Product Liability: An Update from the PLC
California Lemon Law Reforms: What Manufacturers Need to Know About AB 1755
By Jasmine J. Owens
The Song-Beverly Consumer Warranty Act, commonly known as the “Lemon Law,” requires automotive manufacturers to repurchase or replace defective vehicles that cannot be repaired after a reasonable number of attempts. In recent years, the number of lemon law cases in California has surged—from about 15,000 in 2022 to over 22,000 in 2023—placing a strain on the court system and delaying case resolutions.
To address these issues, Assembly Bill 1755 (“AB 1755”), enacted on September 29, 2024, aims to streamline the lemon law process. Effective in two phases—beginning on January 1 and April 1, 2025—AB 1755 introduces new procedural guidelines, including the early exchange of discovery documents, expedited depositions, and mandatory mediation all within six months after the answer is filed. These reforms encourage early dispute resolution, reduce litigation costs, and ease the burden on the court system.
This article examines the key provisions of AB 1755, its impact on consumers and manufacturers, and the broader implications of these reforms.
Key Provisions of AB 1755
1. Statute of Limitations (Section 871.21)
AB 1755 establishes a new statute of limitations for lemon law cases. A lawsuit must be filed within one year after the expiration of the applicable express warranty. However, the lawsuit cannot be filed more than six years after the vehicle’s original delivery date, unless tolling provisions apply.
For example, if a vehicle is purchased on January 1, 2020, with a 5-year warranty that expires on January 1, 2025, the consumer must file a lawsuit by January 1, 2026 (one year after the warranty expires). Even if the defect is discovered later, the lawsuit cannot be filed after January 1, 2026, as the 6-year limitation would apply. However, the statute of limitations may be tolled for the time the vehicle is out of service for repairs or for up to 60 days after a pre-suit notice is provided.
2. Pre-Suit Notice Requirement (Section 871.24)
AB 1755 emphasizes pre-litigation resolution, allowing consumers and manufacturers to resolve disputes without court intervention. Effective April 1, 2025, the consumer must provide written notice to the manufacturer at least 30 days before filing a lawsuit seeking civil penalties. The notice must include: (1) the consumer’s name, the Vehicle Identification Number (“VIN”), a summary of the repair history, and vehicle issues; and (2) a request for repurchase or replacement.
After receiving the notice, the manufacturer has 30 days to comply with the request, or they will face civil penalties. If the manufacturer chooses to proceed with replacement or restitution, it must be completed within 60 days after receiving the original notice.
3. Settlement Procedures (Section 871.25)
AB 1755 standardizes settlement procedures, particularly the terms and conditions of releases in lemon law cases. It includes a Standardized SBA Release form, clarifying the terms for replacement or restitution, with strict compliance timelines (e.g., restitution or replacement must be completed within 60 days of receiving notice). This form simplifies settlement and ensures both parties understand their obligations and deadlines. As discussed further below, there are penalties for noncompliance with this provision.
4. Initial Disclosure (Section 871.26)
If the dispute does not settle after the pre-suit notice requirements, and the consumer proceeds with litigation, AB 1755 streamlines the discovery process by requiring early disclosure of key documents. Within 60 days after the filing of the answer or other responsive pleading, all parties must provide an initial disclosure and the documents specified in the statute—without awaiting a discovery request. Such documents include repair orders, warranties, and pre-suit communications, among others.
5. Mandatory Mediation (Section 871.26)
AB 1755 includes a mandatory mediation process to encourage early dispute resolution. Within 90 days after the filing of the answer or other responsive pleading, the parties must schedule mediation. Mediation must occur within 150 days. Discovery is stayed (except for initial disclosure and depositions) until mediation is complete. If mediation does not resolve the case, normal discovery resumes.
6. Depositions (Section 871.26)
AB 1755 sets guidelines for depositions, ensuring focused and efficient discovery. Within 120 days after the filing of the answer or other responsive pleading, all parties are entitled to conduct initial depositions of the plaintiff and defendant (or, if the defendant is not a natural person, the person most qualified to testify on their behalf). Each deposition is limited to two hours and the topics specified in the statute, including the vehicle history, repairs, and communications with the manufacturer.
7. Sanctions for Noncompliance with Discovery Requirements (Section 871.26)
The court will impose sanctions on represented parties who fail to comply with certain discovery requirements, unless the party shows good cause. For noncompliance with document production or deposition requirements, the court will impose a $1,500 sanction on the plaintiff’s attorney or a $2,500 sanction on the defendant’s attorney.
Repeated noncompliance by the plaintiff will result in dismissal of the case without prejudice, with the plaintiff’s attorney liable for the manufacturer’s costs. Repeated noncompliance by the defendant will lead to evidentiary sanctions, preventing the introduction of certain evidence at trial. These sanctions ensure timely compliance and expedite case resolution.
