of-law elements) that any joe-blow SAE trained ICE mechanic is qualified to maintain a Model S. In the first year, it practical terms it means you will have to use Tesla's service.
     
  2. AnOutsider

    AnOutsider S532 # XS27

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    I know nothing of this law, and had only seen the warranty after you linked it (always ignored that thread, thought it was just "what if" speculation), but I did see this on page 10 of the PDF:

    so not sure if that means it DOES apply to their warranty or not.
     
  3. stopcrazypp

    stopcrazypp Well-Known Member

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    I probably should clarify, I'm talking about the stricter provisions of the law, which a warranty would have to meet to be considered a "full" warranty (see the list in the below article):
    http://en.wikipedia.org/wiki/Magnuson%E2%80%93Moss_Warranty_Act
    A "limited" warranty is still governed by the act, but it does not have to meet those terms (the manufacturer just has to make it very clear that the warranty is a "limited" one), which is why Tesla's warranty is not illegal as some have claimed in this tread.

    Under a "full" warranty, Tesla can't set any preconditions (including the annual service requirement) as a terms for the warranty. However, Tesla's warranty is a "limited" warranty so they CAN set such preconditions.

    As for the rest of the law, the point of contention is basically whether it is legal for Tesla to have an essential monopoly on servicing the car under the Act. That is legal under the law (otherwise there would be no need to push for the "right to repair" act). Tesla can't force you to use only Tesla branded parts or service at a Tesla location or void your warranty specifically because service was done by a different party than Tesla, but no part of the law says that the manufacturer is obligated to ensure that third parties can service the product. So it's totally legal for them to void your warranty for not performing proper maintenance, even if essentially they are the only ones who can do so properly. Specially, this is the "tie-in sales" provision of the law:
    http://business.ftc.gov/documents/bus01-businesspersons-guide-federal-warranty-law#Magnuson-Moss

    If you read the "legal" example in the "tie-in sales" part of that link, you will see that Tesla's statement on their warranty (which I quoted in my previous comment) reads almost exactly the same.
     
  4. neroden

    neroden Happy Model S Owner

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    #4 neroden, Sep 13, 2012
    Last edited: Sep 13, 2012
    Obviously, I DID read it. Did you?

    Section 2302(c), which applies to limited warranties as well as full warranties:
    Irrelevant.

    - - - Updated - - -

    That's a stupid assumption. We know for a fact that Tesla is violating federal copyright law, with civil penalties of $25,000 per car sold. I've been polite in not reporting it to the copyright holders yet. We know for a fact that Tesla violated Washington State deposit escrow law until they were caught. (EDIT: I withdraw the foregoing statement; I would have to recheck Tesla's annual reports, it may be the case that Tesla complied with Washington state deposit escrow law from day one.) We know for a fact that Tesla hasn't bothered to research the motor vehicle manufacturer and dealer laws in half the states in the US (it's right there in their annual report).

    I think it's actually quite clear that Tesla's general policy is to not even research the law until they get caught. This does save money. To be clear, I think that Tesla takes a different approach when it comes to *car safety* laws, but when it comes to other laws, their record is clear.

    Given the examples above, I'm 100% sure they don't.

    - - - Updated - - -

    Probably true, which is why I'm optimistic about Tesla. Still, now is the time for them to start getting this stuff right...

    - - - Updated - - -

    Right. (It would be interesting to see which laws.) Has Tesla done so yet? We await the manuals.

    Maybe some people would have trouble proving that, but some of us are anal-retentive perfectionists who keep records of everything, and would have no trouble whatsoever proving it.

    Except, of course, for Tesla's failure to specify maintenance procedures.

    This is, as I say, dancing on the border of violating federal law. It's nowhere near as cut-and-dried a case as the copyright license violations, of course.

    - - - Updated - - -

    I add this up much more conservatively, but still, the price of the car is
    49,900 + 7500 (no we don't all get to use the tax credit) + 990 (mandatory) + 180 (mandatory) = $58,570 before tax.
    And now, we find that they will try not to honor the warranty unless you spend an extra $600 (absolutely minimum, assuming that they actually provide manuals and training after the first year):
    = $59,170 before tax.

    The advertised price is a fake. Luckily, I *expected* it to be a fake from day one, because every car company pulls this garbage. But still.

    - - - Updated - - -

    Legally, no, because for it to have an impact legally would be a violation of federal law.

    In practice, Tesla agents have repeatedly been signalling that they intend not to honor the warranty if you don't get Tesla service. This is scummy behavior.

    Nobody knows.

    Apparently, if Roadsters are anything to go by, they will go over it from top to bottom in great detail for their own research purposes, and fix anything they find. It sounds quite thorough.

    Yes, according to Tesla.

    Yes. Anything which the car can self-diagnose will pop up on the touchscreen.

    The person who originally made the poll didn't think of the option and has asked if mods could add it after the fact.
     
  5. Beavis

    Beavis Signature 991

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    I was thinking he should edit the arrogant idiot part. No time or place for that and cowardly to say it in a forum rather than to someone's face.
     
  6. neroden

    neroden Happy Model S Owner

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    Thanks for the detailed information, this is very helpful.

    Excellent.

    It had better be. New York requires a safety inspection yearly. The maximum fee is $10, which is less than it costs the local shops to *do* the inspection, so they're likely to be fairly obnoxious about it. That had *better* be included in Tesla's annual service.

    That's good to know.

