Heymer v. Harley-Davidson Motor Company Group, LLC

Filing 55

DECISION AND ORDER signed by Judge William C Griesbach on 6/5/2024 GRANTING Harley-Davidson's Motion to Dismiss and DENYING as moot Harley-Davidson's Motion to Strike Certain Class Allegations, 47 Motion to Stay the Claims of Certain Pla intiffs Pending Arbitration. Plaintiffs' consolidated amended complaint is dismissed. The dismissal is without prejudice, and Plaintiffs will be allowed 30 days from the date of this order in which to file an amended complaint. If no amended complaint is filed within the time allowed, the case will be dismissed. (This document relates to all cases. Associated Cases: 2:23-md-03064-WCG et al) (cc: all counsel)(Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
IN RE: HARLEY-DAVIDSON AFTERMARKET
PARTS MARKETING, SALES PRACTICES,
AND ANTITRUST LITIGATION

Case No. 23-MD-3064
Honorable William C. Griesbach

This document relates to:
All Cases
DECISION AND ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS
In this multidistrict litigation, fifteen plaintiffs, who purchased Harley-Davidson
motorcycles from various dealerships and reside in eleven different states, claim that Defendants
Harley-Davidson Motor Company Group LLC and Harley Davidson Motor Company Inc.
(collectively, Harley-Davidson) used its warranty to force Harley owners under warranty to
purchase Harley-Davidson-branded parts, instead of other available aftermarket parts. Plaintiffs
assert that Harley-Davidson’s conduct violates the Magnuson-Moss Warranty Act (MMWA), 15
U.S.C. § 2301 et seq., as well as state antitrust and consumer protection laws. They also assert
claims of fraud and unjust enrichment. This case was transferred to this court by the United States
Judicial Panel on Multidistrict Litigation on February 8, 2023. On July 17, 2023, Plaintiffs filed a
consolidated amended class action complaint. This matter comes before the court on HarleyDavidson’s motion to dismiss. For the following reasons, the motion will be granted.
LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure challenges
the sufficiency of the complaint to state a claim upon which relief may be granted. Fed. R. Civ.
P. 12(b)(6). Rule 8 mandates that a complaint need only include “a short and plain statement of
the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Supreme

Court has held that a complaint must contain factual allegations that “raise a right to relief above
the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a plaintiff is
not required to plead detailed factual allegations, he or she must plead “more than labels and
conclusions.” Id. A simple, “formulaic recitation of the elements of a cause of action will not do.”
Id. In evaluating a motion to dismiss, the court must view the plaintiff’s factual allegations and
any inferences reasonably drawn from them in a light most favorable to the plaintiff. See Yasak v.
Ret. Bd. of the Policemen’s Annuity & Benefit Fund of Chi., 357 F.3d 677, 678 (7th Cir. 2004).
Under the incorporation-by-reference doctrine, “a court may consider, in addition to the allegations
set forth in the complaint itself, documents that are attached to the complaint, documents that are
central to the complaint and are referred to in it, and information that is properly subject to judicial
notice.” Williams v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).
ALLEGATIONS CONTAINED IN THE CONSOLIDATED
CLASS ACTION AMENDED COMPLAINT
Harley-Davidson was founded in 1903 and, by 1920, had quickly become the largest
motorcycle manufacturer in the world. Consolidated Amended Complaint (CAC) ¶ 26, Dkt. No.
33.

Plaintiffs are fifteen individuals who purchased Harley-Davidson motorcycles from

