Assembly Standing Committee on Judiciary

Welcome, everyone, to the Assembly Judiciary Committee. I would like to note that the analysis for AB 1755 is available on the Committee's website at Ajud.Assembly.ca.Gov. Under the hearings agenda tab, the rules, witness testimony, or each side will have up to two witnesses.

Witnesses have two minutes to testify in support of our opposition to the Bill. Additional folks here will just state their name, organization, if any, and their position on the Bill at the appropriate time. We're gonna. We don't have a quorum.

We'll go ahead and start a Subcommitee because I know our joint author, Senator Umberg, does have to head back to his floor to commence with the work they're doing there. And so I will go ahead and hand the gavel over to our Vice Chair to begin the hearing.

Very good. Thank you. I'll wait for a moment till you get down to the chair and your primary witnesses. Two main witnesses, may come forward.

And then when Tom takes off, you guys can kind of shift over and give space for the opposition.

Mister Kalra, Assembly Member Kalra, please open up on your Bill, please. AB 1755.

Thank you so much, Madam Chair. Proud to present AB 1755 with my joint author, Chair Umberg. AB 1755 is a Bill to address the rapidly growing backlog of civil cases involving disputes over California's lemon laws. Since the end of the pandemic era, restrictions on court hearings, the number of lemon law related lawsuits filed in California has doubled.

In fact, judges report that in LA County, lemon law cases now represent 10% of all civil filings in the county. This year, it's expected there'll be as many as 30,000 cases in California, which is compared to about nine years ago. There were about 4000.

The corresponding increase in discovery disputes, protracted settlement negotiations, and disagreements regarding fees are significantly delaying many Californians ability to replace a defective car with a safe and reliable form of transportation. Not to mention all the other civil cases that are getting disrupted and delayed because of the clogging of the court system.

AB 1755 represents a compromise between the consumer attorneys, defense attorneys, and some auto manufacturers, most notably General Motors. The compromise has three primary components. First, the Bill adopts new pre litigation procedures designed to keep disputes from ever going to court. Consumers must now inform manufacturers in writing if they want a lemon.

That could be via email if they want a lemon vehicle bought back or replaced. Otherwise, they forego the ability to seek civil penalties. Manufacturers receiving this notice must agree to replace the vehicle within 30 days or else consumer may go to court.

Right now, there is no such timeline or deadline for the manufacturer to even respond to the consumer. If the party has reached an agreement, the manufacturer must complete the repurchase or replacement of the vehicle within 60 days.

So you're talking about the resolution for the consumer within 90 days of first making the request, which is a pretty fast timeline, which is great for the consumer. I should note this notice can be sent in any language spoken by the consumer and must be responded to by the manufacturer.

Second, in the event a lawsuit is filed, this Bill adopts streamlined early discovery and mediation. Parties must provide a mandatory set of documents and discovery within 60 days of the defendant responding to the lawsuit. The plaintiff and defendant must submit to a deposition within 120 days of the defendant's response.

Both parties must attend mediation within 150 days, and both sides must have a person capable of settling present at the mediation. The parties may seek extended discovery and litigation only if the early discovery and mediation fail. I want to clarify that amendments adopted last week clarify that any response from a defendant triggers a discovery timeline.

It's not just an answer, thus eliminating any chance for game playing by litigants. The Bill also enhances certainty in litigation timelines and settlements. The Bill narrows the timeline for filing lemon law cases to one year after the final warranty expires, or six years total from delivery of a vehicle. This is still more generous than other states.

47 states limit their lemon law remedies to the year or two after a car's purchase, or 18,000 to 24,000 miles. The other two remaining states go up to the time of the warranty, so this is still more generous in terms of the timelines allowed to file a case.

Finally, the Bill expedites settlement completion by providing one standard statutory form for repurchase replacement agreements, thus eliminating the need for negotiations requiring a settlement to be completed in a timely manner, or else both sides face possible civil penalties and sanctions, and requiring the manufacturer to provide the consumer a check or a new vehicle at the time the lemon is turned in.

These consumer friendly changes seek to promote timely resolution of cases outside the court when possible. Lastly, let me briefly address some concerns that have been raised by the opposition and note what the Bill does not do. This Bill does not alter any fundamental rights under the existing lemon laws.

Much like today, manufacturers are obligated to conform vehicles to their warranty. Similarly, this Bill does not cancel any warranty if a warranty issue arises at any time during a warranty's existence. The existing law related to warranty contracts still applies, and the statute of limitations in this Bill impact warrants, warranty claims or does not impact warranty claims.

This Bill does not shift any burdens on plaintiffs. It merely codifies existing practices and the on the ground realities related to notifying manufacturers about a car being a lemon, and only applies these to actions seeking civil penalties. This Bill does not alter a manufacturer's affirmative duty to replace lemons.

