Gov. Gavin Newsom signed an overhaul of California’s automobile defection bill on Sept. 29—with an announcement that the bill should become optional as soon as possible.
Assembly Bill 1755 reworks the Lemon Law by creating early paths to manufacturer buybacks of faulty vehicles, and increasing the legal burden to bring a case in court. It becomes active in April.
Newsom’s letter to the State Assembly announcing his approval of the bill said that bill authors have already agreed to change the bill next year. The amendments would make the changes optional, at the car manufacturer’s decision. If the manufacturer decides not to work under the new rules, they will work under California’s now defunct Lemon Law. The agreed-upon amendments would also require those selling allegedly defective cars to give notice of the car’s defects to their prospective buyers.
The bill’s language was secretly negotiated for six months by attorneys and car manufacturers, some of whom decided not to come to the table, according to negotiator and local attorney Greg Rizio. Rizio represented the Consumer Attorneys of California (CAOC) in negotiations, with incoming CAOC President Geoff Wells, CAOC CEO Nancy Drabble and CAOC attorney and lobbyist Saveena Takar. After the negotiations ended, the bill was pushed through both houses of the state legislature in the last week of the legislative session. The negotiations were necessary to prevent a ballot initiative threatened by manufacturers in the summer, said both Rizio and Assemblymember Tom Lackey (R-Palmdale).
“The reason for the urgency in introducing this bill now, instead of waiting until next legislative session, is that the deal includes an agreement for mutual moratorium between the Consumer Attorneys (of California) and the Civil Justice Association of California (CJAC) on filing a state or local ballot initiative,” Lackey told the Assembly.
“If the bill does not go through, the deal is off and our chance at reform will have been lost, likely for many years to come,” Lackey continued.
CJAC is a front for corporate interests, Rizio said. The group is funded by General Motors, Volkswagen Group of America and Ford Motor Co., among other corporations, according to the Sacramento Bee.
“This bill has drawn substantive opposition from several consumer groups and the majority of automakers, who were not party to the negotiations,” Newsom wrote.
The bill’s surprise appearance led to criticism by attorney and Assemblymember Rebecca Bauer-Kahan (D-Orinda). Bauer-Kahan was the only legislator in the Assembly Standing Committee on the Judiciary to vote against the bill on Aug. 30. She praised some of the bill’s effects, but said she needed more time to consider the bill, and disliked the lack of public negotiation.
“I agree very deeply with the Chair of Senate Judiciary that the changes to civil procedure as it relates to the timelines for discovery are great. I actually love that. As someone who practices in federal court, I got no issues with that. But there’s a lot more in here than that,” she said.
“There wasn’t a single person who represents the people of California who knew about this, and was a part of those conversations for months. Our obligation is to center the people we represent every day, and the consumers. And so what happened was these negotiations happened between the special interests. They dropped this in our lap, and they expect us to buy an argument related to the urgency that feels, to be honest, not real,” Bauer-Kahan said.
The bill’s effects
Currently, to bring a Lemon Law case in California, a plaintiff must call the manufacturer to ask for a buyback. AB 1755 would replace that with a requirement to email the manufacturer, creating a written record with automatic proof of the negotiation. Following the email, the manufacturer would have 60 days to buy back the car.
If the manufacturer does not buy back the car, and it is later found to be a lemon, they would be fined $50 for each day between the 60-day buyback limit and the settlement. If the consumer does not comply in good faith, and delays the buyback, the manufacturer would not be fined $50 each day.
“That’s the point of it—to get the consumer what they paid for, a good car, and to get the bad cars off the road,” Rizio said.
AB 1755 would also implement a statute of limitations: a car bought more than six years ago cannot be claimed as a lemon, and neither can a car no longer owned by the plaintiff. Currently, some litigants claim Lemon Law cases for cars they no longer own, Rizio said.
It also truncates the discovery process by requiring both the plaintiff and defendant to turn over all relevant documents within 60 days of the case being filed, submit to a deposition within 120 days of the case filing, and have a mediation within 150 days.
Read our previous coverage:
IE lawyer crafted Lemon Law reform bill on Gov’s desk