dealerships in various states between June 2016 and February 2022. Id. ¶¶ 6–19. As of June 2022,
Harley-Davidson sold, as a bundle, a motorcycle and a warranty valid for 24 months. Id. ¶ 30.
This limited warranty begins “from the earlier of (a) the date of the initial retail purchase and
delivery of the motorcycle from an authorized Harley-Davidson dealer; or (b) the third anniversary
of the last day of the model year of the motorcycle.” Id.
Plaintiffs assert that the limited warranty covers repairs only if the consumer has all
services and repairs undertaken by an authorized Harley-Davidson dealer and uses only
replacement parts and accessories from authorized Harley-Davidson manufacturers for the
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duration of the limited warranty. Id. ¶ 102. In other words, customers cannot use third-party
manufactured parts or other aftermarket parts for repairs. Plaintiffs contend that, by conditioning
sales of motorcycles to the limited warranty’s restrictions, authorized Harley-Davidson dealers sell
warranty-related services, replacement parts, and accessories at a premium compared to other
motorcycle repairers and that Harley-Davidson is able to extract higher-than-usual profits from the
repair business. Id. Plaintiffs claim that Harley-Davidson illegally tied its motorcycles, and the
factory warranties that go with them, to its parts, and that Harley-Davidson parts are overpriced as
a result.
Plaintiffs also assert that, even when customers have endeavored to obey HarleyDavidson’s dictate to choose only Harley-Davidson-branded parts, they still risk losing warranty
coverage. Id. ¶ 32. They allege that Harley-Davidson seeks to limit warranty coverage even
beyond the scope of the warranty’s language. Id. Plaintiffs claim that, by incentivizing dealers to
void warranties, Harley-Davidson is able to profit by selling the part but avoiding the repair labor
costs. Id. ¶ 35.
Plaintiffs allege that Harley-Davidson has substantial market power in both the Americanmade, new, large roadgoing motorcycle market and the Harley-Davidson compatible parts market.
Id. ¶¶ 39, 93. They assert that Harley-Davidson monopolizes the large American-manufactured
motorcycle market to coerce customers into not purchasing compatible parts from its competitors
by unlawfully tying its warranty to its parts. Id. ¶¶ 97–98.
The consolidated class action amended complaint contains 90 counts: Wisconsin antitrust
law, Wis. Stat. §§ 133.01 et seq. (Count 1); Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et
seq. (Count 2); unjust enrichment – common law (Count 3); fraud – common law (Count 4);

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fraudulent concealment/omission – common law (Count 5); various state fraud and antitrust laws
(Counts 6–90).
ANALYSIS
A. Magnuson-Moss Warranty Act Claims
Plaintiffs assert that the terms of Harley-Davidson’s limited warranty violates the
Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. § 2301 et seq. The MMWA is a “consumer
protection statute that requires transparency in warranties on consumer products and establishes
minimum criteria for different types of warranties and warranty-like products.” Ware v. Best Buy
Stores, L.P., 6 F.4th 726, 728 (7th Cir. 2021). Plaintiffs assert that Harley-Davidson violated the
MMWA in a number of ways. The court will address each theory in turn.
1. Tying Provision
Plaintiffs claim that Harley-Davidson’s limited warranty violates the MMWA’s so-called
“tying provision” by conditioning the limited warranty on the use of authorized Harley-Davidson
dealers and authorized Harley-Davidson manufacturer replacement parts and accessories. CAC
¶ 102.

The MMWA provides that a warrantor may not condition its written or implied

warranty “on the consumer’s using, in connection with such product, any article or service (other
than article or service provided without charge under the terms of the warranty) which is identified
by brand, trade, or corporate name.” 15 U.S.C. § 2302(c). The Federal Trade Commission’s
(FTC) interpretation of the MMWA states that “[n]o warrantor may condition the continued
validity of a warranty on the use of only authorized repair service and/or authorized replacement
parts for non-warranty service and maintenance (other than an article of service provided without
charge under the warranty or unless the warrantor has obtained a waiver pursuant to section 102(c)
of the Act, 15 U.S.C. § 2302(c)).” 16 C.F.R. § 700.10(c). It explains that “provisions such as,

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‘This warranty is void if service is performed by anyone other than an authorized “ABC” dealer
and all replacement parts must be genuine “ABC” parts,’ and the like, are prohibited where the
service or parts are not covered by the warranty.” Id. Plaintiffs argue that the language of the
limited warranty itself, as well as statements contained in the Owner’s Manual, fall within the
group of statements prohibited by the MMWA and § 700.10(c).
Harley-Davidson argues that the MMWA regulations allow a warrantor to limit liability
for damage caused by unauthorized parts or modifications. Section 700.10(c) “does not preclude
a warrantor from expressly excluding liability for defects or damage caused by ‘unauthorized’
articles or service; nor does it preclude the warrantor from denying liability where the warrantor
can demonstrate that the defect or damage was so caused.” Harley-Davidson contends that, when
all of the statements Plaintiffs rely on are read in context, it is clear the limited warranty excludes
warranty coverage for damage caused by unauthorized parts, consistent with § 700.10(c), and
implements an EPA Consent Decree under which certain performance modifications will void the
powertrain warranty.
As to the limited warranty itself, the Harley-Davidson Limited Motorcycle Warranty is
valid for 24 months “starting from the earlier of (a) the date of the initial retail purchase and
delivery of the motorcycle from an authorized Harley-Davidson dealer or (b) the third anniversary
of the last day of the model year of the motorcycle.” CAC ¶ 30. The exclusions section of the
warranty, states, in relevant part:
This limited warranty will not apply to any motorcycle . . . 1. Which has not been
operated or maintained as specified in the owner’s manual . . . [and] 4. Which has
off-road or competition parts installed to enhance performance, a trailer hitch, or has
other unapproved modifications (even if these modifications include genuine
Harley-Davidson parts and accessories that are not approved for use on your
motorcycle). These modifications may void all or parts of your new motorcycle
limited warranty. See an authorized Harley-Davidson dealer for details.