8. Penalties for Noncompliance with Restitution or Replacement Process (Section 871.26)
If the manufacturer fails to complete restitution or replacement within 30 days of receiving the signed release, daily penalties of $50 will apply until the settlement is finalized, unless the parties agree otherwise. If the consumer fails to comply in good faith and delays the restitution or replacement, the manufacturer will not incur the daily $50 penalty. These penalties incentivize manufacturers to resolve cases quickly.
Impact of AB 1755
For consumers, one of the main benefits of AB 1755 is the faster resolution of cases. The streamlined process ensures that consumers receive vehicle replacements or restitution more quickly. The pre-suit notice and mediation requirements increase the likelihood of resolving issues early, saving both time and legal costs.
For manufacturers, AB 1755 introduces new obligations, including strict timelines for responding to pre-suit notices and completing replacements or restitution. While the structured process and standardized forms make compliance more predictable, the law may create new challenges. For example, plaintiffs’ attorneys may use the new timelines to strategically flood manufacturers with multiple claims filed on the same day. By holding back numerous claims and submitting them all at once, plaintiffs can overwhelm legal departments, increasing the risk of missed deadlines or failure to comply with the timelines. This could lead to civil penalties or pressure manufacturers into settlements. As the reforms require quicker responses and faster resolutions, manufacturers must be more nimble in handling cases, dedicating additional resources to meet the new requirements and avoid costly mistakes.
Ultimately, while AB 1755 aims to streamline case resolution and reduce court congestion, it could open new avenues for plaintiffs to exert pressure on manufacturers. By understanding these potential tactics, manufacturers can better navigate the complexities of the new system and reduce the risk of penalties, delays, and unnecessary settlements.
Long-Term Effects of AB 1755
AB 1755 could reshape lemon law disputes in California. Its focus on early dispute resolution and streamlined discovery could reduce case volume, allowing courts to focus on more complex cases. Additionally, the law’s transparent process may foster proactive dispute resolution, benefiting both consumers and manufacturers.
If AB 1755 proves successful, its emphasis on early discovery exchanges, mandatory mediation, and clear timelines could set a national precedent for lemon law reforms in other states. This approach may influence the broader landscape of consumer protection laws across the country.
Conclusion
AB 1755 significantly reforms California’s Lemon Law, offering faster resolutions for consumers and reducing court congestion. While these changes benefit consumers, manufacturers face new challenges. As the law takes effect on January 1, 2025, manufacturers must be prepared to navigate these changes. Proactive compliance and understanding plaintiff strategies will be crucial to managing risks in this new legal landscape.
Jasmine J. Owens is an Associate at Bowman and Brooke LLP, a national boutique product liability law firm in Detroit, Michigan. She focuses her practice on product liability defense litigation and currently serves on a national discovery team for a major automotive manufacturer, handling complex matters related to consumer warranty and product liability cases.
Interested in joining the Product Liability Committee? Click here for more information.
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Young Lawyers: Raising the Bar
Dear Future Parents
By Pamela Haug
Parental leave is something that many young lawyers will navigate in their careers. Having a child is a joyous occasion, and there are many ways to experience this change both personally and professionally. I had a difficult professional experience with my first child which helped me navigate leave with my second child. Hopefully, this article outlining your rights and benefits will help if you plan to have children in the future.
Know Your Rights
The first thing to know if you plan to have children are your rights under the Family and Medical Leave Act (“FMLA”). In general, FMLA entitles an employee of a covered employer to take twelve workweeks of unpaid, job-protected leave for the birth of a child if she has worked for the employer for at least twelve months. Private employers who employ fifty or more employees, public agencies, and local educational agencies are covered by FMLA.
Before having a child, make sure you have been at your employer for at least twelve months so that FMLA applies. You need to be at your employer for at least three months before becoming pregnant, as this will meet the twelve-month threshold under FMLA. If you are at a private employer or firm, make sure it has at least fifty employees to be covered under FMLA. Confirming that FMLA applies is the first step in planning parental leave, as it ensures your job is protected when you take time off to have a child. Seeking out private benefits is the next hurdle.
Do Your Homework
Before accepting an offer of employment, find out whether you would have any employer-provided benefits. The best way to figure this out is to ask the human resources (“HR”) department. If you are unsure who the contact is, ask the hiring manager to connect you. The questions you ask HR should remain confidential, and you should not worry about that information being shared. It is important that you take this step before accepting an offer, even if it feels uncomfortable, so that you know whether this is the right employer for you.
Finding out whether a firm provides paid leave before you accept an offer will also determine whether the firm’s benefits align with your values. Finding out that a potential employer has zero paid leave tells you a lot about how they treat new parents and whether they value family life.
Another way to find out the benefits at a future employer is to ask the hiring manager for the firm’s benefits package. Many firms that provide paid parental leave are very upfront and proud of that benefit, so it usually is not too difficult to find. Firms that do not provide paid leave benefits can be the opposite. The hiring manager may dodge the question in the interview process or say that the firm follows FMLA, meaning they provide the minimum required by law and it is unpaid. Since some firms are not up front about parental leave benefits, this is another good reason to do your homework before accepting an offer.
