California Supreme Court Addresses Lemon Law for Used Car Buyers in Landmark Ruling
In the recent landmark decision of Rodriguez v. FCA US, LLC, the California Supreme Court clarified an important aspect of the state’s Lemon Law, also known as the Song-Beverly Consumer Warranty Act. The ruling addressed whether Lemon Law protections apply to used vehicles that are still covered under the manufacturer’s original warranty. This decision significantly impacts used car buyers across California, setting a precedent for warranty protections under the Lemon Law. Read about the court’s decision below, and contact Nita Lemon Law Firm for help from an experienced and successful California lemon law attorney.
California’s Lemon Law
California’s Lemon Law protects consumers who purchase or lease new motor vehicles that turn out to have serious defects affecting the vehicle’s use, safety, or value. If the defect cannot be fixed after a reasonable number of attempts, the manufacturer can be required to replace the defective vehicle, refund the purchase price (buy back the vehicle), or compensate the owner/lessee for their losses.
For most of the lemon law’s history, it has been an open question whether Song-Beverly applies to used cars as well, when the vehicle is purchased while it is still covered under the manufacturer’s warranty. Ambiguous language in the law can be read in different ways, and different California courts have answered the question affirmatively or negatively in separate cases over the years. This discrepancy teed up the issue for the Supreme Court to resolve, which it finally did on October 31, 2024, in the case of Rodriguez v. FCA US, LLC.
Background of the Rodriguez Case
The case involved plaintiff Hector Rodriguez, who purchased a used 2012 Dodge Durango from a private party in 2018. At the time of purchase, the vehicle was still covered by FCA US, LLC’s (Fiat Chrysler Automobiles) original five-year/100,000-mile powertrain warranty. Shortly after purchasing the vehicle, Rodriguez experienced repeated mechanical problems, primarily related to the powertrain, and faced challenges with obtaining effective repairs through FCA.
Rodriguez filed a lawsuit against FCA under California’s Lemon Law, seeking a replacement or refund for the defective vehicle. FCA argued that the Lemon Law should not apply to Rodriguez’s used vehicle, contending that it was not “sold with a manufacturer’s warranty” in the same way a new car would be. The case ultimately reached the California Supreme Court, with the question centered on whether a used car under a transferable manufacturer’s warranty is covered by the Lemon Law.
The California Supreme Court’s Ruling
In a unanimous decision, the Supreme Court ruled that used vehicles are not “new motor vehicles” under the Lemon Law, regardless of whether the vehicle is still covered under the manufacturer’s “new car warranty.” While it may seem obvious that a “used car” is not a “new car,” the issue in this case is not that simple. As mentioned earlier, numerous courts have reached conflicting rulings on the matter, and the California Supreme Court itself held onto this case for more than two years before finally issuing its ruling last month.
The difficulty lies with language in the Tanner Consumer Protection Act, a portion of Song-Beverly that specifically applies to motor vehicles. It is the Tanner Consumer Protection Act that creates a rebuttable presumption that a vehicle is a lemon if it has not been fixed after a reasonable number of attempts during the first 18 months or 18,000 miles. Tanner presumes such a vehicle is a lemon after two or more unsuccessful attempts to repair a serious safety issue or after four or more attempts to fix another issue affecting the vehicle’s use, value, or safety. The presumption also applies if the vehicle is out of service for repairs for a total of 30 days, which do not have to be consecutive.
By its own terms, Tanner only applies to “new motor vehicles.” However, the law spends 184 words defining what a “new motor vehicle” is, which is where the confusion comes in. In particular, the law says that a “new motor vehicle” includes “a dealer-owned vehicle and a “demonstrator” or other motor vehicle sold with a manufacturer’s new car warranty…” (emphasis added) even though such vehicles would not otherwise technically be considered new.
Many used car purchasers have argued, and some courts have agreed, that the highlighted language above means that a used car is covered as a “new motor vehicle” when it is sold with a manufacturer’s new car warranty still in effect. If this interpretation were rejected, then what would the language even mean, and would it have any effect? It is a well-established rule of statutory construction that a legislature never acts in vain, and any language in a law must be given some effect. No provision in a statute can be rendered meaningless by a court. Courts can only invalidate language in a statute on specific grounds, such as that the provision is unconstitutional.
In the Rodriguez case, the Supreme Court of California spent most of its 22-page opinion deciding what the California legislature meant by “other motor vehicle sold with a manufacturer’s new car warranty.” The court connected this phrase with the preceding language in the statute referring to “dealer-owned vehicles” and “demonstrators” and ruled that “other motor vehicle” was meant to apply only to other types of vehicles that are basically new and more like a dealer-owned vehicle or demonstrator than a typical “used” or “pre-owned” car. The court was hard-pressed to come up with an example of what an “other motor vehicle” would be but eventually came up with the example of “a car owned by a manufacturer or distributor for marketing purposes.” In other words, the legislature included “other motor vehicle” as a “catchall” for vehicles similar to demonstrators or dealer-owned vehicles that aren’t specifically mentioned in the law.
The court also stated that demonstrators and dealer-owned vehicles are not warranted prior to sale; it is only the first customer who buys or leases a dealer-owned vehicle or demonstrator who receives the new car warranty. This is in contrast to a used car buyer who does not “receive” a new car warranty directly from the manufacturer but instead receives a car that a previous owner had received a warranty on. Of course, it is well established that new car warranties are transferred to a new owner, but for some reason this fact was not persuasive in the court’s interpretation of the California Lemon Law.
Bad News for Used Car Buyers
Needless to say, the court’s decision is not great news for used car buyers who wind up with a lemon. When shopping for a used car, it’s wise to have the vehicle inspected before buying, and whenever possible, it’s best to purchase a “certified pre-owned” vehicle. These cars typically come with factory warranties, including a limited powertrain warranty and a limited bumper-to-bumper warranty. These warranties extend factory coverage and can be useful if you experience problems with your used car. However, if your problems can’t be satisfactorily repaired under the warranty, you cannot look to the lemon law for help, unfortunately. The California Supreme Court firmly slammed that door shut in its October 31 ruling in Rodriguez v. FCA US, LLC.
Contact Nita Lemon Law Firm for Help With a California Lemon Law Claim
For new car buyers and lessees, the lemon law remains a powerful consumer protection tool for customers stuck with a lemon that can’t be satisfactorily fixed. If you find yourself in such a situation and need help getting your refund, replacement, or compensation from the dealer or manufacturer, contact Nita Lemon Law Firm for a free consultation. Call us at 213-232-5055 in Los Angeles or 877-921-5256 anywhere in California. You can also submit a free case evaluation request at www.nitalemonlaw.com, or email nick@nitalemonlaw.com for a fast response.