Once a vehicle hits the requisite number of repairs, it should be replaced or repurchased, and damages can begin occurring at that time. This Bill is not a handout to plaintiffs attorneys and does not delay litigation or permit nefarious litigation tactics. Rather, this Bill streamlines discovery.

In fact, this Bill authorizes significant new sanctions imposed on mass lemon law filers who abuse the discovery rules provided in the Bill. This Bill does not grant new attorneys fees, given that the attorney client privilege attaches before a lawsuit is filed. Fees for pre litigation activities are typically covered under existing law. This Bill does not change that.

This Bill does not authorize bulk settlements. Much like existing law, this Bill deals with one plaintiff and one defendant at a time, and in no way authorizes new class actions or the grouping of distinct claims from distinct parties. Finally, this Bill does not harm non-english consumers.

Notices can be sent to manufacturers in any language and in accordance with existing law, translators must be provided to non English speaking litigants. In fact, this Bill strengthens access because currently, under Song Beverly, there is no requirements for sending notices in any of the languages.

This Bill expressly requires information regarding a person's warranty rights and contact information for seeking redress for a lemon to be provided in English as well as Spanish. So this is actually strengthening the language access under lemon laws. And this Bill.

This Bill simply seeks to provide a process for the expeditious resolution of lemon law claims by incentivizing all parties to reach early and amicable outcomes. I'd like to offer joint author chair Umberg the opportunity to say a few words, and then I'll introduce the witnesses in support, if that's okay with the chair.

Sure. Before we do that, why don't we take rolls, since I believe we now have a quorum.

[Roll Call]

Please proceed, Senator.

Thank you, Madam Chair. Song Beverly Act was passed nearly 50 years ago. And by the way, one of my colleagues in the Senate asked how I voted on the original Song Beverly Act. I actually wasn't here then, but it's worked quite well. It's protected consumers for quite a long time. But.

And this Bill does nothing to the substantive provisions of Song Beverly but it does change the process, and it does provide consumers greater access to remedies if their vehicle, the vehicle they purchased has defects that need to be either remedied or the car needs to be returned and the purchaser be placed in a position where they are made whole. Chair Kalra really did a complete sort of exposition of the Bill. So thank you very much.

Just to underline one point that you had made, it's that under current law, when someone has a vehicle that they believe needs to have sort of lemon law treatment, they have to go online or wait for their mail or watch TV to figure out how it is that they avail themselves of any protections of lemon law.

This Bill, for the first time, requires manufacturers to provide access to information, provide access so that they can make a claim, if you will. It has to be in writing, which is the same as true in 49 other states. And with that, unfortunately, I'm not going to be able to stick around for the opposition.

But I'd like you to assume that my response to the opposition was compelling, and with that, unfortunately going to have to depart. But thank you, Chair and Members, I urge an aye vote.

All right, thank you, Senator. And you have some witnesses. Two witnesses.

Thank you so much, Madam Chair. Here to testify and support are Nancy Drabble on behalf of the Consumer Attorneys of California, and Mike Belote on behalf of General Motors.

Thank you. I'm Nancy Drabble with Consumer Attorneys of California. We are very happy to be in favor of this Bill today. It addresses urgent procedural problems with how lemon law cases are handled in the State of California, while keeping our lemon law the strongest in the nation.

Recently, we heard from one of our Members who was at a court call in LA that 34 of the 40 matters on calendar for that date were lemon law discovery disputes. That just doesn't make sense and that needs to be changed. These are not complicated cases.

So while this Bill would fix procedure, it also provides new first in the nation consumer protections. I'd like to quickly run through the seven new consumer protections that this Bill would have, and we would be the only state in the nation that has those.

First, as chair cholera mentioned, consumers who want to seek civil penalties would only need to send in the VIN number and a brief description of problems. And then once that occurs, it gives the car company a chance to respond. Every other state requires notice by mail or certified mail.

We would be the only state who provided the choice of email. Second, the Bill would require the manufacturer to actually respond within 30 days. And decide whether they're willing to make an offer. There is no deadline in current law. Again, we would be better than any other state in the nation.

Third, it would require the notice to be both in English and Spanish. Again, we would be the first to have that. And so that is a new consumer protection. Fourth, after they make a valid offer, they would have to complete the deal within another 30 days. So that's 60 days from start to finish right now.

The consumer can wait for months. They may not get an answer, they may be ghosted, and they're just attempting to get the, the car bought back and nothing happens. Fifth, if the car is bought back, they have to give the check to the consumer on that day. 6th, there is a standard legal release that's new. And 7th, if they don't take the car back, there's an automatic $50 day penalty. All of these are new consumer protections that are provided by the Bill.

Madam Chairman and Members Mike Belote, on behalf of General Motors, Assemblyman Kalra and the other witnesses have covered everything but the Bill is necessary. We've had a seven fold increase in these claims in nine years.

