EVERARDO RODRIGUEZ et al., Plaintiffs and Appellants, v. FCA US, LLC, Defendant and Respondent.
S274625
IN THE SUPREME COURT OF CALIFORNIA
October 31, 2024
Fourth Appellate District, Division Two E073766; Riverside County Superior Court RIC1807727
Justice Liu authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Kruger, Groban, Jenkins, and Evans concurred.
RODRIGUEZ v. FCA US, LLC
S274625
Opinion of the Court by Liu, J.
The Song-Beverly Consumer Warranty Act provides buyers of new motor vehicles with specific remedies when a vehicle turns out to be defective. (
We conclude that a motor vehicle purchased with an unexpired manufacturer‘s new car warranty does not qualify as a “motor vehicle sold with a manufacturer‘s new car warranty” under
I.
In 2013, plaintiffs bought a 2011 Dodge Ram 2500 from Pacific Auto Center, a used car dealer in Fontana. At the time of sale, the vehicle was about two years old with 55,444 miles. The three-year/36,000-mile bumper-to-bumper warranty on the truck had expired, but the five-year/100,000-mile powertrain warranty issued by the vehicle‘s manufacturer, FCA, remained in effect. The powertrain warranty covered the vehicle‘s powertrain (engine, transmission, and drive system), diesel engine, emissions, and washer bottle, and it also provided a corrosion warranty.
While the powertrain warranty was still in effect, plaintiffs repeatedly experienced engine problems. In March 2014, plaintiffs took the vehicle to an authorized FCA facility for repair, but the engine issues persisted. They took the vehicle for repair five additional times: in June 2014, in January 2015, twice in April 2015, and in May 2015.
In April 2018, plaintiffs sued FCA for (among other things) violating the Song-Beverly Act‘s refund-or-replace provision. They alleged that they had afforded FCA a reasonable number of attempts to repair the vehicle and that because FCA failed to repair it to conform to the applicable warranty, they were entitled to restitution of the purchase price or a replacement vehicle. FCA moved for summary judgment on the ground that the refund-or-replace remedy applies only to a “new motor vehicle” (
The Court of Appeal affirmed, holding that the phrase “other motor vehicle sold with a manufacturer‘s new car warranty” in
We granted review.
II.
The meaning of the phrase “other motor vehicle sold with a manufacturer‘s new car warranty” in
A.
The full definition of “new motor vehicle” reads: “‘New motor vehicle’ means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. ‘New motor vehicle’ also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state. ‘New motor vehicle’ includes the chassis, chassis cab, and that portion of a motor home devoted to its propulsion, but does not include any portion designed, used, or maintained primarily for human habitation, a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer‘s new car warranty but does not include a motorcycle or a motor vehicle which is not registered under the Vehicle Code because it is to be operated or used exclusively off the highways. A demonstrator is a vehicle assigned by a dealer for the purpose of demonstrating qualities and characteristics common to vehicles of the same or similar model and type.” (
This text makes clear that certain used cars—“a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer‘s new car warranty“—qualify as “new motor vehicles” for purposes of the statute. (
Plaintiffs take issue with the Court of Appeal‘s assertion that dealer-owned vehicles and demonstrators “come with full express warranties.” (Rodriguez, supra, 77 Cal.App.5th at p. 220.) They say those vehicles “don‘t necessarily come with a full manufacturer‘s new-car warranty” and instead “usually come with only a balance remaining” on the warranty after being driven “sometimes for thousands of miles.” “Because dealer-owned vehicles and demonstrators are sold with only a balance of a new-car warranty remaining,” they contend, “the Act‘s use of dealer-owned vehicles and demonstrators as examples of a vehicle ‘sold with a [manufacturer‘s] new car warranty’ confirms that any other vehicle sold with a balance of the original manufacturer warranty has been sold, for the Act‘s purposes, ‘with a [manufacturer‘s new car] warranty,’ too.”
In response, FCA says dealer-owned vehicles and demonstrators are sold with warranties that are “typically coextensive with full warranties issued to new cars that were not demonstrators.”
