Lemon Law 101 By Timothy D. Robinett, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP There has been a dramatic spike in the number of lemon lawsuits filed in California over the last few years, and the recent trend has been for plaintiffs’ attorneys to name the selling and/or repairing dealerships as defendants. According to recent reports, there were 22,655 new lemon law cases filed in California in 2023, which represents an increase of 52% over 2022.1 According to a study performed by manufacturer defense counsel Bowman and Brooke, filings in Los Angeles County’s local branch courthouses alone saw a dramatic increase of 1,400% in the number of filings between 2021 and 2023. By all indications, this trend is not slowing down, and dealers need to be aware of the impact on their stores and the steps they can take to best protect their interests. History of California’s Lemon Law California first enacted the Song‑Beverly Consumer Warranty Act in 1970 to protect consumers from defective goods, including motor vehicles, and required manufacturers to repurchase or replace new vehicles that could not be repaired after a reasonable number of attempts. California’s lemon law has been amended several times since the original law was enacted to clarify the definition of what constituted a reasonable number of repair attempts, to expand the law to include the sale or lease of used vehicles that were still covered under the manufacturer’s new vehicle warranty, to apply the law to vehicles purchased and used primarily for business reasons (provided the vehicle weighed less than 10,000 pounds and the business had five or fewer vehicles registered in its name), and to create a presumption that a vehicle qualifies for repurchase or replacement if there have been four or more unsuccessful repair attempts (or two or more failed attempts if the defects presented a significant safety hazard), or if the vehicle has been at the dealership for more than 30 days for repairs within the first 18 months or 18,000 miles, whichever occurs first.2 The California lemon law further states that if the buyer can establish that the failure to comply with the provisions of the statute was willful, then the buyer may be entitled to a civil penalty of up to two times the amount of his/her damages.3 A buyer that prevails under the lemon law is also entitled to recover his or her attorney’s fees and costs. Not surprisingly, it is often the buyer’s attorneys’ fees and costs that are the driving force in the prolonged litigation and increasing numbers of filings of lemon law claims. Why Are So Many Dealerships Now Being Named in Lemon Lawsuits? While lemon lawsuits were traditionally a manufacturer’s issue, plaintiffs’ attorneys are now regularly naming the selling dealer and/or the repairing dealer in their lawsuits. There are various reasons why dealers are now being included in the lawsuits, including plaintiffs believing they have an extra potential pocket to pick for the recovery of damages (or a settlement), the ease in obtaining the dealership’s sales/lease and service records and depositions of dealer personnel through traditional discovery methods without having to subpoena the dealerships, and perhaps most importantly, to block the manufacturers from having the lemon lawsuits removed from state court into federal court. Most manufacturers prefer to defend lemon law claims before a federal judge (as opposed to state judges) because federal courts typically streamline the process and timeline, keep the plaintiff’s counsel on a tighter leash by limiting the number of depositions the buyer’s attorney may take and significantly reduce the length of the trial by giving each side an allotted time to present their case and not allowing witnesses that will simply repeat what has already MANNING LEAVER LEGAL LANE 28 California New Car Dealer Quarterly
RkJQdWJsaXNoZXIy MTg3NDExNQ==