Harley-Davidson Warranty Litigation: Seventh Circuit Narrows Magnuson-Moss Anti-Tying Reach and Reinforces Rigorous Market-Definition Standards

1. Introduction

On 15 August 2025 the United States Court of Appeals for the Seventh Circuit decided Edward Heymer v. Harley-Davidson Motor Company Group, LLC, No. 24-2111, an appeal arising from multidistrict litigation that challenged the iconic manufacturer’s warranty and parts policies under the Magnuson-Moss Warranty Act (MMWA) and under a variety of state antitrust statutes. Plaintiffs—Harley-Davidson owners from around the country—alleged that language scattered through the 2021 Owner’s Manual and related warranty documents tied continued warranty coverage to the purchase of Harley-branded parts, forcing them to pay premium prices and suppressing competition in the aftermarket for compatible components.

The district court had dismissed every claim under Fed. R. Civ. P. 12(b)(6). Writing for a unanimous panel, Judge Kirsch affirmed, while Judge Lee filed a partial dissent. The decision is now the leading federal appellate authority on two significant points:

When cautionary language in a manual or ancillary document does—and does not—create an actionable express or implied tie under § 2302(c) of the MMWA;
How rigorously plaintiffs must plead relevant product markets—especially alleged patriotic or American-made sub-markets—before a tying, attempted-monopolisation, or Kodak-style lock-in claim can survive dismissal.

2. Summary of the Judgment

The Seventh Circuit reached four central holdings:

No Anti-Tying Violation. The limited warranty itself excluded coverage only for damage caused by unauthorised parts—an exclusion expressly permitted by 16 C.F.R. § 700.10(c). General admonitions in other sections of the manual (Use only Harley-Davidson approved parts…) did not transform the warranty into an illegal tie.
Other MMWA Theories Rejected. Plaintiffs failed to allege undisclosed warranty terms (§ 2302(a)) or non-compliance with the pre-sale availability rule (§ 2302(b)).
No Antitrust Violation. Plaintiffs inadequately pleaded Harley-Davidson’s market power. A proposed market limited to American-made large road-going motorcycles was too narrow, and the complaint lacked facts showing a single-brand or patriotic sub-market. Therefore tying, attempted-monopolisation, and lock-in theories all failed.
Jurisdiction Resolved through Supplemental Jurisdiction. Without deciding the clash between CAFA and the MMWA’s more restrictive jurisdictional clause, the court relied on 28 U.S.C. § 1367 to uphold federal jurisdiction.

Consequently, the panel affirmed dismissal of all federal and state claims. Judge Lee would have permitted the MMWA anti-tying and state tying claims to proceed past the pleading stage.

3. Analysis

3.1 Precedents Cited and Their Influence

Skelton v. GM, 660 F.2d 311 (7th Cir. 1981) – The panel invoked Skelton to describe Congress’s purpose in passing the MMWA: simplifying warranties and protecting consumers.
FTC regulation 16 C.F.R. § 700.10(c) – Although officially advisory, the agency’s long-standing interpretation that warranties may exclude damage caused by unauthorised parts underpinned the majority’s reasoning and received substantial Skidmore deference (confirmed after Loper Bright).
Jefferson Parish Hosp. v. Hyde, 466 U.S. 2 (1984) – Cited for the classic four-part test to prove an antitrust tie, especially the need for market power in the tying product.
Eastman Kodak v. Image Technical, 504 U.S. 451 (1992) – Provided the doctrinal foundation for aftermarket lock-in; distinguished because Harley disclosed warranty terms ex ante and switching costs were too small.
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) – Quoted to clarify the diminished (yet still relevant) status of agency interpretations after the Court’s retreat from Chevron.
Brown Shoe v. United States, 370 U.S. 294 (1962) – Re-affirmed practical indicia for defining sub-markets; the panel found those indicia lacking for an American-made sub-market.
Will v. Comprehensive Accounting, 776 F.2d 665 (7th Cir. 1985) – Cited to show that a mere 20 % share in a broad market is normally insufficient to infer market power.

3.2 Court’s Legal Reasoning

(a) Contract-as-King: Warranty Language Controls

Because plaintiffs attached no warranty, Harley-Davidson filed copies; under the incorporation-by-reference doctrine the court could read the actual text, not plaintiffs’ characterisations. It repeated the Seventh Circuit’s rule that clear written terms override contrary allegations. After parsing the warranty, the panel concluded that it merely excludes coverage for damage caused by unauthorised parts—conduct expressly permitted.

