California Supreme Court: GMSR’s consumer client is entitled to full statutory restitution under California’s lemon law—without offset

GMSR client Lisa Niedermeier gave the manufacturer of her defective Jeep Wrangler more than a dozen chances to fix the vehicle before asking the manufacturer to buy it back under California’s Lemon Law, the Song-Beverly Act.  The manufacturer refused her buy-back request, willfully violating the Lemon Law’s requirement that manufacturers promptly buy back defective vehicles.  This left the client virtually no other option but to trade in the Jeep for a credit on a new, safe vehicle, and to sue the manufacturer.

The client prevailed at trial and obtained damages, but the manufacturer claimed that it was entitled to a “restitution” offset against the client’s damages under Civil Code section 1793.2, subdivision (d)(2).  The manufacturer argued that it was entitled to a damages offset for the Jeep’s trade-in value, and that any consumer’s trade-in or resale value received for a defective vehicle should be credited in a manufacturer’s favor against a consumer’s Lemon Law damages.  The Court of Appeal agreed with the manufacturer, but the California Supreme Court reversed.

Agreeing with the reasoning in Figueroa v. FCA US, LLC (2022) 84 Cal.App.5th 708 and Williams v. FCA US LLC (2023) 88 Cal.App.5th 44—appellate court wins that GMSR secured while this case was pending—the Supreme Court held that section 1793.2 does not grant manufacturers a trade-in or resale offset when a manufacturer’s willful refusal to promptly buy back a defective vehicle is what forced the consumer to either trade in or resell the defective vehicle in the first place.  Any double recovery the consumer might receive as a result is irrelevant.

To read the California Supreme Court Opinion, click here:  Niedermeier v. FCA US LLC (2024) 15 Cal.5th 792.

In the news:

Atkins, Calif. Justices Rule Fiat Can’t Offset Lemon Law Restitution, Law360 (Mar. 4, 2024).

Recovery Under Lemon Law Not Reduced by Credit, Metropolitan News-Enterprise (Mar. 5, 2024).

Supreme Court Rules For Consumer In Lemon Law Case, Daily Journal (Mar. 5, 2024) (subscription required).