The Bill is procedural, doesn't change a word of Song Beverly, but it addresses the pain points in the litigation process, and the big ones are discovery. It is unnecessary to have dozens of discovery motions and hearings in court on a Song Beverly Lemon law claim, so we should have much faster resolution.

I think you will see an increase in buybacks of vehicles within that 60 day period, which will not even have a lawsuit filed. Second, it addresses the early process with a short deposition, a mandatory mediation, and a clear exchange of documents. Another pain point is arguing about releases and offsets and damages.

This provides clarity in that Assemblyman cholera spent a lot of time talking about what the Bill doesn't do. But there are other things it doesn't do.

It doesn't affect implied warranties, it doesn't affect consumer legal Remedies act claims, it doesn't affect products liability claims, and it doesn't affect unfair business practice claims under Section 1700 of the B&P code. This takes a narrow, targeted approach at the pain points in the litigation process. These are automobile claims, not complicated cases.

We want happy customers, and we'd like to resolve it early in the action so that people can get in the cars they need to take their self to work and their kids to school. We think this is a huge improvement in the law, and with that we would ask for your aye vote.

And we'd like to thank the consumer attorneys because their negotiation has been in good faith. They have done exactly what they said they would do and we think we have a good product. Thank you.

Very good. Thank you. So if we have potential speakers in support of AB 1755, please line up and state your name, your organization and your position. Thank you.

Good afternoon, Madam Chair Member Shant Apekian. On behalf of Ford Motor Company and strong support.

Madam Chair Assembly Members Cliff Costa, today. On behalf of the California Judges Association and the California Defense Counsel, the civil defense lawyers in strong support. Thank you.

Good afternoon, Madam Chair and Members Annalee Augustine, on behalf of the RV Industry Association in support. Thank you.

Madam Chair Members Cory Salzillo, on behalf. Of Stellantis, the company formerly known as Chrysler, in support. Thank you.

Any other witnesses in support? All right, seeing none, let's hear from the main witnesses in opposition, if you'd like to come to the table. And just a reminder, two minutes each witness. Thank you. Whoever wants to go first.

All right, thank you. Good afternoon. My name is Kerry Fowler and I'm senior managing counsel at American Honda Motor Company. American Honda is extremely proud to be headquartered here in the great State of California. It has been our home since our inception in 1959.

Our company is committed to the thousands of associates we employ in the state, our network of over 1000 dealers and equipment retailers and their roughly 16,000 employees. And of course, we are committed to the many California consumers who purchase and drive our vehicles. Because of our deep ties to the state. Honda is likewise committed to ensuring that laws affecting both our customers and our company are fair and promote good public policy.

If it is for that reason that I come before you today on behalf of Honda and 16 other automakers, the vast majority of the automotive industry, to respectfully but unequivocally oppose Assembly Bill 1755, there can be no doubt that updating the Song Beverly Act is crucial to ensuring fair dispute resolution, safeguarding consumers, and promoting public safety.

We also recognize that the California court system has long experienced delays, backlogs and cases due to systemic abuses of the state's lemon law. These are very serious problems, and our coalition is committed to working towards real reform. Unfortunately, so far we have not been given that opportunity.

The broad coalition of automakers, consumer groups, consumer attorneys and other stakeholders I'm representing here were all purposefully excluded from the drafting of this Bill. We shared a litany of concerns with the proponents that we believe exasperate, not alleviate, many of the current problems. But those concerns have been ignored.

While I'm happy to answer questions about specific concerns we have with the Proposition, I forget I cannot possibly, with the time given, explain all of them. They are explained in detail in our coalition letter to the Committee.

When the Bill passed the Senate Judiciary Committee earlier this week, the Committee was unanimous in its assessment that the legislation was rushed, flawed, and in serious need of work. Our coalition strongly believes the flaws in the Bill are so pervasive they can't and shouldn't be addressed through cleanup next year.

Instead, I urge you to reject this proposal and allow the interested parties to engage in meaningful thought, thoughtful and inclusive dialogue to come up with a solution next session that truly addresses these issues. Thank you very much.

Thank you very much. Next witness, please.

Chair Karla, Vice Chair Dixon and Members, I'm Rosemary Shahan, President of Consumers for Auto Reliability and Safety, or C.A.R.S. I'm testifying behalf today on behalf of C.A.R.S, and I've also been designated as the point of contact for a large coalition of about a dozen consumer groups around the country who want to preserve California's protections for consumers under our lemon law.

Since 1979, CARS has successfully spearheaded enactment of numerous laws to protect California lemon owners, including expanding the law to cover businesses and military personnel. And we and our coalition partners opposed this Bill because it would unfortunately drastically weakened protections for California's new and car buyers compared to the protections they've had for 54 years.

Briefly here, just four of the ways this Bill would weaken California's recipe for automotive lemonade. Since 1970, when Governor Reagan signed the Song Beverly Consumer Warranty act, it would for the first time deny full Lemon law protections for vehicle owners who have warranties that last beyond six years years.

