Key Provisions of the new California Lemon Law (AB1755)
Assembly Bill 1755 (AB 1755), enacted on September 29, 2024, introduces significant changes to California's Lemon Law, aiming to streamline the dispute resolution process between consumers and vehicle manufacturers. These provisions are set to take effect in two phases: January 1 and April 1, 2025. General Motors and their lobbyists are responsible for this change to the California Lemon Law, and, while consumer attorneys did their best to try to stop the passage of it, GM was able to push it through. Here is what’s going to happen with the new law:
Key Provisions of AB 1755:
Statute of Limitations: Consumers must file a lemon law lawsuit within one year after the expiration of the vehicle's express warranty. However, no lawsuit can be initiated more than six years after the vehicle's original delivery date, unless specific tolling provisions apply.
Pre-Suit Notice Requirement: Effective April 1, 2025, consumers seeking civil penalties must provide written notice to the manufacturer at least 30 days before filing a lawsuit. This notice should include the consumer's name, Vehicle Identification Number (VIN), a summary of the repair history and vehicle issues, and a request for repurchase or replacement.
Settlement Procedures: AB 1755 standardizes settlement procedures by introducing a Standardized SBA Release form, clarifying terms for vehicle replacement or restitution. Manufacturers are required to complete the restitution or replacement within 60 days of receiving the notice.
Initial Disclosure Requirements: To streamline the discovery process, all parties must provide initial disclosures, including repair orders, warranties, and pre-suit communications, within 60 days after filing an answer or responsive pleading.
Mandatory Mediation: Within 90 days after filing an answer or responsive pleading, parties are required to schedule mediation, which must occur within 150 days. Discovery processes are stayed, except for initial disclosures and depositions, until mediation is complete.
Deposition Guidelines: AB 1755 sets specific guidelines for depositions to ensure focused and efficient discovery. Within 120 days after filing an answer or responsive pleading, all parties are entitled to conduct initial depositions, each limited to two hours and covering specified topics such as vehicle history, repairs, and communications with the manufacturer.
Sanctions for Noncompliance: The bill imposes sanctions on parties who fail to comply with discovery requirements without good cause. Noncompliance can result in monetary penalties, dismissal of the case without prejudice, or evidentiary sanctions, depending on the party at fault.
Penalties for Delayed Restitution or Replacement: Manufacturers that fail to complete restitution or replacement within 30 days of receiving a signed release face daily penalties of $50 until the settlement is finalized, unless the delay is due to the consumer's lack of good faith compliance.
Implications for Consumers:
AB 1755, while a bad law, aims to expedite the lemon law process, ensuring timely resolutions for consumers dealing with defective vehicles. However, the new timelines and procedural requirements necessitate prompt and informed action. If you believe your vehicle qualifies under California's Lemon Law, it is crucial to consult with a knowledgeable attorney to navigate these changes effectively.
At Valero Law, we are committed to guiding you through these legal updates and ensuring your consumer rights are protected.