    This makes perfect sense. However, the list of service items needs to be published so that it's possible to have them serviced independently.

    Indeed. I think this situation is something Tesla can fix -- fairly easily, even. I also think the copyright license violations are something Tesla can fix. They just have to actually devote some time from competent staff to actually do such things.
     
  7. neroden

    neroden Happy Model S Owner

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    #7 neroden, Sep 13, 2012
    Last edited: Sep 13, 2012
    The person who said, clearly addressed to me, that I should read the Magnusson-Moss Warranty Act before talking about it? When, of course, I *had*?


    (Edit: Moderators have requested editing of this post, for reasons of their own; therefore it has been edited.)

    That is behavior which shows a lack of intelligence and a great degree of presumption, and for which that person should apologize.
     
  8. Beavis

    Beavis Signature 991

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    No, it's not.
     
  9. Larry Chanin

    Larry Chanin Model S Perf Sig 1055

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    So do you Arrogant Guys think that the discussion that "it looks like Tesla is about to violate the federal warranty regulations" stays? :wink:

    Larry
     
  10. Arnold Panz

    Arnold Panz Model Sig 304, VIN 542

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    OK, at least I see the possible connection to copyright law now, but let's unpack this a little. You say, "we know..." about the fact that (a) Tesla is using certain software (Linux and Busybox) in both Model S and Roadster, (b) that Roadster and Model S owners haven't received proper copies of the software as per the Gnu GPL, and (c) that Tesla has been notified of this more than once.

    Let's assume (a) is true (I'm not a tech guy and would need further proof than watching some videos, but OK), how do you know (b)? Can't many Gnu GPL users satisfy the requirement by offering to send a CD (or web access) to the code? How do you know that offer's not buried in the owner's manual or something? And how do you know that Tesla has been notified of this, such that it would be a "willful" violation?

    You seem to have made a lot of leaps of logic and fact to come to the inexorable conclusion that Tesla is violating the law, while I'm pretty confident that, at a minimum, Tesla's lawyers could put up a pretty good fight if anyone actually tried to enforce this against them.

    More importantly, Tesla has been selling/distributing Roadsters since 2008, and it's now 4+ years later and this hasn't been an issue, so if it's so obvious that they're violating the law, laches would eventually come into play here for whomever would (now) try to enforce the license.

    Again, I don't have nearly enough facts to come to any conclusion about whether there is a copyright violation here or not, but I could ask another hundred (or thousand) questions and still not be 100% sure, and I'm pretty certain you don't have sufficient facts to definitively say what you've been saying. If you have experience with the law you should know that you should never be that confident in your position.
     
  11. neroden

    neroden Happy Model S Owner

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    I guess so?

    I actually think they'll probably "do the right thing" now -- previous information from Tesla was problematic but the most recent information sounds like they're paying more attention now. That's the purpose of being hysterical about such things, incidentally.
     
  12. Larry Chanin

    Larry Chanin Model S Perf Sig 1055

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    Yes, and a very fine job of hysteria it was too. :biggrin:

    Larry
     
  13. dsm363

    dsm363 Roadster + Sig Model S

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    Magnusson-Moss Warranty Act/copyright issues

    This is a discussion on Magnusson-Moss Warranty Act/copyright issues that started in the Model S delivery thread.
     
  14. Robert.Boston

    Robert.Boston Model S VIN P01536

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    I will be interested in seeing if anyone uses the Massachusetts Right to Repair law, signed yesterday, to get access to the information and tools needed to diagnose Tesla vehicles. The challenge is that 98% of the parts are unique to the Model S, so even if you learn what broke, you're unlikely to have the part (or, possibly, even the tools) needed for the repair.

    My two cents on the pricing: it's a bargain for those living far from a service center, and a stiff price for the rest.
     
  15. neroden

    neroden Happy Model S Owner

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    I'm actually going to buy it, but I would have been happier if it had been part of the price of the car.

    I also actually think that Tesla *would qualify* for the exception to the Warranty Act's service-tie-in rules, and I think they should simply have requested the waiver from the FTC.
     
  16. Larry Chanin

    Larry Chanin Model S Perf Sig 1055

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    Well, at the risk of stating the obvious, obviously the Mods thought otherwise. :biggrin:

    Larry
     
  17. neroden

    neroden Happy Model S Owner

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    Bad news, folks: Tesla has said in so many words that unless they get an FTC waiver they are violating the Magnusson-Moss Warranty Act:

    Quote from George Blankenship, Chief of Nickel-and-Diming Customers:
    This is clearly illegal. By specifying "Tesla Certified" he has specified a branded service, which is *precisely* the form of tie-in which is banned by the Act.

    Tesla's lawyers are *incompetent*. Completely incompetent. There are at least three ways they could have retained essentially the same pricing scheme without breaking the law, and -- unless they got that FTC waiver -- they chose the lawbreaking way.
     
  18. neroden

    neroden Happy Model S Owner

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    FYI, Blankenship confirmed Tesla's probable violation of federal warranty law.

    The topic was moved to Off-Topic, so you can go read the quote there. But basically, I was right, the optimists were wrong, Tesla's lawyers are incompetent.
     
  19. hvb

    hvb Member

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    That might explain why they keep losing the law suits they file.
     
  20. Todd Burch

    Todd Burch Electron Pilot

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    I suspect this is actually good news for us, the customers. It will mean that we have more options when it comes to service.
     

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