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How Lawyers for Manufacturers View the Lemon Law

Lemon Law Cases From the Defense’s Perspective

As someone who has worked on lemon law cases in-house for a manufacturer, who worked on them as a defense attorney for a successful law firm, who now works on them as a consumer’s attorney, and having been a disappointed consumer of products myself, I understand the various perspectives on lemon law.

Everyone is an individual, and they have their own opinions. With that said, there are some generalizations about lemon law cases and defective product compensation that emerge, particularly among lawyers who advise manufacturers on defending lemon law cases.

Lemon Law Favors Consumers

Lawyers that defend lemon law claims are in an awkward position. The law is powerfully consumer-oriented. If you have repeat repair attempts for a substantial problem with a vehicle or another costly product that is covered by warranty, it rarely makes sense to litigate. Defense attorneys want to bring their manufacturer clients good news, and if a case is assigned to them for defense, they naturally want to find a way to win it.

Yet, they usually have to recommend a settlement — and often a buyback of the problematic product — to the manufacturer. It can be frustrating as a litigator to always feel like you have a losing position and need to recommend that your client makes a maximum settlement offer for defective product compensation.

Sometimes, the defense is left trying to chip away at repurchase settlements, such as by arguing over the appropriate reasonable use deduction (i.e., mileage offset on a vehicle). Rather than winning motions and trials, these attorneys may feel “reduced” to adjusting claims. This can strike a blow at a lawyer’s ego. It’s also a lot less interesting work than going to court.

Additionally, defense lawyers typically get paid based on the time they spend working on a case. Looking over a few repair orders, and then recommending a full repurchase, as outlined in the lemon law, will produce far fewer billable hours than defending a case all the way to trial, which can take a year or more.

Realities of Lemon Case Defense

When you combine these five factors – frustration at feeling you are disappointing your client, the false equation of settlement with “losing”, the ego wrapped up in a lawyer’s self-image, less than satisfying legal work, and the fact that settling may be less lucrative than fighting a case – you have a powerful set of biases that motivate the lawyer to recommend fighting over settling.

People often ask me why defense attorneys fight lemon law cases they won’t win. The five factors above are primary motivators. For consumers, this is ultimately good news. If you have an eligible lemon law claim, there’s a good chance you will receive a favorable outcome.

Contact Us Today

If you need assistance evaluating a potential lemon law claim, our firm is an excellent position to help. Because we once defended manufacturers against lemon law cases, we know how they and their attorneys view the lemon law. Schedule a free case evaluation today to put our expertise to work for your case. We look forward to serving you.

Which Auto Manufacturer had the Most Lemons in 2017?

Information Surrounding Lemon Cases

One of the questions we get the most at Goldsmith West, whether from clients or friends and family, is: Who makes the most lemons?

We have been monitoring the lemon cases filed against auto manufacturers in the Central District of the Los Angeles County Superior Court (i.e., the Stanley Mosk Courthouse) for the past year. This is just one courthouse within one county in Los Angeles, though it perhaps may be the largest single courthouse for lemon law litigation in California and the United States. The rankings and numbers listed further below are taken from the data we have collected.

Lemon Cases by Statistics

There are a lot of factors that go into tracking lemon law statistics, and some disclaimers need to be made. These numbers come from litigated lemon cases that have appeared in the Stanley Mosk Courthouse. A portion of these cases may involve issues other than lemon law. However, by and large, they are lemon cases. Furthermore, there is a portion of lemon law cases filed at the courthouse that are omitted from this list, because the first named defendant is a dealership or finance company, not a manufacturer.

Another key factor to consider when reading these statistics is that they are based purely on lemon vehicle lawsuits. They do not factor in lemon law demands where the manufacturer resolved the matter without the need for a lawsuit.

You must consider that a manufacturer may have a relatively high rate of defects but also a customer service process that resolves cases before they become lawsuits. By contrast, a manufacturer may have a relatively low rate of defects for its vehicles, but it may deny and defend against lemon law claims so aggressively that it finds itself in court considerably more often than other manufacturers. However, there is no automotive brand that is completely without defects or lemon law claims.