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Id. ¶ 31. The warranty also excludes coverage for “[d]efects or damage impacting the functionality
of powertrain components in a motorcycle that has been tuned using a tuner or calibration that was
not covered by a California ARB Executive Order or otherwise approved by EPA.” 2019 HarleyDavidson®

Owner’s Manual: Sportster® Models, H-D SERVICE INFORMATION PORTAL,

https://serviceinfo.harley-davidson.com/sip/content/document/view?viewLatest=true&id=18075
47410618958196&groupId=16#443844!!12!6625 (last visited June 5, 2024). Under the 2017
Consent Decree entered into between the EPA and Harley-Davidson, Harley-Davidson was
required to “deny all warranty claims for functional defects of powertrain components if any
Defendants have any information to show that such vehicle was tuned using a Tuning Product that
was not covered by California ARB Executive Order or otherwise approved by EPA.” Dkt. No.
42-12, at ¶ 14(a).
Harley-Davidson asserts that, under general principles of contract interpretation, “contract
language is given its plain and ordinary meaning.” See Young v. Verizon’s Bell Atl. Cash Balance
Plan, 615 F.3d 808, 823 (7th Cir. 2010) (citing Pitcher v. Principal Mut. Life Ins. Co., 93 F.3d
407, 411 (7th Cir. 1996)). It contends that the fact that the limited warranty states that the use of
unauthorized parts “may void” the warranty does not mean that it “will void” the warranty and
thus does not create a prohibited tie. See Defs.’ Reply Br. at 14, Dkt. No. 54 (citing Dunbar v.
Kohn Law Firm, S.C., 896 F.3d 762, 765 (7th Cir. 2018) (“An unsophisticated consumer would
not understand the word ‘may’ to mean ‘will.’”).
Plaintiffs argue that the court should not differentiate between “may” and “will” because
“may” merely means “will in some circumstances.” Pls.’ Br. at 21, Dkt. No. 52. Even under this
construction, Harley-Davidson’s warranty does not include a prohibited tie by conditioning “the
continued validity of a warranty on the use of only authorized repair service and/or authorized

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replacement parts for non-warranty service and maintenance.” See § 700.10(c). In other words,
because Harley-Davidson’s limited warranty does not state that using non-Harley-Davidson parts
will affect the warranty, it has not improperly tied the warranty to use of Harley-Davidson parts.
Harley-Davidson further asserts that the Owner’s Manual provisions referenced in the CAC
do not create tie-in provisions that violate the MMWA. First, Plaintiffs point to the first sentence
of the “Note” in the “Service Records” section, which provides that “[t]he use of parts and service
procedures other than Harley-Davidson approved parts and service procedures may void the
limited warranty.” CAC ¶ 116. Harley-Davidson contends that Plaintiffs have read this provision
out of context because they ignore the second sentence in the paragraph. “Contracts must be read
as a whole, and the meaning of separate provisions should be considered in light of one another
and the context of the entire agreement.” Young, 615 F.3d at 823. The second sentence states,
“Any alterations to the emission system components, such as the intake and exhaust system, may
be in violation of motor vehicle laws.” 2019 Harley-Davidson® Owner’s Manual: Sportster®
Models, H-D SERVICE INFORMATION PORTAL, supra. When the provision is read as a whole, the
Service Records Note does not create an impermissible tie. Instead, the provision addresses the
types of modifications that may void the powertrain warranty as mandated by the EPA Consent
Decree. In any event, like the warranty itself, this provision does not provide that using nonHarley-Davidson parts will affect the warranty and thus does not contain an improper tie.
Plaintiffs also refer to certain provisions in the “Warranty and Maintenance” and “Keeping
It All Harley-Davidson” sections of the Owner’s Manual that state:
Use only Harley-Davidson approved parts and accessories that have been designed,
tested, and approved for your model and model year motorcycle. . . . Genuine
Harley-Davidson parts are engineered and tested specifically for use on your
motorcycle. Insist that your authorized Harley-Davidson dealer uses only genuine
Harley-Davidson replacement parts and accessories to keep your Harley-Davidson
motorcycle and its limited warranty intact.
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CAC ¶ 114. They also refer to a provision in the “Warranty and Maintenance” section stating that
“[u]se of aftermarket performance parts may void all or parts of your limited warranty. See an
authorized Harley-Davidson dealer for details.” Id. ¶ 116.
Harley-Davidson asserts that when the Warranty and Maintenance and Keeping It All
Harley-Davidson provisions are read as a whole, Harley-Davidson is only warning that
“unapproved and untested parts can cause performance and quality problems.” Defs.’ Reply Br.
at 14. Those sections provide:
Warranty and Maintenance
This owner’s manual contains your new motorcycle limited warranty and your
owner’s maintenance record.
It is your responsibility as the owner to follow the maintenance schedule at the
mileage intervals as specified in the owner’s manual. All of the specified
maintenance services must be performed on schedule to keep your limited warranty
valid.
Some countries, states or other locations may require all regular maintenance and
service work to be done by an authorized Harley-Davidson dealer for your limited
warranty to remain in effect. Check with your authorized Harley-Davidson dealer
for local requirements.
1. Make an appointment with a Harley-Davidson dealer for inspection and service
prior to the first 1,600 km (1000 mi), and as soon as possible after any issues
arise.
2. Bring this owner’s manual with you when you visit your authorized HarleyDavidson dealer to have your motorcycle inspected and serviced.
3. Have the dealer technician sign the maintenance record in the owner’s manual
at the proper mileage interval. These records should be retained by the owner
as proof of proper maintenance.
4. Keep receipts covering parts, service or maintenance performed.
These records should be transferred to each subsequent owner.
Use only Harley-Davidson approved parts and accessories that have been designed,
tested and approved for your model and model year motorcycle.

