Niedermeier v. FCA US LLC
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The Supreme Court of California, in a case involving a dispute over California's lemon law, ruled in favor of the plaintiff, Lisa Niedermeier. Niedermeier had purchased a new Jeep Wrangler from FCA US LLC, which was defective. Despite numerous attempts to repair the vehicle, the issues persisted. Niedermeier requested FCA buy back the vehicle, but FCA declined. Eventually, she traded in the defective vehicle for a new one, receiving a trade-in credit.
Niedermeier later sued FCA for breach of warranty under the Song-Beverly Consumer Warranty Act. A jury found in her favor and awarded her a significant sum. FCA appealed, arguing the award should be reduced by the trade-in amount. The Court of Appeal agreed with FCA, but the Supreme Court reversed this decision.
The Supreme Court held that in an action under the Song-Beverly Act, neither a trade-in credit nor sale proceeds reduce the statutory restitution remedy. The court reasoned that the Act's plain language does not permit such a reduction. Additionally, the court found that this interpretation is supported by the legislative history and consumer-protective purpose of the Act. The court further noted that allowing such a reduction would incentivize manufacturers to delay compliance with the Act.
The court concluded that the statutory restitution remedy should not be reduced by a trade-in credit or sale proceeds, at least in cases where a consumer is forced to trade in or sell a defective vehicle due to the manufacturer's failure to comply with the Act. Therefore, the court reversed the judgment of the Court of Appeal.
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