Will Governor Newsom VETO attack on California’s auto lemon law?

Auto manufacturers attack California’s landmark auto lemon law
Pro-consumer / auto safety organizations urge Gov. Newsom to veto SB 71

Auto manufacturers who produce seriously defective vehicles are backing legislation on Governor Gavin Newsom’s desk that would drastically weaken the ability of hapless victims of lemon automobiles to use California’s auto lemon law to get a refund. If Governor Newsom signs the bill (SB 71) into law, millions of California vehicle owners would face a much higher risk of being stuck with lemon autos that are unreliable and often unsafe to drive.

In a letter sent to legislators in Sacramento, the Alliance for Automotive Innovation — the trade association for dozens of international auto manufacturers — argues for passage of SB 71, authored by Senator Tom Umberg (D-Santa Ana), the powerful Chair of the California State Senate Committee on the Judiciary.

SB 71 would take away the ability of consumers who purchase faulty lemon cars for less than $35,000 to access “unlimited civil” courts, where they can easily get legal representation — usually at no cost to them — and may be awarded up to double their damages as a civil penalty, if they win and prove that the manufacturer’s refusal to promptly comply with the lemon law was “willful.”

Instead, consumers whose vehicles cost less than $35,000 would be forced to submit their cases to “limited civil” courts where they would face a number of procedural hurdles that usually make it impossible for them to win. For example, they are unlikely to be able to get enough discovery to prove their case. This means that scofflaw auto manufacturers who produce problem-riddled lemon cars priced below $35,000 would be able to get away with foisting them off on California car buyers and refusing to honor their warranties and fix them. Thus, auto giants would save potentially tens of millions of dollars in auto repair costs they would otherwise have to spend to fix problem cars under warranty.

If Governor Newsom signs SB 71 into law, he would be the first California governor to weaken protections for California’s car buyers under California’s landmark auto lemon law, widely regarded as the best in the nation. In the past, governors of both major political parties, democrats and republicans alike, have signed bills to improve and expand protections against defective lemon cars, starting with Governor Ronald Reagan, who signed California’s Song-Beverly Consumer Warranty Act — the original “lemon law” — in 1970.

The timing couldn’t be worse, since consumer surveys show increasing dissatisfaction and complaints about major defects in new vehicles, which are prone to myriad problems caused by faulty electronics and software programming.

According to J.D. Power’s annual survey of initial quality among motor vehicles:
“In the IQS, J.D. Power ranks automakers based on verified-owner responses, calculating for each a problems-per-100-vehicles (PP100) score. Looking at recent study results, the number of problems increased by 18 PP100 between 2021 and 2022 and climbed a massive 30 PP100 from 2022 to 2023. That’s nearly 50 PP100 combined in just two years. Automakers are seeing more persistent problems with their new technologies.“ — New Tech Drives Major Increase in Vehicle Quality Issues, JD Power report June 22, 2023.

According to the official analyses of SB 71, the only supporters are debt collectors and auto manufacturers and suppliers.

CARS and other non-profit organizations who give consumers a voice in the legislative process are fighting back. We’re urging Governor Newsom to veto SB 71. Here’s our letter to Governor Newsom. The more Californians the Governor and his staff hear from, the better.