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Use of aftermarket performance parts may void all or parts of your limited warranty.
See an authorized Harley-Davidson dealer for details.
Harley-Davidson authorized dealerships are independently owned and operated and
may sell and install parts and accessories that are not manufactured or approved by
Harley-Davidson for use on your motorcycle. Therefore, you should understand
that Harley-Davidson is not and cannot be responsible for the quality, suitability, or
safety of any non-Harley-Davidson part, accessory or design modification,
including labor, which may be sold and/or installed by authorized Harley-Davidson
dealerships.
Keeping It All Harley-Davidson
Genuine Harley-Davidson parts are engineered and tested specifically for use on
your motorcycle. Insist that your authorized Harley-Davidson dealer uses only
genuine Harley-Davidson replacement parts and accessories to keep your HarleyDavidson motorcycle and its limited warranty intact. Not all Harley-Davidson parts
and accessories are appropriate for your model or model year motorcycle.
NOTICE
It is possible to overload the vehicle’s charging system by adding too many electrical
accessories. If the combined electrical accessories operating at any one time
consume more electrical current than the vehicle’s charging system can produce, the
electrical consumption can discharge the battery and cause damage to the vehicle’s
electrical system. (00211d)
NOTE
Installing off-road or competition parts to enhance performance may void all or parts
of your limited warranty. See the Harley-Davidson Motorcycle Limited Warranty
in this owner’s manual or an authorized Harley-Davidson dealer for details.
2019 Harley-Davidson® Owner’s Manual: Sportster® Models, H-D SERVICE INFORMATION
PORTAL, supra.
When the provisions are read in their entirety, Harley-Davidson is simply noting that it
would not be responsible for defects or damage caused by “unauthorized” articles or service. This
limitation is proper under § 700.10(c). As to the provision indicating that “[u]se of aftermarket
performance parts may void all or parts of your limited warranty. See an authorized Harley-

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Davidson dealer for details,” CAC ¶ 116, use of aftermarket performance parts may void the
powertrain warranty under the EPA Consent Decree.
In short, Harley-Davidson explains to buyers that the limited warranty does not cover
damage caused by unauthorized modifications, which is authorized by the MMWA, and that
modifications to improve performance voids the powertrain warranty, as required by the EPA
Consent Decree. Accordingly, Plaintiffs have failed to state a claim that Harley-Davidson’s
limited warranty violates the MMWA.
2. Disclosure Rule
Plaintiffs also allege that the warranty violates the MMWA’s “disclosure rule.” Under the
MMWA, a warrantor must “fully and conspicuously disclose in simple and readily understood
language the terms and conditions of such warranty.” 15 U.S.C. § 2302(a); see also 16 C.F.R.
§ 701.3(a)(2) (requiring warrantors to provide a “clear description and identification of products,
or parts, or characteristics, or components or properties covered by and where necessary for
clarification, excluded from the warranty”).

