For over fifty years, California’s “lemon” law has been regarded as a national leader in empowering consumers to compel automotive manufacturers to repair or replace vehicles under warranty that exhibit significant defects. Now, however, state legislators are in a rush to amend recent alterations to this law aimed at appeasing manufacturers accused of producing numerous defective vehicles, leading to an influx of related lawsuits burdening the judicial system.
The proposed revisions to the lemon law have sparked outrage among consumer advocacy groups and have left some lawmakers frustrated, creating a split among car manufacturers. Those facing numerous lawsuits are looking for more lenient terms, while others with fewer legal challenges believe they were not adequately involved in earlier negotiations. “What we are dealing with is a perplexing situation that seems, frankly, illogical,” remarked Senator Roger Niello, a Republican with familial connections to multiple car dealerships in the Sacramento basin, during a recent hearing. “It feels like being in a topsy-turvy world akin to Alice in Wonderland.”
In an effort to alleviate the strain on the court system, Governor Gavin Newsom endorsed legislation last year designed to expedite legal processes, including a stipulation that limits the duration in which consumers can file claims regarding defective vehicles. The new law also shifts more responsibility onto vehicle owners for initiating claims against manufacturers. This shift has led to a division among manufacturers: those facing a heavy volume of lawsuits seek greater preparation time for their defenses, while others claim the law favors those with a more litigious agenda.
Legislators are now racing against the clock to implement changes before the law is set to take effect on April 1. Such alterations require a two-thirds vote in the Legislature to enforce them immediately. Concerns over the complexity of a dual-tier lemon law—potentially undermining consumer protections and primarily benefiting companies with high lawsuit volumes—are being voiced. Consumer advocacy organizations point out that just four companies—General Motors, Stellantis, Nissan, and Ford—are responsible for over 70% of the lemon law cases in California.
The sentiments of individuals like Susan Giesberg, who dedicated nearly a decade to lemon law matters at the California Department of Justice, reflect growing frustrations. Giesberg, now retired, shared her own experience where she and her husband had to invoke their rights under the previous lemon law framework when their Chevrolet Volt malfunctioned last summer. “It’s astonishing that this would pass under Democratic leadership,” she remarked, highlighting how consistent support for the existing law has shifted in the current political climate.
To grasp how the current legislative climate came to be, one must reflect on the chaotic atmosphere of the previous August session. During a time when many bills were to be evaluated, two Democratic lawmakers—a senator from Santa Ana and an assembly member from San Jose—took a stalled proposal on child support and converted it into new legislation aimed at reforming the resolution process for lemon law disputes. This last-minute maneuver, known as a “gut-and-amend” tactic, has drawn criticism for its opacity.
It was revealed that Assembly Bill 1755 emerged as a product of secret negotiations involving major U.S. car manufacturers, attorneys, and judiciary members frustrated by the significant backlog of lemon law cases in their courts. Reports indicate that between 2018 and 2021, General Motors faced over 9,800 lemon law suits, constituting nearly one-third of all lemon law cases filed in the state. A General Motors representative defended the actions taken, labeling the legislation a “pro-consumer bill” that helps expedite compensatory processes for drivers while aiming to reduce court congestion.
The California definition of a “lemon” vehicle revolves around significant warranty defects that remain unresolved after several attempts at repairs by the manufacturer. If the company is unable to correct a serious defect after a “reasonable” number of attempts, they must opt to either replace the vehicle or issue a refund, as per stipulations from the California Department of Consumer Affairs. The lemon law applies to disputes relating solely to new vehicle warranties, with arbitration or court litigation being avenues to resolve such conflicts.
Since 2021, the volume of lemon law filings in California courts has seen an alarming rise, with nearly 15,000 cases documented in 2022 and over 22,000 anticipated for 2023—almost 10% of civil filings in Los Angeles County. Last year, lawmakers presented the notion that their new bill would simplify dispute settlements between consumers and auto manufacturers, minimizing time spent in court.
However, manufacturers like Tesla and several foreign automakers expressed concerns over their exclusion from the negotiation processes, leading to their opposition against the bill. In turn, consumer advocacy groups criticized the initiative, claiming it represents a transparent endeavor by automakers to undermine the lemon law, particularly from those who often receive lawsuits due to producing faulty vehicles.
The original legislation encompassed extensive text, totaling approximately 4,200 words, with supporting analyses exceeding 10,000 words—a number of lawmakers stated they felt unprepared to decide on such an intricate package in so little time. One representative voiced her concern that the lack of transparency in the bill’s negotiation process had made it difficult for them to present informed arguments to their constituents.
In the weeks following the signing of the new measure, the California Supreme Court issued a ruling which further diluted the lemon law’s effectiveness, asserting that the law does not mandate manufacturers to honor warranties for vehicles resold as used. Previously, courts had taken the stance that defective used vehicles sold within their original warranty time frame also deserved the protections afforded under the lemon law.
As discussions progressed into a new legislative session, Senator Aisha Wahab expressed anxiety about the potential misguidance a two-tiered system might create for car owners, especially among less informed buyers and immigrant communities. Lawmakers quickly indicated plans for future legislation to address concerns raised alongside the Supreme Court’s ruling, yet this suggestion prompted doubts about an already convoluted legal scenario becoming even more layered.
Despite growing discontent and skepticism voiced throughout the hearings, the proposed amendments eventually passed easily through the committee, albeit with notable dissent from certain members citing ongoing concerns about consumer safety and the responsibilities of manufacturers in containing defective vehicles. As the deadline approaches, legislators are left acknowledging the need for more comprehensive resolutions to protect consumers while navigating the complex landscape of automotive liability.