It would also limit the time for a bringing lemon lawsuit to just one year after the warranty expires, harming consumers whose vehicles have latent defects. It would reduce the amount that lemon owners with negative equity would receive as a refund by an average of about $6,000.

And worst of all, it would make it harder for most people who never even talk to an attorney to get their vehicles fixed under their warranty. Right now, all they have to do is take the car to the dealer.

The manufacturer has a primitive obligation to see what's going on with the car and be proactive and get in touch with the dealer and sometimes the consumer and say, hey, this car is starting to turn yellow and sprout leaves. Maybe it's time for us to send in a troubleshooter.

And companies like Toyota invested millions in a distribution center in Southern California to speed things up. We challenge GM and Ford to do the same instead of trying to weaken our lemon law. Don't rush your products to market before they're ready. ... consumers who have problems and.

Thank you very much.

I'd be happy to answer questions.

All right. If you have witnesses out in the audience, please come forward. State your name and organization.

Good afternoon. Lizzie Cootsona here on behalf of Tesla in respectful opposition. Thank you.

Thank you, Madam Chair and Members. Alice Kessler on behalf of Kia. For the reasons stated by the other witnesses, we are also in respectful opposition.

Madam Chair. Kirk Kimmelshue for Scout Motors, in opposition.

Madam Chair. Steve Cruz on behalf of Strategic Legal Practices, we appreciate the recent amendments and the important clarification in today's analysis. They were critical for us, and we look forward to working with you as we further this discussion. Thank you.

Good afternoon, Mister - Madam Chair and Members. Meegan Murray with the Weideman Group, on behalf of Lucid. In opposition. Thank you.

Good afternoon. Allison Shue on behalf of Toyota Motor North America, in opposition. Thank you.

Good afternoon. Matt Klopfenstein on behalf of Volkswagen Group of America, in opposition. Thank you.

Good afternoon, Madam Chair and Members. Dominic Di Mare here on behalf of BMW, also in opposition.

All right. Let's bring. Thank you very much. Let's bring it back up to the dais, to the Committee. And who would like to ask a question? Yes, Assemblymember.

Thank you, Madam Vice Chair. So I want to start with the process because I find it incredibly problematic that, as I understand it from everyone who was involved, negotiations were happening for months. I've heard up to four months, perhaps. There wasn't a single person who represents the people of California who knew about this and was a part of those conversations for months.

And we, our obligation is to center the people we represent every day and the consumers. And so what happened was these negotiations happened between the special interests. They dropped this in our lap, and they expect us to buy an argument related to the urgency that feels, to be honest, not real. And we're supposed to move this in a week's time. If this were not moved in a week's time, the Committee I Chair, Consumer Protection, would have a hearing on this.

We would center consumers, we would decide if consumers were benefiting from that. That's not happening because of the timeline of this Bill, which, frankly, given the fact this has been going on for four months, was unnecessary. This could have been introduced four months ago, prior to the gut-and-amend deadline. It would have gotten full hearings in the Senate and hearings again in the Assembly. And I find that to just be so problematic that we would allow the special interest to do such a thing to eliminate us from the process, to eliminate consumers from the process and pass a Bill like this.

And so I can't get past that. Earlier in the week, I suggested perhaps we put a sunset on the Bill so that we would be forced to evaluate those questions. That didn't happen. And so I can't support it today because the people I represent, I don't feel got the just analysis. They deserve the process they deserve for this piece of legislation. And I think we need to send the message to the special interests that you cannot take the people who represent the people of California out of the process. So that's number one.

Number two, I think we need to start talking about these things it's doing, because any good compromise, as we all know, balances the interests, right. I think we expect it to, you know, help everybody. That's what means, that's what a compromise is. And so in the effort to get consumers resolution faster, they might give up some things, which is what is being done here.

So I'm not against the fundamental principle of looking at those consumer protections and analyzing whether the balance is right. We don't have time for that. So I don't know that we can make that decision today. And some of the consumer impacts, negative consumer impacts, are real. I think the statute of limitations change. It is always significant. And we know this because we've been extending the statute of limitations in a lot of context in order to give people their rights.

And I understand the point that was made by the proponents that this is not affecting the law itself. The fundamental Song-Beverly law. But what we as attorneys and as the Judicial Committee know is that the civil procedure that allows access to justice is sometimes just as important as the underlying law that someone is seeking to vindicate their rights under. And so I think we can't minimize the changes that are happening here.

And I think the statute of limitations is one of them. I also think the notice requirement needs more vetting. I think that. I understand that right now it's confusing. I like the idea that people are given notice of how to do that. But if they don't do it right under this law, they lose rights in court, they lose the ability to those extra damages. Is that trade off appropriate? Are we doing that right? There are just a lot of questions I have that I don't think I am gonna be able to get answers to in the time we have.