This requirement is designed to “improve the

adequacy of information available to consumers, prevent deception, and improve competition in
the marketing of consumer products.” 15 U.S.C. § 2302(a).
Plaintiffs allege that Harley-Davidson violates the MMWA because “it conceals the full
terms of the Limited Warranty and instead instructs consumers to consult with a Harley-Davidson
dealer for full details.” CAC ¶ 123. Even though Plaintiffs received the Limited Warranty
documents, id. ¶ 124, Plaintiffs contend that Harley-Davidson has “secret standards that could only
be learned, if at all, by consulting a dealer or by costly trial and error that, at best, risked voiding
the warranty.” Pls.’ Br. at 27, Dkt. No. 50. But Plaintiffs have not alleged which additional
warranty terms were not included in the warranty documents they received or how the lack of such

10

information in the warranty impacted them. Therefore, Plaintiffs have failed to state a “disclosure
rule” violation.
3. Pre-Sale Availability Rule
Plaintiffs allege that Harley-Davidson failed to comply with the MMWA’s pre-sale
warranty obligations. See 15 U.S.C. § 3202(b). The MMWA requires the FTC to promulgate
rules “requiring that the terms of any written warranty on a consumer product be made available
to the consumer (or prospective consumer) prior to the sale of the product to him.” 15 U.S.C.
§ 2302(b)(1)(A). The FTC’s pre-sale availability rule is codified at 16 C.F.R. § 702.3. Section
702.3 describes the obligations of a warrantor, such as Harley-Davidson, to provide a copy of its
warranty with its product. That section states:
(1) A warrantor who gives a written warranty warranting to a consumer a consumer
product actually costing the consumer more than $15.00 shall:
(i) Provide sellers with warranty materials necessary for such sellers to comply
with the requirements set forth in paragraph (a) of this section, by the use of
one or more of the following means:
(A) Providing a copy of the written warranty with every warranted consumer
product;
(B) Providing a tag, sign, sticker, label, decal or other attachment to the
product, which contains the full text of the written warranty;
(C) Printing on or otherwise attaching the text of the written warranty to the
package, carton, or other container if that package, carton or other
container is normally used for display purposes. If the warrantor elects
this option a copy of the written warranty must also accompany the
warranted product; or
(D) Providing a notice, sign, or poster disclosing the text of a consumer
product warranty. If the warrantor elects this option, a copy of the
written warranty must also accompany each warranted product.
(ii) Provide catalog, mail order, and door-to-door sellers with copies of written
warranties necessary for such sellers to comply with the requirements set
forth in paragraphs (c) and (d) of this section.
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16 C.F.R. § 702.3(b)(1).
Plaintiffs allege that “Harley-Davidson violates this regulation because it does not provide
its authorized dealers with signs displaying the text of the Limited Warranty, or otherwise require
its dealers to make the Limited Warranty terms available to all customers before purchase.” CAC
¶ 121. But providing a sign with the text of the consumer product warranty is only one way that a
warrantor may comply with the requirements of § 702.3. In this case, Harley-Davidson provides
a copy of the written warranty with every warranted consumer product, in accordance with
§ 702.3(b)(1)(i)(A). Plaintiffs do not allege in the CAC that Harley-Davidson did not include a
copy of the written warranty with each motorcycle. Therefore, Plaintiffs have failed to state a
claim for a violation of the MMWA and § 702.3(b)’s “pre-sale availability rule.”
B. Antitrust Claims
Plaintiffs allege that Harley-Davidson’s conduct created an unlawful tying arrangement,
which they contend constitutes a restraint of trade and attempted monopolization. Agreements in
restraint of trade and attempted monopolization are prohibited under the Sherman Act, 15 U.S.C.
§§ 1–2.

