California Lemon Law

Roughly 150,000 cars sold in America every year are classified as lemons: cars with repeated, unfixable problems. Lemons can come from any manufacturer: Toyota, Chrysler, Ford and almost every other manufacturer has built lemon vehicles over the years.

Lemon laws” enacted across the United States help protect consumers who purchase defective vehicles and compensate them for their losses. Additionally, a powerful federal law known as the Magnuson-Moss Warranty Act provides protection for consumers who purchase cars that are having problems under the manufacturer’s warranty. Some lemons may eventually be recalled by the manufacturer, if the problems are systemic.

The California lemon law is part of the Song-Beverley Consumer Warranty Act (Song-Beverley), which applies to all retail consumer goods sold in California that are covered by implied or written express warranties.

Song-Beverley says that every sale of retail consumer goods in California must be accompanied by both an implied warranty of merchantability and an implied warranty of fitness.

An “implied warranty of merchantability” means a product should work as expected. For example, if you buy a car, it is expected to start, safely convey you from one point to another, and then stop. If a car dealership sells you a brand new vehicle that fails to do any of these things, they have breached the implied warranty of merchantability.

An “implied warranty of fitness,” often called an “implied warranty of fitness for a particular purpose,” is a warranty implied by law stating if a seller knows or has reason to know of a particular purpose for which the good is being purchased by the buyer, the seller is guaranteeing that the good is fit for that particular purpose. For example, if you buy a truck with the intent of hauling materials or towing trailers and the seller guarantees the truck can do those things, an implied warranty of fitness for a particular purpose is created.

Song-Beverly states that if a manufacturer has provided express warranties for goods sold in California, they must maintain sufficient service and repair facilities in the state or authorize independent repair and service facilities to fulfill the terms of their warranties.

Per the California law, a car is considered a lemon if the following criteria are met within 18 months of the car’s delivery to the buyer or 18,000 miles on the vehicles odometer, whichever comes first:

  • The manufacturer or their authorized agents have made two or more attempts to repair a “non-conformity” covered under warranty considered deadly or dangerous if the vehicle is driven; or
  • They have made four or more attempts to repair the same problem with no success; or
  • The vehicle has been in the shop for more than 30 days while being repaired for any number of warranty-covered non-conformity.

The Tanner Act defines a “non-conformity” as a problem or defect that substantially impairs the use, market value or safety of the motor vehicle to the buyer or lessee.

California’s lemon law presumes, if these criteria are met, that the buyer or lessee of the lemon vehicle is entitled to a replacement vehicle or a refund of the purchase price. However, the manufacturer may argue that the criteria has not been met. For example, the manufacturer may claim the problems are either minor or somehow caused by the buyer.

Many vehicle manufacturers offer an arbitration process to California consumers. In an arbitration, a neutral third party (an arbitrator) decides whether a reasonable number of repair attempts have been made and what award, if any, should be granted to the consumer. If the consumer accepts the arbitrator’s decision, the manufacturer agrees to comply with it.

California’s lemon law requires that consumers must resort first to the manufacturer’s state-certified arbitration before pursuing litigation. The state-certified arbitration programs train arbitrators in the fair and fast resolution of disputes. Arbitration is free and funded by the participating manufacturers.

California-certified arbitration programs are informal dispute resolution processes, which do not require an attorney. Either side can choose to hire an attorney to represent them, though legal fees may not be awarded by the arbitrator unless the manufacturer has chosen to include them as an award in their arbitration application. The programs allegedly assist both consumer and manufacturer in collecting evidence to be presented from each side, so that it may be shared with both sides prior to the hearing.

There are, however, downsides to the arbitration process. Firstly, while attorneys are not required in the process, the manufacturer will almost certainly send an attorney or someone advised by an attorney to represent them at the hearing. Any consumer looking to pursue the arbitration process in California is advised to speak with a law firm beforehand.

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Secondly, one of the reasons arbitration is faster is because both sides have less rights to discovery: the legal process by which litigants can obtain evidence. In a lemon law case this puts consumers at a disadvantage, as they need discovery to gather evidence to prove their cases, and much of the evidence is held by the manufacturer and dealership.

Lastly, even though consumers have the option of rejecting the arbitrator’s decision, the manufacturer is allowed to introduce the arbitrator’s decision in trial. This could bias the jury against the consumer. In light of the foregoing, vehicle owners with valid lemon law claims should seek the advice and counsel of qualified attorneys with experience handling lemon law claims.

Before the arbitration begins, the owner should collect all documents relating to the vehicle and the repair process, including the letters exchanged with the manufacturer. They should also arrange for witnesses to appear at the hearing, including friends who have witnessed the vehicle’s problems. The vehicle in question should also be ready for inspection and test drive at the hearing.

The arbitrator may award additional repair attempts, a replacement vehicle, a refund of the purchase price, reimbursement for incidental expenses, or possibly nothing. The arbitrator could also decide against the owner and dismiss the complaint. After that, the only remaining recourse for an owner is to file a breach of warranty lawsuit within the statute of limitations.

California consumers with warrantied vehicle problems would be well served to contact a law firm for a consultation on what their next step should be, whether it be going through with arbitration or proceeding to trial. In court, consumers are guaranteed the ability to gather evidence under the state’s civil discovery rules, and the ability to have a qualified lawyer who can guide them through the often Byzantine legal process.

Because California lemon law claimants can make claims under the federal Magnuson-Moss Warranty Act, they can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. This is because the federal Act provides that the vehicle manufacturer shall pay the claimants’ attorneys’ fees if the claimant prevails against the manufacturer. Lemon law attorneys exist that will only collect attorneys’ fees if they succeed in obtaining a financial recovery for their clients.

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