State's Highest Court Upholds Lemon Law Protections

Attorney General Spitzer hailed today’s decision by the State Court of Appeals upholding important consumer protections in the New Car Lemon Law.

New York State’s highest court rejected a challenge by automobile manufacturers DaimlerChrysler, General Motors and Saturn to a change in Lemon Law policy implemented by Spitzer's office in 2003. The new policy allows arbitrators to rule in favor of the consumer if the consumer proves that a defect in a vehicle was not repaired after four attempts. Prior to this change, consumers were required to prove that the condition continued to exist at the time of the arbitration hearing.

Spitzer's decision to modify the Lemon Law program was based upon court rulings in New York and in other states with comparable Lemon Laws.

Today’s decision upheld lower court decisions dismissing the manufacturers’ challenge to the new procedures.

"Today’s decision by the state’s highest court is a victory for consumers in their efforts to exercise their rights under the state’s Lemon Law," Spitzer said. "The court affirmed that consumers should not be forced to continue to operate a malfunctioning and possibly dangerous vehicle in order to preserve their rights in a Lemon Law hearing."

A lower court ruling had found that "the average consumer, who is typically obligated to make monthly car payments and rely on the car for employment, should not be forced to continue to drive a defective new vehicle until the date of adjudication simply to preserve his or her rights under the New Car Lemon Law."

According to Spitzer, given the widespread and well-documented frustration experienced by purchasers of defective cars, a primary purpose of this important consumer protection law was to define a "lemon" and to provide an effective and timely remedy for consumers.

Since the New Car Lemon Law Arbitration Program started in 1987, consumers have obtained over $200 million in relief. When settlements are included, consumers whose applications were

accepted for arbitration have prevailed in 67 percent of new car cases and 63 percent of used car cases.

In 2005, consumers prevailed in 62 percent of all new car cases and obtained cash awards or replacement vehicles for a total value of $10.7 million. Used car owners prevailed in 61 percent of cases and obtained cash awards totaling $ 830,000.

The Lemon Law policy implemented by the Attorney General’s office in 2003 and upheld by today’s decision applies in arbitrations concerning used cars as well.

The Lemon Law provides a legal remedy for consumers who buy or lease new and used cars that turn out to be "lemons"-- cars that don't conform to the terms of the statutory warranty and cannot be repaired by the manufacturer (in the case of a new car) or auto dealer (in the case of a used car) after a reasonable number of attempts.

Information about the New Car Lemon Law and the Used Car Lemon Law are available on the Attorney General's website at www.ag.ny.gov.

Individuals considering filing an application for a Lemon Law hearing can obtain instructions here or by calling the Attorney General's consumer help line at (800) 771-7755.

The case was handled by Assistant Attorneys General Jane Azia, Matthew Barbaro, Stephen Mindell and Herbert Israel of the Consumer Frauds and Protection Bureau under the supervision of Thomas Conway, Chief of the Consumer Frauds and Protection Bureau and Michelle Aronowitz, Deputy Solicitor General.

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