I will say I agree very deeply with the Chair of Senate judiciary and the Chair here that the changes to civil procedure as it relates to the timelines for discovery are great. I actually love that. As someone who practiced in federal court, I got no issue with that. But there's a lot more in here than that. The release now you have to have, which nobody has talked about but is, I think incredibly significant. The Bill includes a standardized release now for all claims, which is not true prior to this Bill.

It is a very broad release of claims that I think can hurt consumers who exercise their rights under this in potential ways. The statute of repose change, I think, is significant as someone who had a car that had to be taken back, as did the Chair, because our battery became explosive. So, I mean, real things happen. And in that case, the car manufacturer did right by the people who had that car. And that's what we want.

And I actually wanna also highlight, which I haven't mentioned yet, I did do Lemon Law cases as a defense attorney. So I've been in this world, and there are, the courts are jammed, and there are bad actors who are bringing too many cases, and we need to do something. But this law is something Californians rely on, and we need to do it right. So I don't, I just cannot do this today. But it's not as if this conversation should not continue and this should not happen. I think it should. But should it happen in a thoughtful way and the courts are overwhelmed, there's no question.

But I also find it fascinating that the folks who are in opposition are the ones who are doing right by consumers right now, the ones who have less cases. We're seeing less evidence that those manufacturers are harming consumers, and yet they're the ones who think this is problematic. I think that should not go without being said. And so I appreciate what our Chair, the author, is trying to do here.

I appreciate the attempt to make the Lemon Law not clog our courts, to make it work for consumers to make sure when you make this big purchase, which for some is second only to their home, if they can buy one, that gets them to their job, that gets their kids to daycare and school. That if you make this major, major investment and it goes south, that you have a way to vindicate your rights.

And that those that are seeking access to justice and are being delayed. I mean, since I've practiced law, years have been added to the time that any case gets before a judge because of this and other reasons. And so the goals here are absolutely admirable. I would invite sort of continued negotiations on this, but I just can't participate in this process.

Any other? Committee Member. Yes, Assemblymember Pacheco.

Thank you very much. So we've been very busy this week, and I also don't appreciate this gut-and-amend process, especially when it comes to such an important issue. I've listened to both sides multiple times, multiple Zoom meetings. I've been trying to get as much information as possible given the short period of time, but it's really difficult given that it hasn't gone through the process, that we haven't had more conversations. And I also feel like it's also a disservice to those automakers that weren't part of the conversations. Like why were they left out?

Were they invited? Maybe they opted not to join in the conversations. But it's important to have everybody at the table to make sure that it goes through the right process and everybody's input is taken into account. And I feel bad because it almost feels like it's industry versus industry, and it just puts us in a really tough situation. And I would love to see more conversations happen.

I would love to see a more perfected Bill. I want to make sure that consumers are protected as well. I mean, that's the main thing. Those are our constituents. And so that is what we really should be caring about. And I don't know if consumers are really protected. I never practiced Lemon Law cases, so those are multiple concerns that I've had. So unfortunately, I can't support this Bill either.

Mister Kalra, would you like to comment on any?

Well, I mean, look, I respect both my colleagues tremendously. I know that they do care deeply about consumers, as I think, I hope all of us do. And I will say that, look, the Bill as it's written would be implemented in April. I've had, I believe, constructive conversations with at least a couple of manufacturers, with VW and Toyota, and I've made commitments to them and would make it to all other manufacturers. I'll make it to all the other consumer groups that have concerns that I'll continue conversations on specific issues of concern.

I think some of what I heard during that meeting, I think there are some issues that can be resolved soon enough and quickly enough to be implemented when we get to April. But I think, I hope that's just a sign that as rushed of a process, as it can seem, that this is not the end of this. I made that commitment to the Senate Committee, Judiciary's Committee as well. I heard them loud and clear. I hear all of you loud and clear.

Whether you told me publicly or privately that we need to continue to work on this, I will continue to work on this and have extended the opportunity to work on this during the interim with some of the manufacturers as well, and offer that as well to consumer groups that continue to have concerns so that we can continue to make this better.

The reality is that, as Senator Umberg mentioned, this law has been on the books for a very long time. I think it's having some unintended consequences in terms of clogging the courts and delayed compensation to consumers. I know that there are some lawyers that like the current process. They're making a lot of money off of it. And the ones holding the bag are some of the manufacturers and certainly a lot of the consumers. And that's why I'm putting this forward.

I think to get some immediate relief to consumers, get immediate relief to the courts. The Judges Association support it because they also see this as something that's going to help to unclog some of the issues in the courts. I think we can get some of that immediate relief and not stop working on this and not stop working with other concerns that folks might have. And I make that commitment to all of you today.

Very good. Thank you. Assemblymember Reyes.

