GMSR secures split in authority before the California Supreme Court weighs in: Court of Appeal agrees with GMSR that manufacturers are not entitled to offsets for a car consumer’s resale of a “lemon”

The Song-Beverly Act requires car manufacturers to promptly buy back defective cars without the consumer having to sue.  Consumer advocates have long argued that manufacturers may not offset damages for amounts that plaintiffs are credited when they sell or trade in a defective car under the Act – the manufacturers must pay the consumer the full amount of statutory damages.

In Niedermeier v. FCA, the Court of Appeal rejected that argument, holding that manufacturers are entitled to an offset.  At GMSR’s urging, the California Supreme Court is currently reviewing the decision.

Ruling for a different GMSR client, the Court of Appeal in Figueroa v. FCA US, LLC diverged from Niedermeier, creating a split in authority.  Figueroa reasoned that the Song-Beverly Act set the exact damages GMSR’s client was entitled to without reference to a resale offset, and that any “windfall” that GMSR’s client might reap was the “direct result” of the manufacturer’s refusal to promptly buy back the car anyway.

Plus, Figueroa warned, providing manufacturers a resale offset would undercut the Song-Beverly Act’s statutory scheme by rewarding manufacturers who plainly consider their statutory obligation – to promptly repurchase, repair, label as a lemon, and sell the vehicle at a deep discount with a one-year warranty – a losing proposition, and who therefore “would much rather force the owner of a defective vehicle to sell it on the open market, or trade it in without a label or warning, and use the cash back on trade-value as an offset.”

Click here to read the Court of Appeal Opinion:  Figueroa v. FCA US, LLC (2022) 84 Cal.App.5th 708 [Second District, Division Six]

To learn more about Niedermeier and other civil cases pending before the Supreme Court, visit and bookmark GMSR’s regularly-updated California Supreme Court Watch: