Act Amending Wisconsin’s Lemon Law Goes into Effect

2013 Wisconsin Act 101, which amends Wisconsin’s lemon law, went into effect on March 1. Prior to Act 101, Wisconsin notoriously had one of the worst lemon laws in the country. The law placed unreasonable and unworkable requirements on vehicle manufacturers that allows lawyers like self-proclaimed “Lemon Law King,” Vince Megna, to win outsized awards that have no nexus to fairness or the underlying goals of the law.

For example, in Marquez v. Mercedes-Benz, the cost of the vehicle was roughly $56,000. Had the owner provided the manufacturer the necessary bank account information in a timely manner, the owner would have been given a check for the vehicle, plus other costs. However, the prior to Act 101 going into effect, the law created a substantial incentive for owners and their lawyers to impede resolution of a lemon law claim. By delaying the process one day beyond the 30-day statutory deadline, vehicle owners and their attorneys hit the jackpot, which in the Marquez case, was $700,000. (See Marquez v. Mercedes-Benz USA, LLC, 2012 WI 571.)

Act 101 makes a number of changes to Wisconsin’s lemon law, including:

  • Eliminating Mandatory Double Damages: Before Act 101, Wisconsin was the only state in the nation to require double damages linked to the purchase price of the vehicle without any evidence of bad faith in efforts to comply with the lemon law.
  • Adding Time for Delivery of a Comparable Vehicle: Prior to Act 101, Wisconsin law required a manufacturer to provide a comparable new vehicle within 30 days. Act 101 provides more reasonable time periods: 120 days for heavy-duty vehicles and 45 days for other vehicles.
  • Reducing the Statute of Limitation: Prior to Act 101, the statute of limitation to file a claim was six years. The bill has a more reasonable 36-month statute of limitations from time of delivery.
  • Providing a Refund Option if a Comparable Vehicle is Unavailable: Act 101, after a due diligence search, allows the manufacturer to provide a refund when no comparable new vehicle exists or is otherwise unavailable.
  • Adding a Good Faith Requirement: The bill allows a court to extend deadlines, reduce damages, attorney fees and costs, and provide other remedies if it finds a party has failed to reasonably cooperate with another party’s efforts to comply with the law.
  • Allowing Negotiated Settlements: As an alternative to a refund or comparable new vehicle, the bill allows for negotiated settlements for heavy-duty vehicles.
  • Clarifying Out of Service: The law still creates legal risks not found in other states by allowing certain days that the vehicle is in the possession of the consumer to be counted toward the 30-day out of service requirement. However, Act 101 improves this area of the law by requiring in those instances that the vehicle be unable to be used by the consumer for the vehicle’s intended purpose due to a nonconformity that substantially affects its use or safety. Also in those instances, the vehicle now must be subject to two repair attempts.
  • Providing Fair Notice on Nonconformities: Lacking needed information is a major impediment to compliance for manufacturers. Act 101 requires necessary information be provided on forms from the Department of Transportation. If the required information is not provided to the satisfaction of the manufacturer, upon their timely request for such information, the time periods to provide refunds or comparable new vehicles do not begin.

For more information about Act 101, click here

 

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