California tort reform supporters have been raising the alarm about a recent 52% spike in lawsuits involving the state’s “lemon law” – the Song-Beverly Consumer Warranty Act – leading to the filing of 22,655 such auto-defect lawsuits in 2023.
Both the Civil Justice Association of California (CJAC) and California Citizens Against Lawsuit Abuse (CALA) have highlighted the problem. The flood of such lawsuits is not the result of decreasing vehicle quality, according to a recent opinion article by CJAC President and CEO Kyla Christoffersen Powell, but attorneys exploiting the law for financial rewards.
The state’s lemon law was enacted in 1970 to protect the purchasers of new vehicles. It obligates car manufacturers to provide a new car or a refund if the consumer has attempted to resolve major defects or problems with the vehicle for a “reasonable” number of times.
“California Citizens Against Lawsuit Abuse is deeply concerned about the steep increase in lemon law lawsuits in our state,” California CALA’s executive director, Victor Gomez, told the Southern California Record in an email. “Lemon law abuse under the Song-Beverly Consumer Warranty Act has reached alarming levels.”
He said that paradoxically, the level of lemon law litigation is on the rise even though manufacturers have been succeeding in making their cars and trucks more dependable.
“This trend contradicts the industry's efforts to produce more reliable vehicles, making it clear that abuse of the law is a significant issue,” Gomez said. “Additionally, considering the ramp-up of advertising spending we have seen here in California by greed-driven trial attorneys highlighting our lemon law to attract more potential plaintiffs, we are unfortunately not surprised by this increase.”
In her opinion article, Powell said the situation is especially concerning in Los Angeles County, where lemon law litigation has shot up 1,400% in county branch courts from 2021 to 2023. And statistics from the law firm Bowman and Brooke shows that 2024 is on track to set a record for these types of lawsuits in California.
“The law has been exploited by plaintiffs' lawyers who have learned to manipulate its loopholes for their gain,” Gomez said. “These exploitative legal tactics provide an incentive for attorneys to pursue litigation even when a reasonable offer is made by manufacturers, unnecessarily prolonging the process for consumers and delaying a fair resolution.”
He added that a case that came before the state Supreme Court two years ago questioned whether used cars should also be designated “new vehicles” under the state lemon law.
“This case, Rodriguez v. FCA, has significant implications for consumers and manufacturers, as it could lead to inconsistencies and absurd outcomes in lemon law cases,” Gomez said.
Powell said potential solutions to the excess litigation over the lemon law include a pre-lawsuit notice system so that manufacturers would be informed of specific grievances prior to a lawsuit being filed and have the chance to resolve the issue before any court actions begin. Other ideas would be to allow attorneys to earn their fees based on outcomes that benefit consumers.
Last year, a group of only seven law firms accounted for 54% of all lemon law cases filed in the state in 2023, according to Powell.
The state legislature is now considering a bill, Assembly Bill 1755 by Assemblyman Ash Kalra (D-San Jose) and Sen. Tom Umberg (D-Santa Ana), to reform the lemon law. The measure has the support of both the Consumer Attorneys of California and California Defense Counsel as a way to reduce court congestion.
But other groups, including Consumers for Auto Reliability and Safety, have not endorsed the bill, saying that it would place additional legal burdens on consumers.
CJAC had raised more than $4 million for a potential ballot measure to reform the lemon law in 2026, but as part of an agreement on AB 1755, CJAC has pledged not to bring the measure to the ballot through 2026, provided that the Song-Beverly legislative reforms are approved and signed into law in 2024.
"Even though there is disagreement in the auto industry over whether these changes go far enough, CJAC is encouraged that its ballot effort created opportunity to negotiate reforms with CAOC," Powell said in an email to the Record.