A new class action lawsuit has accused Harley-Davidson of attempting to claim the whole hog when it comes to the market for repair parts for its iconic line of motorcycles, alleging the motorbike maker violated federal law by supposedly manipulating customers by allegedly using its warranty improperly as leverage.
The new class action lawsuit, filed in Chicago federal court on Jan. 23 by named plaintiffs Vladimir Lipkin and Anzhela Demkiv on behalf of themselves and others, asserts Harley-Davidson threatened to void the warranty on its bikes, if customers used aftermarket repair parts or non-affiliated shops to fix their motorcycles in place of so-called "genuine" Harley parts.
The complaint, which includes members of multiple states, focuses on the contention Harley-Davidson may have knowingly violated the federal Magnuson-Moss Warranty Act.
The law targets alleged merchant misuse of warranties. Its purpose was purportedly to make the language of warranties and disclaimers accessible to consumers, providing the Federal Trade Commission a means to allegedly prevent deceptive practices.
The complaint hedges on the allegation that Harley-Davidson leveraged its warranties in such a way that it violated the Magnuson-Moss Warranty Act by denying consumers of their right to choose parts from a competitor, an unlawful practice known as "tying".
By using its “monopoly power in the large, roadgoing American bike market (and specifically the manufacturer’s warranty bundled with the new bike)...", its alleged non-competitive practices, has restrained trade, unfairly solidifying HD's market share, harming customers, “by requiring (bike owners)...only use Harley-Davidson’s Compatible Parts – or else risk voiding the warranty.”
The oldest and most recognizable name in the large U.S. roadster motorcycle market, Harley-Davidson, according to its public reporting, controls 44.5% of the motorcycle market. It also possesses a robust share of the compatible parts market, and as such, by their own conduct, hurt businesses by creating a barrier for new competitors to enter the arena and have access to consumers, the complaint alleges.
The complaint asserts Harley's loyal customer base has been forced to pay more for parts and have been deprived of access to the full spectrum of aftermarket parts the industry could potentially provide.
The Federal Trade Commission has targeted Harley-Davidson in previous regulatory actions. In a similar class-action, the FTC issued an administrative order in June 2022 admonishing Harley-Davidson against future MMWA violations, ordering them to specifically add language to its warranties that protected customers from cancellation should they exercise their rights to purchase competitor parts or use unaffiliated workshops.
Plaintiffs are demanding a trial by jury, damages, legal fees and court costs.
Plaintiffs are represented by attorneys Elizabeth A. Fegan and Ling S. Wang, of the firm of Fegan Scott, of Chicago and Minneapolis; and attorney David Freydin, of Skokie.