Cong., 2d Sess. 42 (1974). Since the consumer may recover all litigation expenses, including attorney fees, in a successful Magnuson-Moss action, bringing a warranty action as a matter of federal rather than state law has advantages. Section 2310(d)(2).
It is important to note that "the federal action is parallel to and does not supplant state warranty remedies because the Act provides it does not restrict 'any right or remedy of any consumer under State law or any other Federal law.'" Schroeder, Private Actions under the Magnuson-Moss Warranty Act, 66 Calif. L. Rev. 1, 1 (1978) (quoting 15 U.S.C. § 2311(b)(1)). Some provisions of the Magnuson-Moss Act refer specifically to state law. For instance, section 2301(7) defines an implied warranty as a liability "arising under state law." See also Walsh v. Ford Motor Co., 588 F. Supp. at 1525. (". . . State privity rules do apply when determining the existence of an implied warranty cause of action under Magnuson-Moss." (and cases cited therein)).
In passing the Magnuson-Moss Act, Congress sought to provide an effective remedial mechanism for consumer claims involving relatively small amounts of damages. S. Rep. No. 151, 93d Cong., 1st Sess. 7 (1973); H.R. Rep. No. 93-1107, 93d Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & Adm. News 7702, 7724; Gorman v. Saf-T-Mate, 513 F. Supp. 1028, 1033 (N.D. Ind. 1981). This design is clearly manifested in section 2310(d)(2), which authorizes the Court to award a reasonable sum to defray costs and attorney fees as part of a judgment in favor of a consumer. Furthermore, the recissionary provisions of section 2310(a), as well as the inability to obtain relief for personal injury tort claims under Magnuson-Moss, indicate plainly the remedial nature of the Magnuson-Moss Act. See Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1068 (5th Cir. 1984) (Section 2311(b)(2) of the Magnuson-Moss Act prohibits claims arising from personal injury based solely on a breach of warranty, express or implied); see also Gorman v. Saf-T-Mate, 513 F. Supp. at 1033 (The "legislative purpose of [section] 2310(d) [of the Magnuson-Moss Act] is to provide a mechanism for consumer actions involving direct damages; it was not designed to reach personal injury claims.").
B. Magnuson-Moss Is Based In Contract Law
As this Court noted in an earlier opinion in this case, "Magnuson-Moss is strictly a warranty statute based in contract law. When Congress passed the Act, it incorporated [Uniform Commercial Code ("UCC")]-based State warranty law and not State tort law." Walsh v. Ford Motor Co., 588 F. Supp. at 1527; H.R. Rep. No. 1107, 93d Cong., 2d Sess. 6, reprinted in 1974 U.S. Code Cong. & Ad. News 7702, 7707. The central purpose of damages in actions for breach of contract or warranty is to place the plaintiff in the same position he would have occupied had the contract not been breached. See, e.g., 5A Corbin, Corbin on Contracts § 992 at 5 (1964); U.C.C. § 1-106(1). Consequently, punitive damages are not awarded for mere breach of contract, regardless of the motives or conduct of the breaching party. Id.; see generally Simpson, Punitive Damages for Breach of Contract, 20 Ohio St. L.J. 284 (1959).
Consistent with these well-established principles, nowhere in the Magnuson-Moss Act is mention made of punitive damages. Given the general unavailability of punitive damages in contract and warranty cases, it could be assumed that Congress would have made specific reference to punitive damages had they intended them to lie in Magnuson-Moss actions. Indeed, "in an act which specifically discusses attorney's fees and the kinds of claims permitted and prohibited, this absence of language could lead a court to conclude that Congress did not intend to have punitive damages lie in Magnuson-Moss causes of action." Walsh v. Ford Motor Co., 106 F.R.D. at 406.
The Court, however, need not speculate. It is clear that the Magnuson-Moss Act is primarily a remedial statute designed to protect consumers from deceptive warranty practices. Skelton v. General Motors Corp., 660 F.2d 311, 313-14 (7th Cir. 1981). Punitive damages are generally unavailable in such contract-based schemes as the Magnuson-Moss Act.
This general rule is subject to exceptions, though, as plaintiffs correctly point out. Punitive damages may be awarded, for example, when the conduct constituting the breach amounts to an independent tort or is accompanied by fraudulent conduct.
RESTATEMENT (SECOND) OF CONTRACTS § 355 (1979); see also, Sullivan, Punitive Damages in the Law of Contract: The Reality and the Illusion of Legal Change, 61 Minn. L. Rev. 207 (1977). Plaintiffs contend that this exception to the general prohibition of punitive damages in contract and warranty actions is encompassed by the open-ended language of section 2310(d)(1) which provides "for damages and other legal and equitable relief." To bolster this contention, plaintiffs survey state law on this issue and conclude that out of 51 jurisdictions, "45 or 46 . . . appear to agree generally with the RESTATEMENT position." Plaintiffs' Motion at 10.
In passing the Magnuson-Moss Act, Congress did not intend to nullify the authority found in the U.C.C. as regards warranties. H.R. Rep. No. 1107, 93d Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & Ad. News, 7702, 7706. Section 1-106(1) of the U.C.C. addresses remedies:
The remedies provided by the Act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential nor penal damages may be had except as specifically provided in this Act or by other rule of law.