New York Appellate Court Upholds Lemon Law Protections

New York Attorney General Eliot Spitzer hailed a recent decision by a state appellate court upholding his office’s interpretation of key provisions of the State New Car Lemon Law.

The Appellate Division, Third Department of State Supreme Court in Albany 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.

“The Lemon Law has proved to be one of the most effective consumer protection laws,” Spitzer said. “Today’s decision ensures that car owners will continue to enjoy important protections embodied in that law.”

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.

The appellate court upheld the decision of the late Albany Supreme Court Judge Joseph Cannizzaro, who had dismissed the manufacturers’ challenge to the new procedures in September 2004. The appellate court found “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.

Also, the appellate court reversed a lower court decision issued by retired Supreme Court Justice Louis Benza, who had ruled in favor of General Motors on the same issue.

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 2004, consumers prevailed in 65 percent of all new car cases and obtained cash awards or replacement vehicles for a total value of $11.9 million. Used car owners prevailed in 68 percent of cases and obtained cash awards totaling $ 1.1 million.

The Lemon Law policy implemented by the Attorney General’s office in 2003 and upheld by this week’s decision applied 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 can not 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.