Because federal law prohibits indirect purchasers, like Plaintiffs, who purchased

motorcycles through dealers, rather than directly from Harley-Davidson, from pursuing damages
under the Sherman Act, Plaintiffs make claims under various state antitrust laws. The parties
nevertheless agree that federal and state antitrust laws are generally subject to a similar analysis,
and they did not attempt to distinguish between federal and state law in their briefs. Accordingly,
for purposes of determining whether Plaintiffs have adequately alleged antitrust violations, the
court will also rely on federal cases.
“A tying arrangement is ‘an agreement by a party to sell one product but only on the
condition that the buyer also purchases a different (or tied) product.’” Siva v. Am. Board of
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Radiology, 38 F.4th 569, 573 (7th Cir. 2022) (quoting N. Pac. R. Co. v. United States, 356 U.S. 1,
5 (1958)). “The traditional antitrust concern with such an arrangement is that if the seller of the
tying product is a monopolist, the tie-in will force anyone who wants the monopolized product to
buy the tied product from him as well, and the result will be a second monopoly.” Sheridan v.
Marathon Petroleum Co. LLC, 530 F.3d 590, 592 (7th Cir. 2008). Not all ties are prohibited,
however, as “many ‘are fully consistent with a free, competitive market.’” Siva, 38 F.4th at 573
(quoting Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 45 (2006)). “A tie is illegal only
when the seller exploits its control over the tying product to force the buyer into the purchase of a
tied product and in so doing coerces the abdication of buyers’ independent judgment as to the tied
product’s merits and insulates it from the competitive stresses of the open market.” Id. (cleaned
up). To state a claim of an illegal tying arrangement, a plaintiff must allege four elements: (1) the
challenged tying arrangement must involve two separate products or services; (2) the defendant
has sufficient economic power in the tying market to restrain free competition in the tied market
product; (3) the tie affects a not-insubstantial amount of interstate commerce; and (4) the defendant
has some economic interest in the sales of the tied product. Id. at 574 (citing Reifert v. S. Cent.
Wis. MLS Corp., 450 F.3d 312, 316 (7th Cir. 2006)). As to attempted monopolization, a plaintiff
must allege “(1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a
specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.”
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993) (citation omitted).
Harley-Davidson asserts that the CAC does not contain sufficient allegations to establish a
tying arrangement because “Plaintiffs have not alleged that consumers were forced to buy HarleyDavidson parts in order to buy a motorcycle.” Defs.’ Br. at 42, Dkt. No. 20. It contends that,
because consumers could buy a motorcycle without buying Harley-Davidson parts, there is no

13

tying problem. Id. (citing Borschow Hosp. & Med. Supplies v. Cesar Castillo Inc., 96 F.3d 10, 18
(1st Cir. 1996) (“Where a tying product has not been withheld, there is no tie.”)).
Plaintiffs cite Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992),
for the proposition that an illegal tying arrangement can consist of forcing a promise not to buy
from a competitor, which it contends Harley-Davidson has done here. In Eastman Kodak Co.,
Kodak sold photocopiers and micrographic equipment as well as services and replacement parts
for its equipment. Id. at 454. Independent service organizations (ISOs) also serviced and repaired
Kodak’s equipment. Id. Kodak implemented a policy to make it more difficult for ISOs to
compete with Kodak in servicing its equipment. In particular, Kodak implemented a policy that it
would only sell replacement parts to “buyers of Kodak equipment who use Kodak service or repair
their own machines.” Id. at 458. It also limited “ISO access to other sources of Kodak parts.” Id.
Independent original-equipment manufacturers agreed that they “would not sell parts that fit
Kodak equipment to anyone other than Kodak.” Id. As a result of Kodak’s policy, ISOs were
unable to obtain parts from reliable sources, many ISOs were forced out of business, and customers
were forced to switch to Kodak service, even though they preferred ISO service. Id. at 459. The
Supreme Court recognized a tie between repair services and replacement parts: “[t]he record
indicates that Kodak would sell parts to third parties only if they agreed not to buy service from
ISO’s.” Id. at 463.
While Kodak imposed tying conditions on the purchase of parts, Harley-Davidson has not
forced such conditions here.

“A tie only exists where ‘the defendant improperly imposes

conditions that explicitly or practically require buyers to take the second product if they want the
first one.’” Aerotec Int’l, Inc. v. Honeywell Int’l., Inc., 836 F.3d 1171, 1178 (9th Cir. 2016)
(quoting 10 PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 1752b (3d ed. 2011)).