2017 Lemon Case Statistics

Here is what the information we collected for 2017 shows:

  • There were over 3,000 separate lemon law cases, with at least one calendared date at the courthouse in 2017.
  • There were over 4,500 total lemon law appearances at the courthouse in 2017
  • The top three vehicle brands for lemon law appearances are Ford, General Motors (GM), and Fiat Chrysler Automobiles (FCA). The big three American brands (if Fiat Chrysler can be categorized as one) had the most lemon law case appearances. However, Ford led the way by far.
  • Top 3 brands for lemon law appearances, per 2016 market share are BMW, Nissan and Mercedes. When adjusted for market share, these brands stand out as having the highest rate of lemon law case appearances. Many of these vehicles are not 2016 calendar year purchases or 2016 model year; however, market share did not radically change over the several preceding years.

In fair play, it should be noted that some brands have a comparatively low lemon law case appearance rate, relative to volume of vehicles produced. Brands that stand out as having low lemon law case rates are Toyota, Volkswagen Group, and Subaru.

Conclusion

Every vehicle brand has lemons, and every brand has its process for handling them. However, regardless of a manufacturer’s process for handling lemon claims and vehicle lawsuits, it is generally in a consumer’s best interest to consult an experienced lemon law firm before accepting a conclusion for his or her case. If you need help sorting out the facts of a potential lemon case, please contact Goldsmith West today to schedule a free consultation.

California Lemon Law: The Song Beverly Consumer Warranty Act

The Song Beverly Consumer Warranty Act – also known as California’s lemon law – is a statute contained within the California Civil Code, beginning with section 1790. Simply put, it is a law that protects consumers who purchase goods – including but not limited to automobiles — covered by warranty.

The law defines express (i.e. written) and implied (i.e. imposed by law) warranties, and requires manufacturers who provide these warranties to take certain steps, such as maintaining repair facilities in state. The meat of the law, as specifically applied to motor vehicles, begins at California Civil Code section 1793.2.

This section of the Song-Beverly Consumer Warranty Act provides that if the manufacturer or its representative (usually, its authorized dealership) cannot conform the vehicle or other product to an express warranty within a reasonable number of attempts, it must promptly (meaning with little or no delay) replace or repurchase the product.

Section 1793.2 also provides a formula for a reasonable use deduction that is applied to the cost of the repurchase, or as a charge in the case of replacement for miles driven before the onset of the “nonconformity” (i.e., the defect covered by warranty).

Finally, section 1793.2 specifically provides the same lemon law rights to people who lease (as opposed to purchase) vehicles.

The Tanner Consumer Protection Act

The next section of the Song Beverly Consumer Warranty Act, California Civil Code section 1793.22, has its own title: “The Tanner Consumer Protection Act”. This section provides for a legal presumption for a vehicle that is within its first 18 months or 18,000 miles on the odometer, and has of the following occur: a safety issue is subject to repair two or more times, a non-safety related but still substantial issue is subject to repair four or more times, or the vehicle is out of service by reason of repair for 30 or more days.

Many people confuse this presumption for the lemon law itself. In fact, we see this misconception even among “experts.” The truth is, the presumption is rebuttable. Furthermore, it is neither necessary nor sufficient to prove a lemon law claim, which means you can have a qualifying lemon law claim without the presumption criteria, and you can have the presumption criteria but still have your lemon law claim disqualified.

The Tanner Consumer Protection Act also provides certain rules for manufacturers’ arbitration programs, as well as requires prior resort to arbitration by the consumer before asserting the presumption, if the consumer was properly notified. Finally, this section provides the definition of the term “nonconformity.”

The Automotive Consumer Notification Act

California Civil Code section 1793.23 also has its own title: “The Automotive Consumer Notification Act.” This section requires and provides rules for the permanent title branding of vehicles bought back pursuant to the California lemon law.

Title branding is what happens when a vehicle is totaled in an accident, subject to flood damage, etc. The vehicle is said to have a “salvage title,” the purpose of which is the same as a common salvage title: to protect future purchasers of the vehicle from ignorance that it has had problems. A lemon brand is not as devastating to the value of the vehicle as a salvage title, but it is significant. It may reduce the value of the automobile by 25% or more.

California Civil Code Section 1794

The most important section of the Song Beverly Consumer Warranty Act left to discuss is California Civil Code section 1794, which governs the available damages to the product. In addition to the calculation of the repurchase and replacement remedies described above, these available damages include: incidental and consequential damages, attorney’s fees, and the availability under certain conditions of a civil penalty.

