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Los Angeles Times

When Life Gives You Lemons ...

Attorneys question whether California's 'lemon law' will affect car consumers as rules change Despite recent reforms aimed at reducing California courts' civil case backlog, changes to the state's so-called 'lemon law' appear to be doing little to stem the tide of vehicle warranty filings. Plaintiffs' attorneys say the changes have instead created a two-tiered system that diminishes consumer rights. Richard L. Stuhlbarg, a partner at Bowman and Brooke and leader of the firm's Warranty Practice Group who regularly defends vehicle manufacturers against warranty claims, said his firm had recorded 19,359 filings through June 2025, putting the year on pace to surpass 38,000 total filings, based on publicly available data. That would exceed the 30,190 filings recorded in 2024. By comparison, there were 22,655 filings in 2023, 14,892 in 2022 and 10,797 in 2021. 'Despite the lemon law changes, we have seen a big spike in filings,' he said. 'If the goal of the changes was to lessen the burden on the courts by reducing the number of filings and litigated cases, the objective data does not show that has happened.' The Song-Beverly Consumer Warranty Act, aka California's lemon law, entitles consumers to a refund or replacement if a new vehicle under warranty has substantial defects that the manufacturer or dealer cannot fix after a reasonable number of attempts. It also allows recovery of attorney fees and penalties against manufacturers. The historical spike in cases under the act was a key reason for the passage of Assembly Bill 1755 in 2024. The bill was notable for many reasons, not the least being the fact that it was cosponsored by the Consumer Attorneys of California (CAOC) and General Motors, in exchange for the Civil Justice Association of California (CJAC) abandoning any ballot initiative which would have placed a cap on contingency fees in the 2026 election cycle, an effort which CAOC said was being bankrolled by auto manufacturers. In turn, CAOC agreed to place a moratorium on any competing ballot measures. The California Judges Association also supported the reforms. While new procedures under the bill were designed to streamline cases and reduce filings, they only apply to manufacturers who choose to opt in to the new framework. That opt-in feature has become one of the law's most controversial elements, with critics arguing it has created confusion and inconsistency in how the lemon law is applied. The law introduced a new written notification requirement for vehicle owners seeking penalties against manufacturers for alleged warranty violations and requires them to retain possession of the defective vehicle while pursuing a claim, something which critics argued would shift the legal and financial burden of a defective vehicle to owners and away from manufacturers. Rosemary Shahan, president of advocacy group Consumers for Auto Reliability and Safety, said that the written requirements raise the issue of consumers not realizing they have to write directly to the manufacturer to assert their lemon law rights. 'AB 1755 allows manufacturers to ignore requests for warranty repairs from consumers who have not taken that additional step,' she said. Some of the changes, such as the pre-suit notification requirement and new 30- and 60-day response timelines for manufacturers, only came into effect on July 1. Others, such as a requirement that claims be filed within a year of the warranty's expiration but no longer than six years from the vehicle's purchase date, came into effect earlier this year. Richard Wirtz, whose firm Wirtz Law APC represents vehicle owners, said that the 'single biggest impact of AB 1755' was the reduction in time for consumers to bring a claim. While the previous legislation had allowed consumers to bring a claim within four years of a warranty's expiration, they now had one year and a maximum of six years from delivery of the vehicle, he explained. 'For warranties that are longer than six years, like Hyundai's basic 10-year warranty or some powertrain or emission warranties that are longer than six years, the automakers no longer have to actually fix anything under the warranty because there is no consequences to them and no remedy for the consumers after six years,' he said. It was too soon to fully assess the impact of the changes, given that some had only just gone into effect, said Joseph Kaufman, whose firm, Joseph Kaufman & Associates also represents car owners. However, it was already clear that the opt-in scheme was problematic. 'The biggest problem with the changes is that it creates a two-tier lemon law system, and this is confusing for consumers, and it's confusing for courts. And I'm not aware of any other consumer protection or any other statute really is optional at the election of the guilty party, so to speak. I think that that is a net negative,' he said. Another major issue, Kaufman said, is AB 1755's treatment of negative equity - the portion of a prior loan that exceeds the value of a trade-in. 'Negative equity was always considered to be an improper deduction in the context of lemon law repurchases and replacements. It was always considered to be part of the amount paid or payable,' Kaufman said. 'Now AB 1755 says if there was negative equity rolled into the deal by the selling dealership, the car company can subtract from the restitution amount the amount of that negative equity.' AB 1755 also requires the early exchange of discovery documents, expedited depositions and mandatory mediation, all within six months, for those manufacturers who choose to opt in. Stuhlbarg, who said that some of his clients had elected to opt in to the new scheme, said that these measures had delivered mixed results. 'Initial disclosures, there is a benefit to exchanging information early. My clients who have opted (in) have set up processes to comply with the document disclosure requirements,' he said, though he noted, 'There is confusion because some plaintiffs' firms argue against a protective order.' Kaufman said he supports the early mediation requirements and believes that 'requiring plaintiffs and defendants to both appear for deposition within four months of defendant's answer will help good lawyers and law firms and weed out the bad ones.' He said that he was still seeing manufacturers struggle to comply with disclosure and deposition requirements, while some refused 'to produce certain documents that they are now statutorily required to disclose.' While having agreed matters of examination helped streamline the deposition process for both sides, Stuhlbarg said, 'The early depositions have created scheduling demands because there are limited number of qualified witnesses.' He also raised concerns about consumer attorneys potentially using the new procedures to their advantage. 'Unfortunately, I expect consumer attorneys to request further depositions on multiple categories to drive up their fees. I routinely see over 50 matters for examination in a single deposition notice,' he said. Kaufman, Wirtz and Stuhlbarg all agreed the Song-Beverly Act would likely require further reforms. For Kaufman and Wirtz, the priority is addressing the California Supreme Court's decision in Rodriguez v. FCA US, which held that used cars sold with an unexpired portion of a manufacturer's warranty do not qualify as new motor vehicles under the law. 'What the California legislature really needs to focus on is making the Lemon Law clear that it applies to any vehicle that has any part of a new car warranty remaining. That is what the consumers in California need,' Wirtz said. Kaufman said, 'The California Supreme Court invited the legislature to take up the issue by changing the definition of 'new motor vehicle' to include used vehicles sold with a balance remaining on the original manufacturer warranty. We would like to see Sacramento address the Rodriguez case by including used vehicles in the definition of 'new motor vehicles.'' Stuhlbarg agreed that further lemon law reform was needed, though for different reasons. Judging by the current data on filings and AB 1755's aim to reduce backlogs, 'Further reform is needed to decrease the number of lawsuits,' he said. The Los Angeles/San Francisco Daily Journal is a publication for lawyers practicing in California, featuring updates on the courts, regulatory changes, the State Bar and the legal community at large.