All right, personal microphone. My personal microphone. I'll start singing in a moment. I appreciate the fact that, that the author has shared that, his commitment here and in the Senate. He'll continue to work on this. But I think that what's important to recognize is that an issue like this doesn't come out of thin air. The consumers are complaining about this. And if the consumers are complaining about something, we have to try to find solutions and we talk about protecting our consumers.

I guarantee you our consumers are not protected by this protracted litigation, which is exactly where we are right now. When I saw the numbers that in just nine years, where did I see that? We went from 4300 cases to 30,000 cases in just nine years. So how are consumers protected by that? We have to do something. I appreciate, I appreciate that this is something that we have some of the manufacturers opposed, but some manufacturers in favor.

So it isn't as though every manufacturer is opposed to it. And some of them came to see me and share with me that they are in favor of this. They think that this is something that is good. I also want to mention that although we may think that there is no consumer, no person who was involved in this, the Assemblymember represents half a million consumers. And his work has been clear that he has been working to protect the consumers. And I think that the voice of the consumers were part of that negotiation. So with that I would move the Bill.

I think we have motion by Mister Bryan. Did you want to speak also, Assemblymember? Mister Haney?

So I bought a lemon this year. My fiance really, really wanted this car and we weren't sure what to do when we ran into problems pretty quick, and she's an attorney herself, trademarks and copyrights, but we weren't sure what to do. The process can sometimes be confusing, and we were able to get the help we needed to figure out how to navigate it. But there are a number of issues in this process. It's very complex. I'm really glad you're not touching the implied warranty, which was the issue in our case. I also don't like the last minuteness of this.

I think just as a house, we have voiced that frustration probably loud enough for the rest of the state to hear. But I think if there is a person who could jump into this issue with trust, it is the Chair of this Committee. And so when he says he's going to talk with the manufacturers, including Toyota, who don't feel like they've been at the table yet, that he's going to talk with the consumer groups, Rise Economy and others who feel like they haven't been at the table yet, I trust that. So I want to thank the author for kind of building a body of work that builds on that trust because that's what you need to really take on the complex issues.

All right. Thank you. Assemblymember Haney.

Thank you. I want to echo some of the comments from my colleague in Los Angeles. I was a little bit busy, as we all were this week, and having to also educate ourselves when we didn't have the time, and there was a lot of folks who asked to meet, and we were on the floor this entire week. So I think I would agree that there's a lot more time that we would have liked to have given to this. I definitely have huge respect, not only, of course, for the author, but for the folks who came together and their expertise and all of the people who are living this every day.

I do understand that there are folks who are not at the table, many of whom are huge employers in our state, huge producers in our state, our stakeholders that need to be heard. And so I also would underscore the need to work with them as well as work with everyone who is a part of this process and including the consumer groups who have also expressed concerns. I do not own a car. I'm probably the only, maybe the only Member of the Legislature who does not own a car.

So I have not purchased a lemon myself. But I do understand that it's a very complex process, but it's a very important consumer protection. I did want to ask you, and I don't know if this has been addressed yet. I know that in the Senate there was some conversation about the potential of a sunset. I was briefly outside the room, so I don't know if that did come up, but I wonder if you could talk about that. I think that there are some things that are coming down the pipe in the next few years and including a pretty dramatic shift, we hope, towards EV's and other types of technology.

And I don't know if this is the laws that we have here are perfectly aligned towards where we're going on all of this. So I wonder if you could speak to the, to your view on this question of a sunset and also some of the technological changes, rapid shifting that we're seeing and how what we're going to be putting forward today interacts with that.

I appreciate that question. And, yes, there was actually a really, it was an hour and a half Senate Judiciary Committee meeting, and I think a good portion of it, there was a conversation mostly amongst the kind of Senate Committee Members themselves, about a sunset. And I made it very clear that I'm fine either way, because if they put an amendment for sunset, okay, but they opted against it. And some of them. Let me try to paraphrase some of the arguments why, particularly the Chair.

Chair Umberg did not like the idea of a sunset. He indicated that, as opposed, this is not like some pilot programmer doing. We're actually changing civil procedure. And putting a sunset on a change of civil procedure could lend itself to the gaming of the system, waiting until the sunsets. And he didn't like the idea of doing that, and I think he still holds to that now.

Senator Durazo brought up the point of, like, you know, sometimes having a sunset. If it's a five year sunset, people don't start getting to work until four years. In this case, being the Senate Judiciary Committee's case with, as was correctly mentioned. There is a sense from a lot of the Members that, no, we need to start working on this sooner than that in terms of dealing with some of the issues of some of the manufacturers .... And so putting a sunset doesn't necessarily lend itself to getting to work sooner rather than later. That's kind of a paraphrase of some of the reasons why they opted not to put a sunset in the Senate Judiciary Committee.

All right, any other questions?

Just on the second part of the question, on the EV's and the sort of changes in technology. And, I mean.

