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California’s Lemon Law has been gutted, leading to a significant erosion of consumer rights
By Joseph Kaufman
The end of the 2024 legislative session in Sacramento has confirmed a new reality for consumers and consumer protection attorneys in California, and in many ways has turned conventional wisdom on its head. As the dust settles, perhaps the most shocking revelation—or not so shocking to those who have been paying attention—is that Ronald Reagan, long seen as a conservative icon, turns out to have been a far greater champion of consumer rights as California’s Governor than Gavin Newsom.
Newsom, once hailed as progressive on some issues, has signed legislation, Assembly Bill 1755 (AB 1755), that dramatically weakens the consumer protections of the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), colloquially referred to as California’s Lemon Law. This draconian legislation has effectively eviscerated core protections that California consumers have relied on for decades to hold manufacturers accountable for defective products. Whereas car companies once had an affirmative obligation to repurchase or replace unsafe vehicles, changes to the law now place the onus squarely on the consumer to deal with the consequences of having purchased a defective vehicle. Despite automobiles being the largest purchase made by most Californians, the risks of a motor vehicle purchase turning sour will soon fall solely on the consumer, thanks to AB 1755.
Until Newson signed AB 1755, the Song-Beverly Act was one of the nation’s strongest consumer protection laws, and it placed strict requirements on automobile manufacturers when they sell a defective vehicle. Driven by public safety, the Song-Beverly Act mandated that manufacturers repurchase or replace vehicles if they are not repaired after a reasonable number of repair attempts. Auto manufacturers had a duty to monitor vehicle repairs in California and proactively contact consumers to offer replacements/repurchases before the consumer requests it, and if a manufacturer was found to have knowingly refused to comply with the law or set up obstacles in the path of lemon law relief, the manufacturer faced the possibility of civil penalties. The consumer was not required to contact the manufacturer to request a replacement before the manufacturer was obligated to replace/repurchase the vehicle. “[A] manufacturer is capable of becoming aware of every failed repair attempt. Computerized recordkeeping at dealership service departments could easily facilitate this task, even without any direct contact from the consumer to the manufacturer or any request for replacement or reimbursement to the dealership. It is thus apparent that a manufacturer need not be ‘clairvoyant;’ it need only demonstrate more initiative in honoring warranties.” Krotin v. Porsche Cars North America, Inc. (1995) 38 Cal.App.4th 294, 303.
The changes to the lemon law signed by Newson now require that consumers be aware of their lemon law rights and that they follow specific written notice procedures to obtain civil penalties, and it requires that consumers maintain possession of and continue making payments on unsafe vehicles during the pendency of a lemon law claim. Another change is to allow car companies to deduct negative equity added to car deals by unscrupulous car dealers, ensuring that consumers are ripped off twice on their trade-ins. These changes have eliminated the affirmative obligation to remove defective vehicles from the road and made it much harder for consumers dealing with vehicles that cannot be repaired.
Perhaps even more concerning is Newson’s signing statement for AB 1755. In it, Newsom hinted that consumers should not be allowed to sell vehicles if they think their vehicle might be a lemon, and he suggested that some car companies be allowed to opt out of provisions of the lemon law they do not like. His signing statement was based on the ludicrous notion that electric vehicles are made without any safety defects, and that in the march towards EV progress safety standards should no longer matter. AB 1755 appears only to be the beginning, with more pro-corporate, anti-consumer measures expected in the coming year. For many consumer protection advocates, this statement marks a troubling shift in the state’s approach to consumer rights.
The Song-Beverly Act has long been regarded as one of the most robust consumer protection laws in the nation, allowing Californians to seek legal recourse when they purchase faulty vehicles, appliances, or other products. However, the changes brought about by the new legislation significantly limit the ability of consumers to recover damages from manufacturers, introducing new hurdles that make it far more difficult to pursue claims.
Critics of the changes argue that this rollback benefits corporate interests at the expense of everyday Californians. Proponents, on the other hand, argue that the reforms are necessary to prevent what they see as an overly litigious environment that has burdened manufacturers and contributed to clogged courtrooms. The proponents of AB 1755 ignore that car companies are the ones who have clogged the courts by refusing to comply with the existing lemon law and then refusing to comply with the most basic of discovery. Not a thought was given by the drafters of AB 1755 to allow the initial discovery disclosure process brought by 2023’s changes to CCP § 2016.090 time to play out.
Nevertheless, the growing disillusionment with Newsom’s policies is palpable, especially among those who had previously viewed his administration as a strong advocate for consumer rights. Reagan, whose tenure as governor in the late 1960s and early 1970s often included pragmatic compromises, is now being viewed in a more favorable light by some consumer advocates. Under Reagan’s administration, significant consumer protection legislation was enacted, including early versions of laws that would later evolve into stronger consumer safeguards.
The shift in Newsom’s stance on consumer protection has led to a broader conversation about the future of consumer rights in California. Will the state continue down a path of deregulation and corporate-friendly policies, or will there be a renewed push to strengthen protections for consumers in the face of these setbacks? For now, California’s consumer protection landscape looks uncertain, and the coming months may reveal whether these legislative changes are part of a broader trend or merely temporary concessions.
In either case, the political legacy of Ronald Reagan may be undergoing a reassessment in the most unexpected of ways: as a defender of consumer rights. Meanwhile, Gavin Newsom, once seen as the torchbearer of progressive ideals, faces increasing scrutiny over his decisions, with many wondering if more significant corporate-friendly reforms lie ahead in 2025.
For consumers in California, the next legislative session will be critical, as the outcomes of these debates may determine the future of consumer protection in the state for years to come.
Joseph A. Kaufman is the founder of Joseph Kaufman and Associates.
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