Assembly Standing Committee on Judiciary

All right, Good morning, everyone, and welcome to the Assembly Judiciary Committee. And I want to thank Assembly Member Ahrens for subbing in this morning at our unusually set time hearing. To hear.

Getting used to it.

Yeah, maybe I should say to hear a single Bill. And as is ordinarily the case, our witness testimony allows for each side to have to two witnesses. And each witness can speak for approximately two minutes. And everyone else, just please state your name, organization, if any, and position on the Bill. And we'll go ahead and begin. Senator Umberg, whenever you're ready.

Thank you, Mr. Chair. Thank you.

Excuse me. One. Just for the record, we don't have a quorum yet, so we're beginning as a Subcommitee.

All right, thank you, Mr. Chair, and thank you for your help on this. This has been a. A project you and I have been working on for some time now. This is a follow on to the Kalra Umberg bill of AB 1755. Special thanks to Nick Lightkeith for your work on this as well.

So originally, the original sort of modification of Lemon Law, AB 1755 was introduced to address an issue that was exploding in courts, and that was the number of lemon law cases that were being filed. Los Angeles Superior Court was up to in fact exceeding 10% of all filings were lemon law filings.

And so there came to be a compromise between certain manufacturers in the United States and others and consumer advocates to address some of the lemon law challenges. The original Bill was designed to both expedite consumers seeking redress as well as providers various notices. Cleanup was a consequence of various hearings on AB 1755.

There were some manufacturers that preferred the old law, and there were some advocates that preferred the old law. And so this actually provides an opportunity for those manufacturers that prefer the old law to opt out of the new law. I know that sounds unusual, but. But that was an accommodation.

And there were other advocates that also preferred the old law. And so thus we provide an opportunity to opt out. Now, what the Bill does, and the whole scenario does, is it expedites discovery by requiring those of you who are lawyers by requiring that each side produce documents and witnesses and other information early on in the process.

And so here we are today. Witnesses that are present here with us, Saveena Takhar from the Consumer Attorneys of California and Nicolina Hernandez from Toyota. I would ask that they present themselves.

Thank you, Mr. Chair. I'll move the Bill.

We don't have a quorum yet, so we'll get to that whenever we get that. Okay, sounds good. I appreciate the enthusiasm. So early in the morning, very early morning enthusiasm. We like that.

Well, I can have some myself now. Thank you.

Good morning, Mr. Chair and Members. Saveena Takhar with the Consumer Attorneys of California here in support. We were a co sponsor of last year's AB 1755. We align ourselves with the comments of the chair.

Thank the Committee, thank the Assembly for their work on the amendments that are in the analysis regarding the BMP jurisdiction amendments and we urge your aye vote. Thank you.

Good morning, Chair, Members. My name is Nicolina Hernandez, Regional Director of State Government affairs for Toyota here in support of SB26 and urge its switch. Toyota was part of a coalition that were left out of the negotiation process last year and had some concerns with AB 1755.

We definitely appreciate the commitment by Senator Umberg and the Governor's office to continue addressing the challenges that we find in the California Song Beverly act and putting Forward this Bill.

SB 26, as was mentioned, establishes an opt in process for AB 1755, giving automakers the necessary option to balance what is right for the approaches based on our customer service operations. Automakers have to proactively opt in by notifying the arbitration Certification program within the Department of Consumer affairs and this decision would apply for five years.

While all automakers are seeking to comply with the current statute, Toyota and others are weighing the near term and long term implications of remaining in AB 1755. So we once again want to thank the author and all of the work done by stakeholders on this commitment by supporting this Bill.

So to conclude, it's very straightforward Bill, very simple and represents the deal that was reached last year. Thank you for your time.

Thank you. Is there anyone else here in support of SB26?

You're. You're on time enough, so. Right.

Mr. Chair and Members. Cliff Costa today on behalf of General Motors and strong support. Thank you.

Good morning. Andrea Deveau on behalf of Rivian in support.

Thank you.

Good morning. Melissa Werner here on behalf of Honda in support. Thank you.

Thank you.

Good morning. Beverly Yu on behalf of Hyundai in support. Thank you.

Thank you.

Sarah Brennan on behalf of Lucid in support.

Thank you.

Good morning. Lizzie Kutzona here on behalf of Tesla in support. Thank you.

Thank you.

Good morning. Magaly Zagal on behalf of Kia and support.

Morning. Chair. Members. Matt Klopfenstein on behalf of Volkswagen Group and support. Thank you.