Yeah. Like anything else where there's changes in technology, what have you. I mean, that's what we're here for I think, you know, a lot of the Senators that are there are going to be there after I'm gone. A lot of the Members here will be here after I'm gone. So it's not just about me and Senator Umberg or Chair Umberg. It's about all of us keeping track of what the changes are in technology, what the changes are in consumer habits and buying habits. I think as Assemblymember Reyes indicated we're seeing right now, the current status quo is disadvantaging a lot of consumers.

So we'd make this change now, and if there are some things that happen down the road that indicate otherwise, we can make those changes, particularly as it applies to electric vehicles and what have you, and we can make those changes accordingly. So there's nothing, there was a sense that there was nothing that prevented the Senate or Senators from taking quick action when it's necessary, regardless whether there's a sunset or not.

All right, thank you. Assemblymember Pacheco, please.

Thank you. So I think it would have been a lot easier for a lot of us to actually support this Bill if it had a sunset. And I guess I get the argument as to why not to have a sunset, but if we would have had a sunset, it would have at least forced everybody to have conversations, and then we could have also received information on how it would have protected the consumers, seen whether it did protect consumers, and it would have been a sunset. And if we needed to extend it, we wouldn't have to wait till the very end. We could have even had legislation to eliminate it, but at least we would have been able to have more conversations instead of rushing through it, especially end of session.

And Assemblymember Pacheco. That was part of the conversation, and they ultimately landed differently.

Mister Connolly. And then come back to you.

Yeah, appreciate it in the conversation. So wanted to just tee up a couple issues and appreciate hearing from both sides on this. So we're hearing a lot about just the fact that this is perceived as being last minute. It is a well known, ongoing issue that courts are clogged with these cases that's been going on for years and years. So one thing I would invite you to do is more directly, just address why now.

Why are we now just getting this through a gut-and-amend situation as opposed to earlier in the year, if not before? Secondly, so appreciate the fact that no rights under Song-Beverly are affected here. So we're talking about procedural. A big component of it is pre litigation. So it sounds like the theory is if we kind of set some parameters around dispute resolution, limited discovery, timeline. The idea would be to avoid having to go to court.

On the other hand, we're hearing from opponents that hold on, this is actually going to increase the likelihood of disputes and potentially even litigation more so, whether it's over discovery or the like. So also talk about, on balance, how this protocol will actually achieve its intended result and cut down on unneeded litigation and streamline the process. So first, directly address why now, and secondly, lay the foundation for how this will actually achieve the result.

Sure. And I'll start with the second part only, because in the first part, I may kick it over to colleagues here as well. But in regards to pre litigation, I do believe strongly that it's going to resolve a lot more of these matters without going to court. There's a reason why some of the more nefarious Lemon Law firms are opposing this, because to some extent, it kind of goes after their cash cow, which is the ability to extend these cases beyond for months and months or even years. When I met, at least with a couple of the manufacturers, this concern was expressed.

I don't believe their concern is unfounded. I don't think reality is going to show. I think that if your customer service to the point where you're taking care of these cases so quickly, I don't think the natural instinct is for individuals to go seek a lawyer if they get their issue resolved in a timely manner. I think that's part of the reason why some of the more than fair Lemon Law firms oppose this, is because there's not enough money to be made in this way this is being set up now.

There's not enough money to be made even to be worth it to have a client to go after these cases, because things have to happen so quickly. And so I totally respect and understand the concerns of some of the manufacturers that this could lead to earlier litigation, where right now they're not having litigation.

But if the customer service that those companies are providing right now are resolving these matters in the rapid pace that they're currently resolving them, I believe that nothing's going to change. I think that they will continue to resolve these matters expeditiously. Consumers will be happy, because really, it's about when consumers aren't happy.

Then they see those billboards, Lemon Law billboards, and say, you know what, I want to call up one of those numbers because I haven't gotten a response back in 45 days, in two months, and I'm stuck with this car. And I think that this will reduce the likelihood of that happening. Without impacting the current practices of the good actors on the manufacturer side in terms of quick response, right, or practices that, that lead to a quick response.

And so that's why I think. That's why I think the Judges Association other. Well, also the Judges Association love pre litigation because it doesn't end up in the courtroom. So I get that as well, in terms of unclogging. But I do believe that it will resolve a lot of matters in the first 30 to 60 days that right now are otherwise not being resolved. And the why now - look, I understand the concerns of some of the manufacturers that weren't at the table.

There was a major one that was there with the consumer attorneys that were, in months and months of negotiation, they came to an agreement. When they came to an agreement and came to us with that agreement, obviously, like, you know, there was an urgency to try to do it before the end of session. But that being said, I'll see if there's any elaboration there from the parties that were at the table.