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In this case, Harley-Davidson has not tied the sale of motorcycles to parts. It has not imposed
tying conditions on the purchase of parts or forced buyers to promise not to buy parts from a
competitor. The CAC contains no allegations that buyers were explicitly precluded from buying
a motorcycle without agreeing to purchase Harley-Davidson parts.
Plaintiffs nevertheless assert that ties can be implied when a seller makes it too expensive
or burdensome to use a competitor’s product. Indeed, a tie need not be explicit to be found
actionable. See id. at 1179 (citations omitted). “When a defendant adopts a policy that makes it
unreasonably difficult or costly to buy the tying product (over which the defendant has market
power) without buying the tied product from the defendant, it ‘forces’ buyers to buy the tied
product from the defendant and not from competitors.” Collins Inkjet Corp. v. Eastman Kodak
Co., 781 F.3d 264, 272 (6th Cir. 2015) (citations omitted).
Plaintiffs’ theory is that customers purchasing new Harley-Davidson motorcycles (bundled
with warranties) were forced to buy Harley-Davidson parts or risk losing warranty coverage or
completely revoking warranty protection. Plaintiffs assert that, as a result, the terms of the
warranty make it too expensive or burdensome to use a competitor product. The CAC does not
contain allegations plausibly suggesting that foregoing warranty coverage is so costly as to be
considered economic forcing. Plaintiffs contend that they cannot effectively forecast the amounts
of any potential repairs or calculate the lifecycle cost of their motorcycles.

Instead, they

conclusorily assert that the risk of losing warranty coverage drives up the cost of owning a
motorcycle altogether.
But the alleged risk of losing warranty coverage in itself is not the type of economic
coercion or forcing that constitutes a tie under antitrust law. See DXS, Inc. v. Siemens Med. Sys.,
Inc., 991 F. Supp. 859, 864 (E.D. Mich. 1997) (“Plaintiff’s claim based on tying of warranted parts

15

and service cannot succeed because Defendant never required parts and service to be purchased
together.”). “[I]t is well established that warranties that are not sold as a separate product do not
result in consumer coercion if the warranty sets forth requirements” of the warranty’s applicability.
Fido’s Fences v. Canine Fence Co., 672 F. Supp. 2d 303, 312 (E.D.N.Y. 2009). That is because
limits to warranty protection “reflect a defendant’s unwillingness to extend free repair or
replacement services to usage of its products that it cannot control.” See Va. Panel Corp. v. MAC
Panel Co., 133 F.3d 860, 871 (Fed. Cir. 1997). In this case, new Harley-Davidson motorcycles
are bundled with a two-year limited warranty that lists certain restrictions that may void the
warranty. “Such language is a long way from requiring a buyer to purchase [the tied product] from
defendant as a condition of purchasing [the tying product].” RX Sys., Inc. v. Med. Tech. Sys., Inc.,
No. 94C50358, 1995 WL 577659, at *5 (N.D. Ill. Sept. 29, 1995); see also Gen. Motors Corp. v.
Gibson Chem. & Oil Corp., 786 F.2d 105, 110 (2d Cir. 1986) (holding that manufacturer’s
recommendation using approved fluid in automatic transmissions and warning that damage to
transmissions caused by the use of other fluids may not be covered by the automobile warranty “is
not the degree of coercion necessary to a tying arrangement”). In other words, even if buyers of
Harley-Davidson motorcycles had to forego warranty coverage to buy a non-Harley-Davidson
part, there is no illegal tying arrangement. See Marts v. Xerox, Inc., 77 F.3d 1109, 1112 (8th Cir.
1996) (holding that plaintiff did not establish a tying arrangement when the buyer is free to take
either the tying or tied product by itself—“[a]n owner of a new Xerox copier could forego the
benefits of the warranty, buy service from Xerox or an independent provider, and purchase
cartridges from the vendor of its choice”); RX Sys., 1995 WL 577659, at *5 (“A purchaser remains
free to buy pill cards from other suppliers and modify the machine accordingly so long as it is

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willing to forego the protections provided by the warranty.”). For these reasons, Plaintiffs have
failed to allege an illegal tying arrangement that violates antitrust laws.
As to their attempted monopolization claim, Plaintiffs rely on the same purported
anticompetitive conduct they relied on for their tying claim. Because Plaintiffs have not alleged a
tying violation, they have failed to allege facts to support that Harley-Davidson’s actions also
constitute an attempt to monopolize. See Airweld, Inc. v. Airco, Inc., 742 F.2d 1184, 1191 n.3 (9th
Cir. 1984) (“[Plaintiff’s] failure to prove a substantive tying violation precludes it from claiming
that [defendant’s] actions in that respect also constituted an attempt to monopolize.”).
Accordingly, Plaintiffs’ antitrust claims are dismissed.
C. Fraud-Based Claims
Plaintiffs assert claims of common law fraud and fraudulent concealment as well as various
claims based on allegations of fraudulent conduct. Harley-Davidson asserts that Plaintiffs have
failed to plead these claims with particularity as required by Federal Rule of Civil Procedure 9(b).
Rule 9(b) requires that, “[i]n all averments of fraud or mistake, the circumstances constituting
fraud or mistake shall be stated with particularity.” Fed. R. Civ. P. 9(b). A plaintiff satisfies the
heightened pleading requirements of Rule 9(b) by alleging the “who, what, when, where, and how”
of the alleged fraud. Borsellino v. Goldman Sachs Grp., Inc., 477 F.3d 502, 507 (7th Cir. 2007)
(internal quotation marks omitted).
Plaintiffs allege that Harley-Davidson’s limited warranty provided Plaintiffs and class
members with false or misleading information. But what exactly Plaintiffs claim Harley-Davidson
misrepresented or omitted is not entirely clear from the allegations in the CAC. Plaintiffs allege
that the limited warranty indicated that Plaintiffs and class members would be unable to use
unauthorized Harley-Davidson parts on their motorcycles. CAC ¶¶ 165–66. Yet, the limited

