SACRAMENTO – As automakers across the state of California continue to get hammered with lemon lawsuits, a civil justice reform advocate points to the legal fees plaintiff attorneys are after as the reason for the growing wave of litigation.
In the last six years, more than 30,000 complaints have been filed against the auto industry, and each year since 2015 the number grows. More than 8,000 were filed in 2018, and the pace of filings this year appears will surpass last year's.
The Song-Beverly Consumer Warranty Act, otherwise known as the California lemon law, defines the main obligations of manufacturers of consumer goods covered by implied and express warranties.
“The Act applies to all consumer goods that are sold at retail in the state of California and are covered by implied or written express warranties,” says the Magarian Law Firm in a CA Lemon Law Court post. “Particularly, it states that every sale of consumer goods at retail in California must be accompanied by implied warranty of merchantability and implied warranty of fitness, if the goods are required for a particular purpose and the buyer is relying on the manufacturer’s skill or judgment to select or furnish suitable goods.”
In short, when one purchases consumer goods in California, the retailer by default guarantees that the product is in order, adequately contained, packaged and labeled, and meets the promises or affirmations found on the label or container.
Within the thousands of cases pending in California courts, plaintiff attorneys have discovered a way to ensure larger payouts – not for the consumer but for themselves.
By way of example, in a 2017 case against Hyundai, the plaintiff went to trial, won the case, and was awarded close to $50,000. However, the plaintiff's lawyers – a group of four firms – asked for $267,000 in fees due to the amount of hours they claimed were spent working on the case.
“Plaintiff therefore moves for an order awarding attorney's fees in the $178,046 in attorneys' fees actually and reasonably incurred plus a lodestar multiplier of 1.5 in the amount of $89,023 for a total of $267,069,” according to case documents.
This line of thinking from plaintiff attorneys has raised a number of concerns from experts, some of whom believe reform is needed in order to restore the law’s integrity and original intention.
“The Song-Beverly Consumer Warranty Act was enacted to ensure that consumers who purchased cars that could not be successfully repaired would be assured a repurchase or replacement of their vehicle,” said Kyla Christoffersen Powell, president and CEO of the Civil Justice Association of California (CJAC).
“However, this law has been hijacked by certain abusive plaintiffs’ attorneys who are exploiting this system by continually delaying resolutions in order to extract huge legal fees. Reforms are needed to address these abuses, which undermine the law’s intent - ensuring consumers have a clear, direct path to the auto manufacturer to get their vehicles repaired, replaced or repurchased quickly and fairly.”
The auto manufacturer that has faced the most lemon lawsuits is by far Ford Motor Co. Since 2015, it has been hit with at least 8,791. General Motors faces the second greatest number of suits with at least 5,612.
Overall, more than 550 different law firms have filed suits.
The Knight Law Group stands out as the most prolific filer of Song-Beverly Act suits in California.