It is important to do your own research before accepting an employment offer if paid leave is important to you. Ask HR questions. Ask the hiring manager for the firm’s benefits package. Make sure the potential employer’s benefits align with your values so that you do not end up working for a company that does not support working parents.
Know Your Benefits
Some young lawyers may decide to start a family when they are already gainfully employed. Determining your benefits at a current employer is like pre-offer research but with one difference: do it in writing. HR works for your firm and not for you. If there comes a time when your benefits are in dispute, having a paper trail is vital.
After my child’s birth, the company’s short-term disability provider disputed my eligibility for this benefit. I had emails between myself and HR that I forwarded to the insurer, which fast-tracked my short-term disability check. If I did not save that information, I am certain this process would have lagged on and my family would have been without that income for much longer.
Another way to determine a current employer’s parental leave benefits is to locate your firm’s benefits workbook or package. If your firm has an intranet or a shared drive where it saves important files, start your search there. Make sure the version you read is the most up-to-date version, as benefits can change from year-to-year.
Firms have different names for their parental leave benefits. Some that I have seen or used include familial bonding leave, parental leave, short-term disability, and maternity leave. A few key things to note when you are researching benefits is that many of these private benefits have eligibility requirements and elimination periods. An eligibility requirement may be that you must have worked for the employer for six months before using that benefit. An elimination period may be that you cannot invoke short-term disability until seven days following the birth of your child. This means you will go without pay during that period.
There are tons of nuances, and I recommend meeting with your HR contact in advance of having a child so that you can take advantage of every benefit. I had at least four meetings with HR before my first child. No question is a bad question, even if you feel that way. These are professionals, and they answer these types of questions every day. When you meet with HR, make sure to take notes and send an email summarizing your discussion for your records. This will be helpful if, like me, you need to answer questions 48-hours postpartum and without sleep for who knows how many days.
When you are already employed and start planning for a family, ask HR for your benefits information in writing. Locate and save your firm’s benefits package from its intranet or shared drive. Meet with HR to ask all your questions and summarize those in an email after the meeting. Take the extra steps before you are expecting a child so that you do not have to worry about it when you are sleep deprived, taking care of a newborn.
Seek Help
The best way to reenter the workforce following parental leave is with a solid support network. Find support from friends and family who have kids and ask for their advice as you navigate your career post-baby. I am lucky to have family and friends who had kids before me and gave me so much love and support during this period. I am not sure how I would have survived without them. Find and use your support network since these are the people who understand what you are going through day-to-day.
Mental health support is so helpful for new parents. I am a huge advocate of therapy and recommend it whenever possible. Therapy is so useful for new parents, as therapists can help you navigate this huge life change in a healthy manner. Scheduling and attending therapy sessions may be difficult in the first few months. Do it anyway. You can ask potential therapists about their cancellation policies and if they would be willing to waive any fee during your post-baby phase. Mental health is a huge part of any person’s overall health, but it is especially important when you become a parent.
Another place to you may need to seek help is from an attorney. A firm may have great benefits and FMLA may ensure your job is available upon your return; however, you may find that to be untrue, like I did. After my parental leave, I realized that a listing for my job was shared on LinkedIn. My employer attempted to fill my role while I was out on maternity leave. Unfortunately, this is common, and there are many ways that leave rights are violated or skirted. I suggest talking to an employment rights attorney. You may find that what happened is technically legal in your jurisdiction, but it is worth the time to find out. An attorney will be able to tell you what, if any, next steps should be taken.
Having a child and reentering the work force is difficult. Asking for help is also challenging but it is necessary. If you feel like your rights were violated in some way, consult an attorney. Seek out a support network of friends and family who can help and find mental health support when you need it. You may not feel like yourself for a while but having the support you need will make the journey much easier.
Conclusion
I am a mom with two children whose experience with parental leave has varied. There are so many resources out there to help you navigate this change. Understanding your rights under FMLA is key, as it is the main law providing new parents benefits. Do your homework before accepting a new job offer. Make sure there are leave benefits outside of FMLA. If paid leave is important to you, pass on a job offer at a company that does not provide it. HR can help with your questions, and it is good to have everything in writing.
When you return from leave, make sure you have a network of family and friends who can support you. If you feel your rights have been violated, consult an attorney. Mental health resources like therapists and meditation guides are useful. Your happiness and your new family are the most important things. Do whatever you can to protect them.
Pamela Haug is an Account Executive in Lexitas’ Legal Talent Outsourcing division. She focuses on the temporary and permanent placement of attorneys and paralegals in law firms and corporate legal departments. Pamela serves on the Board of Aldermen in the city of Ballwin, Missouri. As the sole female on the board, Pamela is an advocate for women. She is also a former member of the DRI Young Lawyers Steering Committee and the Young Lawyers Division of the Bar Association of Metropolitan St. Louis.
Interested in joining the Young Lawyers Committee? Click here for more information.