The attorney’s fees provision is perhaps the most important provision in the law, because this is what allows law firms like Goldsmith West to represent consumers free of charge. The civil penalty, which can be awarded in an amount of up to two times actual damages, is also significant, as it creates leverage against a manufacturer that attempts to avoid payment on a claim due to stone walling.

Conclusion

The Song Beverly Consumer Warranty Act establishes California’s lemon law. Because the act contains different parts that have different applications, it’s helpful to speak with a lemon law firm to learn how the act applies to a potential lemon law claim. If you have a situation that you feel may be covered by the act, please contact Goldsmith West today to schedule a free consultation.

Myths About Lemon Law

Filing a Lemon Law Claim

How lemon law works is frequently misunderstood. Commonly believed myths surrounding filing a lemon law claim are part of the reason why. To help you understand how lemon law works and whether filing a lemon law claim is an option, we present 14 misconceptions about lemon law.

I need X amount of repairs and Y amount of days in the shop to qualify for lemon law.

This myth is not surprising. Even seemingly reputable sources — including law firms and local government agencies — make errors regarding these two types of lemon law qualifications.  Most of the errors are made in an effort to simplify and explain how lemon law works in terms of a rule of thumb.

The truth is, while here are certain numbers regarding repairs and days in the repair shop that establish a legal presumption that the vehicle is a lemon, there is no hard and fast rule that establishes a judgment that the vehicle is a lemon.

With or without the presumption, your car is a lemon if a reasonable person would find that it has had too many repair attempts or spent too much downtime in the shop. Your car may be deemed a lemon after as few as two repair attempts, or no repair attempts in cases such as a spontaneous fire that burns your car to a total loss before the defect can be repaired. Along this line of reasoning, safety issues generally require fewer repair attempts than non-safety related issues.

The reasonableness standard comes down to the arguments lawyers could make before a jury or judge at trial. If those arguments are persuasive enough, the case will usually be settled instead of going to trial.

I’ve waited too long or put too many miles on my car to file a lemon law claim.

We hear this frequently, and it’s usually untrue. In California, the statute of limitations (SOL) for filing a claim is four years from the date you knew or should have known your car was a lemon. This is a long window, and it requires the application of a reasonableness standard, which means lawyers can make arguments about when the statute of limitations began to run.

With a five-year powertrain warranty and a four-year statute of limitations, it’s not outside the realm of possibility that a car could be 9 years old with 120,000 miles on it and still be competently argued to be a lemon. Don’t make a decision about your vehicle without fully understanding how lemon law works. Let us be the judge of whether you have waited too long.

I can’t file a lemon law claim because I didn’t keep copies of my repair records.

Repair orders are important. In most lemon cases, they are the key evidence in determining how many repair attempts were made, how many days a vehicle spent in the shop, and whether the repair history is reasonable based on the defect.

However, if you didn’t keep copies of your repair records, don’t despair. Because the records are invoices for payment by you — or by the manufacturer, in the case of repairs made under warranty — dealerships keep copies of repair orders for years. They must give you these records at your request.

Filing a lemon law claim is not worth the hassle.

Many consumers are discouraged from filing lemon law claims by the idea that it will be a lot of work. In reality, beyond collecting your documents, your attorneys will do nearly all of the work. If your case lasts awhile, you may have to give a deposition for several hours or go to trial for several days. However, most cases settle before they get that far.

Filing a lemon law claim is not worth the time.

Some lemon law cases settle in a few weeks, while others are litigated for months. This can be frustrating for consumers, and manufacturers know it. However, keep in mind that the situation cuts both ways. Motor vehicles are depreciating assets. If a vehicle will likely be deemed a lemon, the manufacturer, who will eventually buy back and liquidate the vehicle, increases its own downside by failing to repurchase it in a timely manner.

Meanwhile, if the car is safe and functional besides the defect(s) — or even if they have been repaired after an unreasonable number of attempts — you can continue using the vehicle, even though the manufacturer will ultimately owe you reimbursement for the vehicle, including the payments you continue to make if the vehicle was purchased or leased.

Because I sold or traded in my vehicle, I missed my chance to file a lemon law claim.

California case law has established that getting rid of a lemon vehicle does not end your lemon law rights. Therefore, even if you have disposed of your lemon, you can file a lemon law claim according to the same four-year statute of limitations that applies to lemons that haven’t been disposed of.

I’m better off speaking to customer service than going to a lawyer.