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warranty states that “unapproved modifications (even if these modifications include genuine
Harley-Davidson parts and accessories that are not approved for use on your motorcycle) . . . may
void all or parts of your new motorcycle limited warranty.” Id. ¶ 31. In other words, the warranty
did not explicitly foreclose the use of non-Harley-Davidson parts as Plaintiffs suggest. Plaintiffs
also allege that Harley-Davidson indicated to Plaintiffs and class members that they would be
unable to repair their motorcycle unless they used authorized service providers. Id. ¶ 167. At the
same time, Plaintiffs claim that Harley-Davidson failed to disclose that the limited warranty
prevented Plaintiffs from repairing their motorcycles with their preferred service personnel or by
themselves. Id. ¶ 178. Because the allegations are internally inconsistent, they cannot state a claim
upon which relief can be granted.
To the extent Plaintiffs’ claims are based on their allegation that Harley-Davidson
misrepresented that Harley-Davidson’s repair restrictions were binding, even though such
restrictions are unlawful and unenforceable, Plaintiffs have failed to state a claim. Id. ¶ 168. The
warranty does not explicitly state that its restrictions “were binding and enforceable,” and the CAC
does not contain allegations to suggest when, where, or how Harley-Davidson made such
misrepresentations or omissions. See Schaer v. Newell Brands Inc., No. 22-C-30004, 2023 WL
2033765, at *2 (D. Mass. Feb. 16, 2023). Because the CAC fails to state a claim in accordance
with Rule 9(b), Plaintiffs’ fraud claims against Harley-Davidson must be dismissed.
D. Unjust Enrichment Claims
Plaintiffs also assert claims of unjust enrichment. They allege that, due to HarleyDavidson’s unlawful conduct, Harley-Davidson received and/or was conferred a benefit from
Plaintiffs through the purchase of Harley-Davidson motorcycles and compatible parts at supracompetitive prices. CAC ¶ 160. Plaintiffs assert that Harley-Davidson has and will continue to

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be unjustly enriched by the receipt of unlawfully inflated prices and profits for comparable parts
and that it is inequitable and unjust for Harley-Davidson to retain these profits. Id. ¶¶ 160–62.
Plaintiffs’ allegations of unlawful conduct are based on the same allegations as Plaintiffs’ other
claims. Because Plaintiffs’ other claims do not survive, Plaintiffs’ unjust enrichment claims suffer
the same fate. See Ass’n Benefit Servs. v. Caremark Rx, Inc., 493 F.3d 841, 855 (7th Cir. 2007)
(“[W]here the plaintiff’s claim of unjust enrichment is predicated on the same allegations of
fraudulent conduct that support an independent claim of fraud, resolution of the fraud claim against
the plaintiff is dispositive of the unjust enrichment claim as well.”). Accordingly, Plaintiffs’ unjust
enrichment claims must be dismissed.
CONCLUSION
For these reasons, Harley-Davidson’s motion to dismiss (Dkt. No. 41) is GRANTED.
Harley-Davidson’s motion to strike certain class allegations (Dkt. No. 44) and motion to stay the
claims of certain Plaintiffs pending arbitration (Dkt. No. 39) are DENIED as moot. Plaintiffs’
consolidated amended complaint is dismissed. The dismissal is without prejudice, and Plaintiffs
will be allowed 30 days from the date of this order in which to file an amended complaint. If no
amended complaint is filed within the time allowed, the case will be dismissed.
SO ORDERED at Green Bay, Wisconsin this 5th day of June, 2024.
s/ William C. Griesbach
William C. Griesbach
United States District Judge

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