Joseph Kaufman & Associates is proud to announce that its CEO was quoted in an article published in the Daily Journal.
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Aspects Of California’s New Lemon Law Remain Unclear
By Antoine Abou-Diwan
A major update to California’s Lemon Law intended to streamline litigation has some consumer advocates incensed, with key aspects of the new rules still unclear ahead of them taking effect next year.
AB 1755 shifts the financial burden of a lemon car from the manufacturer to the consumer, and will trap people in defective cars, according to Rosemary Shahan, president of advocacy group Consumers for Auto Reliability and Safety. She cited a provision of the law that allows the manufacturer to deduct negative equity when calculating restitution.
“It will make it a lot easier for manufacturers to get away with not fixing cars under warranty,” Shahan said. “If you have negative equity – you owe more than you’re being offered – the manufacturers don’t have to reimburse you for the negative equity.” If the manufacturer does not repair a defective vehicle in a reasonable number of attempts, the existing law requires it to replace or repurchase the defective vehicle for the purchase price less an amount prorated for use prior to the discovery of the defect. AB 1755 is partly intended to reduce court congestion.
One in 12 new case filings (or 8.2%) in Los Angeles County Superior Court is a Lemon Law case. The number of Lemon Law cases filed there jumped from 6,220 in fiscal 2022-2023 to 8,182 in fiscal 2023-2024. This increase was responsible for 28% of the increase in civil filings generally (from 92,854 to 99,791) over the past year, according to court officials.
AB 1755 requires the consumer to notify the manufacturer in writing and provide a summary of the problems and repair history of the vehicle, and demand that the manufacturer replace or repurchase the vehicle. Manufacturers have up to 30 days to agree to replace or repurchase the vehicle, and another 30 days to complete the transaction.
Plaintiffs’ attorneys can be sanctioned $1,500 and defense attorneys can be sanctioned $2,500 for failing to comply with provisions relating to depositions. When he approved the law in September, Gov. Gavin Newsom acknowledged “substantive opposition” from consumer groups and, surprisingly, several automakers.
“While AB 1755 aims to speed resolution of Lemon Law claims and reduce litigation, many automakers, including smaller electric-vehicle automakers, have expressed serious concerns that some of the specific procedures prescribed in AB 1755 are unworkable for them,” Newsom wrote in his signing statement.
“In light of those concerns, the authors have agreed to introduce a bill early in the 2025-2026 legislative session that would amend the statute enacted by this bill to make its new procedures subject to election by a given automaker. Automakers that do not elect to utilize the new procedures to resolve Lemon Law claims on their vehicles would be subject to existing Lemon Law rules,” Newsom continued.
General Motors had the largest share of lemon law cases in California between 2018 and 2022, with 78 cars sold per case, according to a report from the Consumers for Auto Reliability and Safety Foundation. Mercedes-Benz had 324 car sales per case. Toyota had the smallest share of the cases, with 2,029 cars sold per case.
General Motors supported the new law.
“AB 1755 is a pro-consumer bill that will help impacted customers get back on the road faster. These common-sense reforms will close the loopholes in California’s Lemon Law that slow down the repurchase process for customers with legitimate claims and that clog up the court system,” Kia Floyd, GM vice president of state & local public policy, said in a press statement.
The company’s counsel for lemon law cases, Mary Lynn Arens McBride of Erskine Law PLLC, said she had no comment.
The Consumer Attorneys of California was a supporter of AB 1755.
“CAOC’s top priority is to make sure consumers can exercise their lemon law rights quickly and fairly,” Nancy Drabble, CEO of Consumer Attorneys of California, said in an emailed statement “AB 1755 implements new fast track deadlines and procedures that make our Lemon Law easier for consumers to use while ensuring California continues to lead the nation in safeguarding consumers’ rights.”
Plaintiffs’ side Joseph Kaufman and Associates’ founder said he planned to hire two new associates to handle lemon law cases but is waiting to see how the new law plays out.
“The issue is, there is a lot we don’t know,” Joseph A. Kaufman said. “What is so concerning and challenging is, the signing statement calls for a bill that allows car companies to opt out of.”
Kaufman said he has seen an increase in lemon law filings and an explosion in firms filing the claims.
“What hasn’t changed is car companies don’t like to be held accountable for defective products,” he said. “Yes, it is expensive to buy cars back, but they turn around and sell them.
Joseph A. Kaufman is the founder of Joseph Kaufman and Associates.
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