I would just elaborate that it really is looking at the explosion of cases, particularly in Southern California. But now we're seeing it moving to Northern California, too, that in 2022, there were 15,000 cases. If you go back a few more years, it was only 4300. So it went from 15,000, then jumped in another year to 22,000, and now it's on track for 30,000. And so from our perspective, we are trying to address this unjustified number of filings by having a real clear pre litigation process that can work.

And second, if it does go to litigation, that they're going to have to go through the mandatory exchange of documents, the early mediation, so those cases can be resolved in five months, rather than for two or three years, which is really not fair to the consumers. So we do have some of our Lemon Law lawyers, some of them against this for the reasons that Assemblymember Kalra identified. But we are attempting to proactively work on this, and it is a crisis. And the numbers have just gone up. And that's why it's important to do it this year.

And if I might again, through the Chair, Mike Belote, on behalf of General Motors, I've been on this subject for 25 years. I have had convening of manufacturers. I have listened to manufacturers. Many of them would like to go into Song-Beverly itself and redefine what a Lemon is. That was put on the table in very vigorous discussions and rejected. That would be a fundamental change to the Lemon Law that I don't think would be acceptable to the majority of this body or the Senate.

What we did was spend a lot of time on the procedural aspects, but it's not like this is new as somebody said. I've been on it a long time, and a lot of the manufacturers have participated and had a lot of input about what they wanted, but we decided to limit this to the process, to the litigation process. And so I would say, of course, we will address refinements of the Bill, and we'd be delighted to. But we understand that we're not going to go into the heart of Song-Beverly, and try to redefine what a Lemon is.

Respectfully, I'd like to clarify, as one of the auto manufacturers, who he's speaking for. I am not aware that we were pushing for a redefinition of what a Lemon is, but there were negotiations going on that GM was a part of where we were working on ways to fix the problem, which we're all agreeing here is the clogging of the courts, the abuse that's going on with Song-Beverly.

There's no question that that needs to be addressed. We're not saying that that should be put on the back burner and not be a priority, but the kind of urgency that's been addressed here. There's nothing in this. In 1755 that a court couldn't do today, through a case management order put in place. We're going to require initial disclosures. We're going to put you on deadlines. Here's how we're going to do this. What we would like to do is have the opportunity to put for a real change that will benefit both the consumers and all the OEMs, not just one OEM.

That's a put forward their proposal and shut out everyone else. And so I don't think there's the kind of urgency we would like more time to just go back to the table and get everyone heard so that we don't have. With slightly more than 24 hours left in the session, everyone fighting over whether this is actually okay.

All right. Thank you very much. And speaking of the session, we have to get back to the floor. I'll give you 30 seconds, please.

Okay. So, we're worried about the consumers who never go to an attorney. Right now, mostly times when the manufacturer's reputable and they comply with their law, they get their car fixed. They never even have to file a Lemon lawsuit. They're going to lose a lot of clout under this Bill. With a lot of focus on litigation. There's a bigger universe of people that.

All right, thank you very much. All right. Any other Members want to say?

Yeah, I just want to reiterate one thing I said earlier, which is we keep saying we're not changing the rights under Song-Beverly, that's not true. When you change a statute of limitations and give people less time to bring a case, that is a right. So we are. I just want to make sure we all understand what we're doing. Secondly, if this has been a problem that has been going on for years, there's no excuse for the one week time you guys have said over and over and again for, you were doing this for four months.

Nobody, including the author, was at the table during those months. I still think there's no excuse for that. Lastly, I wanted to clarify that, as for the EV's, electric batteries tend to have the longest warranties available. 10 years. The change to the statute of repose will make it so you cannot exercise your rights as it relates to electric batteries for as long. And that is a significant change to law as it relates to EV's.

All right, thank you. Miss Pacheco, did you want to. Oh, no. All right, Mister Maienschein. No. All right. Chair. Would you like to wrap up, please?

Thank you. Thank you. Madam Chair, I just want to clarify again, this has not changed warranty law at all. And I will just say in terms of negotiations, look, I was also the author of the PAGA reform Bill. I wasn't at the table there. Those are months long negotiations as well.

Sometimes there are groups outside the building that come together and come to an agreement that come to us, and we have an up or down vote as whether we believe the resolution that's good for Californians. I believe in this case, this is good for Californians and would urge an aye vote thank you.

Well, thank you. And before we call the roll, I just want to say, since I had to sit in this position, I couldn't really talk as much as sometimes I do. But I do appreciate, even though this is a hurried process, I think we all agree that it could have been deeper, wider. However, this is not the end of the line, as I understand from you, this is the beginning.

At least let's resolve this important problem that clogging the courts and consumers are left unaddressed. Assemblymember Kalra, you will continue to monitor this process. You'll continue to take ownership of the problem and work with the manufacturers and the consumer groups. And let's call the role, please. Thank you.

Motion is ... concurrence. [Roll Call].

Due passed. Thank you very much. Oh, I do the gavel.