Customer service claims managers often play the “good cop, bad cop” angle, saying something to the effect of, “You’re better off dealing with me. If you go to an attorney, it’s out of my hands, and you may not get what I’m offering you.” This is almost never the case. What they offer initially is almost always the minimum that is available later, regardless of whether you seek legal counsel.

However, if you are not working with an attorney, customer service will almost always offer you less than a full statutory lemon law remedy. This has been our observation throughout over a decade of experience working on lemon law cases from both sides: the plaintiff and the defense.

We have seen cases where a prospective client was hesitant to seek a lawyer’s help and endured months of stone walling, only to eventually ask our firm for assistance, and subsequently receive double the compensation originally offered after a single letter was sent to the manufacturer.

I can’t bring a claim because the dealer wrote “no problem found” on the repair orders.

You owe the manufacturer a reasonable repair opportunity, but the point of the lemon law is that manufacturers don’t get to arbitrarily decide that your vehicle is not a lemon. Even if the dealer fails to make the repair, or fails to attempt to repair the vehicle, it is still considered a repair opportunity.

Unfortunately, some consumers get discouraged by the “no problem found” response and stop bringing their vehicle in for repair opportunities. You are better off continuing to bring the vehicle in for diagnosis and repair while it is under warranty. If the dealer finally repairs the vehicle, that is great. But if not, you have strengthened your lemon law case.

I can prove my car is a Lemon by showing what a terrible experience I had.

This isn’t true. You may have told your friends and family about how defective your car is, it may be a running joke among your coworkers, and your significant other may refuse to go out on a date in the vehicle for fear of it breaking down. However, in most cases, the vehicle is not legally a lemon until you have given the dealer reasonable repair opportunities.

The best way to do this is to take the car to the dealership early and often within the warranty period for any problems you experience, and make sure that the dealer accurately records your concerns on the repair order. Hopefully, this will lead them to fix the vehicle. If not, you have documented that you gave them the chance, which can only strengthen your lemon law claim. Too often, we hear from people who suffer car problems in silence, and only realize later that they have lost lemon law rights by not wanting to be seen as a “complainer”.

My dealership is trying to help me resolve my lemon law claim.

Lemon law is usually an obligation of the manufacturer and not the dealership. Furthermore, lemon law buybacks and trades may even benefit dealers by allowing them to make money by selling a second car to the same customer. However, it’s usually not safe to assume that a car dealership is on your side. Our experience is that car dealers are usually trying to help themselves sell a car or get out of a legal jam. Be wary of “good samaritan” car dealers.

People that file lawsuits are greedy.

While this is obviously true in some cases, it’s not true generally, and it’s a harmful assumption. Most of our clients have never filed a lawsuit before, and most never will again. In fact, many of them never have to file a lawsuit, because we reach settlement without litigation.

What people sometimes misunderstand is that manufacturers can only spread costs associated with their lemon vehicles across their business if enough lemon owners don’t pursue lemon law claims. If every consumer required manufacturers to take back their lemons under the law, they would stop selling lemons.

My car has had recalls, so it’s a Lemon.

Recalls play an important role in many lemon law cases, but they do not by themselves establish that your car is a lemon. Strictly speaking, you need to make legal arguments about your own vehicle and your own experiences to establish a lemon law claim.

I have had problems, but I don’t think they rise to the level of lemon law.

Don’t be so sure. Our years of legal experience inform our firm’s opinion of what a lemon law claim looks like. We will give you an in-depth analysis for free, and we have no interest in encouraging claims that are unlikely to make a recovery. Why not listen to our fast, free, and confidential analysis of how lemon law works before deciding how to proceed?

Arbitration is always good (or always bad) for my lemon law case.

Deciding whether to proceed and how to proceed if a manufacturer invites you to its arbitration program is an important decision. It is true that consumers lose more often at arbitration than in court (which shouldn’t be surprising, considering that Manufacturers fund their own arbitration programs). However, this doesn’t mean that arbitration should always be avoided.

Choosing not to participate can actually deactivate certain portions of the Lemon Law. The language around arbitration in the statutes is highly discrete and not well understood, even by some lemon law attorneys. You should always take caution to make sure you make an informed decision about arbitration.

Contact Us Today

Our firm specializes in helping consumers understand how lemon law works and pursue compensation for lemons when a legal claim is justified. To learn more about filing a lemon law claim and how lemon law works, contact Goldsmith West today to schedule a free consultation.

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