But we need not resolve whether such vehicles are or are not typically sold with “full” new car warranties. The key point, as FCA further explains, is that “demonstrators are not warranted prior to sale. In every case, the first customer to purchase or lease a demonstrator or dealer-owned vehicle receives a new warranty arising in that transaction, directly from the manufacturer . . . .” In other words, a warranty in this context is a guarantee made by the manufacturer to a retail buyer. Before a sale transaction, there is no such warranty to speak of; the manufacturer or its dealer representative owns the car. The sale of a dealer-owned vehicle or demonstrator to a retail buyer is what gives rise to a new car warranty. “Thus,” as FCA says, “whether the manufacturer ‘reinstates’ the original warranty period, ‘extends’ the warranty‘s mileage, or simply sells the vehicle with a warranty arising in that first retail transaction, demonstrators—unlike preowned cars—are always sold to the first retail buyer ‘with a manufacturer‘s new car warranty.‘”
Even if plaintiffs were correct that dealer-owned vehicles and demonstrators are typically vehicles with a balance remaining on a new car warranty, it is unclear why the Legislature would have singled out those cars, “which comprise a specific and narrow class of vehicles” (Rodriguez, supra, 77 Cal.App.5th at p. 220), as examples of the general category of used cars with unexpired warranties. Because dealer-owned vehicles and demonstrators are but a small fraction of the universe of used cars with unexpired new car warranties, it seems unlikely that the mere fact of having been sold with an unexpired warranty is the salient feature that the Legislature had in mind.
Like the Court of Appeal, we think that if the Legislature had intended to define “‘new motor vehicle’ to include a potentially vast category of used cars” with unexpired new car warranties, “it would have been done so more clearly and explicitly than tucking it into a reference to demonstrators and dealer-owned vehicles.” (Rodriguez, supra, 77 Cal.App.5th at p. 221; see People v. Strong (2022) 13 Cal.5th 698, 715 [no-elephants-in-mouseholes canon], citing Whitman v. American Trucking Assns., Inc. (2001) 531 U.S. 457, 468; Ontario Community Foundations, Inc. v. State Bd. of Equalization (1984) 35 Cal.3d 811, 822 [“Such a statutory construction has the tail wagging the dog“].) Indeed, although demonstrators and dealer-owned vehicles are not truly “new,” the statutory definition of “new motor vehicle” makes an exception for them along with “other motor vehicle[s] sold with a manufacturer‘s new car warranty” (
By specifically mentioning dealer-owned vehicles and demonstrators, the Legislature highlighted vehicles for which a manufacturer‘s new car warranty arises upon sale to a retail buyer. Thus, the phrase “other motor vehicle sold with a manufacturer‘s new car warranty” is most naturally understood to mean other vehicles for which such a warranty is issued with the sale. (
B.
This interpretation is bolstered by the overall framework of the Song-Beverly Act, which distinguishes between new and used products and calibrates manufacturers’ and sellers’ obligations accordingly.
Enacted in 1970, “[t]he Song-Beverly Act is a remedial statute designed to protect consumers who have purchased products covered by an express warranty.” (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 798.) Under the Act, a manufacturer that sells “consumer goods” with an express warranty must maintain nearby repair facilities “to carry out the terms of those warranties.” (
The Act also requires consumer goods to be accompanied by the manufacturer‘s and retail seller‘s implied warranty of merchantability (
Separate from these provisions concerning new products, the Act includes a distinct section addressing used products.
