While the state’s lemon law – the Song Beverly Consumer Protection Act – has served as a safeguard for car buyers, some plaintiff attorneys have also used it to extract large fee payments from car manufacturers, according to an advocate for civil justice reform in California.
“A lack of clarity in the law has incentivized plaintiffs’ attorneys to exploit the system by continually delaying resolutions in order to extract huge legal fees,” Kyla Christoffersen Powell, president and CEO of the Civil Justice Association of California (CJAC) said in an email response to the Northern California Record.
“But delaying resolution only hinders consumers who may wait years to be made whole while their attorneys are able to collect more and more in fees.”
In a recent case, two plaintiffs represented by the Knight Law Group of Los Angeles prevailed in their lawsuit involving an allegedly defective 2012 Dodge Durango. After the case was settled, their attorneys sought fees and costs in the amount of $136,270,60.
The defendants, FCA (Fiat Chrysler Automobiles), argued that the fees were excessive and included 16 instances of duplicative billing by another firm brought on the case, Wirtz Law.
U.S. District Judge Anthony J. Battaglia agreed and lowered the amounts by more than half, according to the Aug. 16, 2019 order granting in part the plaintiff’s motion for attorney’s fees.
Julie Griffiths of California Citizens Against Lawsuit Abuse (CALA) told the Record that lemon lawsuit filings have been on the rise.
“Ironically, I just pulled up a lemon lawsuit, and I see that in last 13 months, there were more than 1,000 filed, so I’d say they are fairly prolific, and could be attorney-driven,” Griffiths said.
The potential for legislative reform exists, but could obviously take some time given the state and nation's current state of affairs.
“We don’t support frivolous lawsuits,” Griffiths said. “We [CALA] continually push the Legislature for reform every year.”
Powell estimates that the number of cases has risen exponentially.
“Since 2015, yearly abuses of California's Lemon Law by plaintiffs’ attorneys have effectively doubled – even as consumer reports reveal average problem rates for reviewed auto models have declined,” Powell said. “This excessive litigation burdens our judicial system and hinders access to the courts for those who truly need it.”
An alternative to the court system exists, Powell added.
“There is a better way to address the needs of consumers who have purchased faulty vehicles without a lengthy and expensive court case. The Arbitration Certification Program (ACP) is a state certified program administered by the California Department of Consumer Affairs designed to ensure claims are processed within 40 days as opposed to an often-multi-year process through the courts,” Powell said.
It's also a concern for taxpayers when excessive litigation clogs the court system.
Wisconsin in 2013 enacted bi-partisan legislation to reform the state’s lemon law.
In a Statement of Support for the Bill (AB 200), the Washington, D.C.-based Alliance of Automobile Manufacturers wrote, “AB 200 closes loopholes and amends specific unfair provisions that have been repeatedly abused and led to absurd results. AB 200’s changes will fix these problems and make the Lemon Law logical, strong, and effective.”