Chrysler Walks Away From Lemon Laws

Robert Farago
by Robert Farago
chrysler walks away from lemon laws

When life gives you lemons, you make lemonade (or glazed strawberry lemon streusel muffins). When Chrysler gives you lemons, you’re SOL. Since April 30, Judge Arthur Gonzales has to approve payment on claims against Chrysler incurred before C11. That includes “lemon law” settlement checks to customers who bought defective Dodge, Chrysler or Jeep products. Not happening. “San Diego attorney Ellen Turnage represents a client who reached a settlement with Chrysler over a 2006 Dodge Magnum with a bad suspension. The car has been returned to Chrysler, but the automaker’s check bounced. ‘Now he’s got no car and no money, so he can’t go buy a new one,’ Turnage said of her client. ‘He’s stuck. We’re hanging on to a glimmer of hope that at some point this will all be resolved.'” As the LA Times reports, Turnage’s pessimism is well-justified. Instead of saying, sorry, we’ll expedite this, the new Chrysler is telling aggrieved customers to FO&D.

The company said it had no plans at this point to ask the bankruptcy judge to approve payments to settle lemon law complaints. “This is a complex process and there are a lot of issues being discussed,” said Chrysler spokesman Mike Palese. “This could be one of those issues that comes up in the course of the bankruptcy, but I can’t say that we have any plans to present it at this time.”

Chrysler advises customers with pending lemon law complaints to file a proof of claim form with the Bankruptcy Court and join the ranks of the automaker’s unsecured creditors.

“In that case, you’ll be lucky to get pennies on the dollar,” [Atlanta attorney Alex] Simanovsky said.

Can we see the details on that government-backed warranty now, please? [thanks to pixarwolf for the link]

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2 of 30 comments
  • Pch101 Pch101 on May 11, 2009
    My outrage is reserved for the public officials who are driving this process. A bankruptcy would have been filed, anyway. The difference is that the government may pay these claimants. Had the government not been involved, the odds of them ever seeing the money would be about 0%, because the secureds would be entitled to take 100% of the tiny cash pie that is available to pay the creditors in this case. You've gone at length about your belief in absolute priority as an absolute doctrine, so it's surprising that you didn't pound on that argument here. Perhaps that's because absolute priority was probably not really your first concern, and your position has a lot more to do with your angst over the alleged value of the VEBA's worthless stock, even though it seems likely that the VEBA would have creditor priority over a lemon law litigant. Your absolute priority must be to make sure that the union gets zero, regardless of whatever rights it may have as a creditor in this case.

  • Slumba Slumba on May 20, 2009

    This doesn't make a lot of sense. If the check bounces you can go to court and get treble damages; should be simple and fast.

  • RHD Any truth to the unconfirmed rumor that the new, larger model will be called the bZ6X? We could surmise that with a generous back seat it certainly should be!
  • Damon Thomas Adding to the POSITIVES... It's a pretty fun car to mod
  • GregLocock Two adjacent states in Australia have different attitudes to roadworthy inspections. In NSW they are annual. In Victoria they only occur at change of ownership. As you'd expect this leads to many people in Vic keeping their old car.So if the worrywarts are correct Victoria's roads would be full of beaten up cars and so have a high accident rate compared with NSW. Oh well, the stats don't agree.
  • Lorenzo In Massachusetts, they used to require an inspection every 6 months, checking your brake lights, turn signals, horn, and headlight alignment, for two bucks.Now I get an "inspection" every two years in California, and all they check is the smog. MAYBE they notice the tire tread, squeaky brakes, or steering when they drive it into the bay, but all they check is the smog equipment and tailpipe emissions.For all they would know, the headlights, horn, and turn signals might not work, and the car has a "speed wobble" at 45 mph. AFAIK, they don't even check EVs.
  • Not Tire shop mechanic tugging on my wheel after I complained of grinding noise didn’t catch that the ball joint was failing. Subsequently failed to prevent the catastrophic failure of the ball joint and separation of the steering knuckle from the car! I’ve never lived in a state that required annual inspection, but can’t say that having the requirement has any bearing on improving safety given my experience with mechanics…