(b) Distinction Between Conditioning and Excluding Damage Caused By

Section 2302(c) bans warranty conditions on the consumer’s use of a branded article – a classic tie. However, FTC guidance simultaneously authorises warranties to disclaim liability when unauthorised articles cause defects or damage. The panel held that the Harley warranty fell on the safe side of that regulatory line.

(c) Implied Ties Need Context

Plaintiffs emphasised manual statements: Use only Harley-Davidson approved parts. The majority acknowledged these look like the FTC’s own example of an implied tie, yet decided they were cured by the written warranty’s contrary precision. A consumer reading both documents would, in the court’s view, understand that warranty coverage is only jeopardised when non-HD parts cause a problem.

(d) Disclosure and Pre-Sale Availability Failures Unsubstantiated

The court faulted plaintiffs for not specifying any hidden warranty term and for ignoring other permissible methods (e.g., posting the warranty online) of satisfying § 702.3(b).

(e) Market-Power & Product-Market Pleading

For antitrust claims, plaintiffs alleged an 80 % share in American-made large roadgoing motorcycles. The panel treated that as an arbitrarily narrow sub-market and required practical indicia, which were absent. It emphasised that consumer patriotic preference is not enough; more must be shown (e.g., discrete customers subject to price discrimination). Without market power, tying and attempted-monopolisation claims collapse.

(f) Kodak Lock-In Distinguished

Unlike copier owners blindsided by Kodak’s policy shift, Harley buyers knew— or could easily have known— the warranty’s limitations before purchase, and the switching cost (losing part of a two-year warranty) was negligible compared with replacing a copier.

(g) Jurisdiction via § 1367

The panel sidestepped the CAFA/MMWA conflict by recognising supplemental jurisdiction over federal claims tied to properly invoked CAFA diversity jurisdiction—a practical roadmap for future MDL strategy.

3.3 Likely Impact

Warranty Drafting Playbook. Manufacturers may now pepper owner manuals with use only our parts warnings yet still escape § 2302(c) liability if the formal warranty carefully confines exclusions to damage caused by unauthorised parts.
Pleading Standards Elevated for Niche-Market Theories. Plaintiffs proposing sub-markets (e.g., American-made, eco-friendly only) must plead Brown-Shoe indicia with specificity—consumer surveys, price-elasticity data, or regulatory constraints—to survive Rule 12(b)(6).
FTC Enforcement vs. Private Actions. The panel reminded litigants that an FTC complaint or consent order is not substantive law. Private plaintiffs cannot piggy-back on the agency’s allegations without independent facts.
CAFA MDLs and Federal Question Carve-Outs. The Seventh Circuit implicitly blessed a procedural workaround: remove or transfer an MMWA class action (<50 named plaintiffs) on CAFA diversity grounds, then rely on supplemental jurisdiction for the federal counts.

4. Complex Concepts Simplified

Magnuson-Moss Warranty Act (MMWA): 1975 federal statute setting minimum disclosure and content standards for consumer product warranties and giving consumers federal claims for breach.
Anti-Tying Provision (§ 2302(c)): Bars conditioning a warranty on use of a particular brand’s part/service unless that part/service is provided free. Does not bar excluding coverage for damage caused by unauthorised parts.
Express vs. Implied Tie: Express tie: warranty language explicitly states use only XYZ parts or lose coverage. Implied tie: language or conduct that would lead a reasonable consumer to reach the same conclusion, even if not stated verbatim.
Tying Arrangement (Antitrust): Sale of product A (tying product) conditioned on purchase of product B (tied product). Unlawful per se or under rule-of-reason if seller wields market power in product A.
Aftermarket Lock-In (Kodak doctrine): Where buyers become locked into purchasing maintenance, parts, or services from the original seller because switching would be prohibitively costly, enabling post-sale monopolistic exploitation.
Brown-Shoe Sub-Market: A narrower cluster of products that functions as its own economic market based on industry recognition, distinct customers, unique characteristics, etc.

5. Conclusion

Heymer v. Harley-Davidson tightens the screws on warranty-based tying claims and signals that the Seventh Circuit will rigorously police product-market pleading at the threshold stage. The decision balances consumer-protection goals against manufacturers’ legitimate interest in protecting themselves from third-party parts that actually cause damage. Litigants must now come equipped with detailed factual allegations—preferably empirical data—to survive early dismissal when alleging sub-markets or implied warranty ties. Meanwhile, firms drafting warranties gained a judicially endorsed template: pair precise damage-causation exclusions with broad cautionary statements, and the risk of MMWA or antitrust liability dwindles.