Good morning. Amy Lilly on behalf of Mercedes in support.

Thank you. Is there anyone here in opposition to SB26?

Good morning, Mr. Chair and Members. I'm Rosemary Shahan, President of Consumers for Auto Reliability and safety. And we're here. And I guess it best characterizes soft support because we definitely want auto manufacturers to be able to opt out of the provisions in SB 1755.

And as you know from last year, we were part of a large coalition of consumer and auto safety groups who opposed SB 1755. So we would love to see every auto manufacturer opt out. I don't expect that to happen.

We're in kind of a strange situation where we don't know at this point how many manufacturers are going to opt in, how many are going to opt out. So we're having to take a position with a lot of unknowns.

But we appreciate the amendments that were taken in the Senate and we just want to get it on the record.

We still remain concerned about the takeaways in AB 1755, the Shorter statute of limitations, the Shorter statute of repose, allowing auto manufacturer to deduct for negative equity, which is going to stick a lot of especially low income consumers with unsafe lemons if they can't afford to pay the amount of negative equity up front to get their car repurchased.

We also want to raise the issue that we don't accept the concept that there's excessive lemon litigation. There are abuses we would love to address, but this goes beyond that. There were about 7 million new cars sold in California from 1918 to 2021 or 2018-2021.

I was thinking that number's probably a little higher.

And there were only about 35,000 lemon lawsuits. That's not the number of defective cars. Right. During that period, auto manufacturers recalled millions of cars with serious safety defects. So the amount of lemon litigation is not really proportionate to the amount of defective cars that are out there. So just please keep that in mind.

You know, going forward there a lot of defective cars, especially as they get more complicated, we're seeing more and more complaints about software issues that are often complicated for the manufacturers to remedy and very serious for the consumers. Thank you.

Thank you very much. Is there anyone else here in opposition? And we do have quorums. Why don't we go ahead and establish quorum and then we'll start with the conversation.

[Roll Call]

All right, we have a quorum. Any. I'll Reserve my motion. Okay, so we have a motion. Is there a second? And there's a motion and a second. Any questions or comments? Okay, well, I will want to thank Everyone, I. I certainly want to extend it. Thank you again to Ms. Shahan.

I know how much you've worked on this for so many decades, really, and your work has been critical.

And certainly I think part of the motivation has been I know a lot of the law firms that might specialize this weren't very happy with the outcome with 1755, because a big part of the outcome is to try to expedite and clear out some of these cases that are being stuck in the courts for months or maybe even longer.

And so the expedited process we're hoping will help to get money in people's pockets more quickly. And it's in a process that requires the manufacturers to act more quickly. But we count on you and others to keep an eye on that and let us know what the outcome is going to be.

But I can definitely understand why you would have concerns about any changes that are made and are happy that some manufacturers. We'll stick with the old system.

And also to your point, also mentioned in the analysis with automated vehicles, I think there is going to have to be at some point a General revisit on the new technology and vehicles and how we handle issues that might arise out of that. Some we may not even foresee at this moment.

That being said, I do want to thank the Senator and my staff, Nick, and my staff on the Judiciary Committee and the sponsors, as well as those that perform the opposition that were able to come to an uncompromised position, and of course, the governor's office that told everyone to get back to the table and try to find some path forward.

And so I'm hoping that this will at least allow for an opportunity for us to see in these next few years if the litigation goes down. But the consumers are still able to file these claims and get justice when they do have vehicles that aren't up to par, so to speak. Would you like to close?

Senator Umbrig, just briefly, what you said, Mr. Chair. Ed. I suppose I can't help myself. But also, Mishan, thank you for your advocacy. And I know you've been holding manufacturers accountable for many years, and I look forward to continuing to work with you. This was a complicated issue, and so thus we've come up with a complicated compromise. But so be it. I urge an aye vote.

Thank you very much, Madam Secretary. If you take a roll call vote, motions do pass.

[Roll Call]

All right, that Bill is out and we'll hold the. We'll open for a moment and see if any other Members are making their way over here.

Immediate transmission, right?

Yes.

I mean immediate.

Why don't you take it up on the floor. We're taking up on Friday. Senator Umberg, we anticipate taking this up on Friday. And so at that point, if it passes, then we can go ahead and go with the immediate referral.

Thank you. Thanks. Thank you, everybody. Thank you.

[Roll Call]

All right. Thank you, Senator. Bryan. We are adjourned.