Thus, the basic framework of the Song-Beverly Act distinguishes between new and used products and “provides similar remedies in the context of the sale of used goods, except that the manufacturer is generally off the hook.” (Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 339 (Kiluk).) The Legislature added the motor vehicle provisions to the Act in 1982 and defined “new motor vehicle” to include any “new motor vehicle which is used or bought for use primarily for personal, family, or household purposes,” but not “motorcycles, motorhomes, or off-road vehicles.” (Stats. 1982, ch. 388, § 1, p. 1723.) In 1987, the Legislature established a refund-or-replace remedy specific to new motor vehicles with detailed requirements (Stats. 1987, ch. 1280, § 2, pp. 4557–4559; see
The Legislature has not otherwise adjusted the distinction between new and used cars in any manner that impacts our assessment of the question presented. In 1988, the Legislature amended the “new motor vehicle” definition to extend lemon law coverage to portions of a motorhome “devoted to its propulsion.” (Stats. 1988, ch. 697, § 1, p. 2319; see Sen. Com. on Judiciary, Analysis of Assem. Bill No. 4513 (1987-1988 Reg. Sess.) as amended April 20, 1988, p. 2.) In 1998, the Legislature further amended the definition to include vehicles bought and used for commercial purposes, seeking to afford small businesses protection under the Act. (Stats. 1998, ch. 352, § 1, pp. 2777–2778; see Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1848 (1997–1998 Reg. Sess.) as amended May 7, 1998, p. 2.) Finally, the Legislature in 2000 added a limitation to the second sentence of the “new motor vehicle” definition, providing that it only applies to vehicles “with a gross vehicle weight under 10,000 pounds.” (Stats. 2000, ch. 679, § 1, p. 4510.)
From this statutory context and history, we discern two points. First, in enacting and amending the Song-Beverly Act, the Legislature has maintained a distinction between “new” and “used” products and has specified the warranty protections applicable to each category. The Legislature has shown it knows how to legislate on “used” products (
Second,
Finally, another relevant piece of statutory context is the requirement, enacted as part of the Motor Vehicle Warranty Adjustment Program (
C.
The legislative history of the 1987 amendment (Assem. Bill No. 2057 (1987–1988 Reg. Sess.) (Assembly Bill 2057)) that added “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer‘s new car warranty” to the definition of “new motor vehicle” offers little insight on the question before us. (Stats. 1987, ch. 1280, § 2, p. 4561.) Materials related to Assembly Bill 2057 continuously note that the bill “amends and clarifies the lemon law” and “[a]mends the definition of a ‘new motor vehicle’ which is covered by the lemon law to include dealer-owned vehicles and demonstrator vehicles.” (Assem. 3d reading analysis of Assem. Bill No. 2057 (1987-1988 Reg. Sess.) as amended June 11, 1987, pp. 2, 3; see also Conc. in Sen. Amends. to Assem. Bill No. 2057 (1987–1988 Reg. Sess.) as amended Sept. 4, 1987, pp. 1–3.)
Although plaintiffs observe that the legislative history “shows a consistent effort to expand the ‘new motor vehicle’ definition,” the Legislature‘s incremental expansions do not indicate any intent to cover used vehicles with an unexpired manufacturer‘s new car warranty. Indeed, what we find most significant about the legislative history is that it makes no mention of used vehicles. Like the Court of Appeal, “we found no reference to used vehicles in any of the legislative materials regarding Assembly Bill Number 2057 (1987–1988 Reg. Sess.). One would assume that if the amendment proposed to expand manufacturers’ liability under the Act to a large class of used vehicles, such a change to the status quo would warrant mention if not discussion.” (Rodriguez, supra, 77 Cal.App.5th at p. 223.)
Nor do the views expressed by the Department of Consumer Affairs — an agency involved in both drafting and monitoring the impact of the original lemon law and this amendment — contribute much to resolve the question before us. (See Dept. Consumer Affairs, Enrolled Bill Rep. on Assem. Bill No. 2057 (1987–1988 Reg. Sess.) Sept. 25, 1987, p. 2.) According to the enrolled bill report, the added language was necessary because “[s]ome buyers [were] being denied the remedies under the lemon law because their vehicle [was] a ‘demonstrator’ or ‘dealer-owned’ car, even though it was sold with a new car warranty.” (Id. at p. 3, italics added.) But this sentence simply restates the disputed phrase, without shedding further light on its meaning.
Plaintiffs also point to
D.
Further, plaintiffs rely heavily on Jensen‘s assertion that “cars sold with a balance remaining on the manufacturer‘s new motor vehicle warranty are included within [the Song-Beverly Act‘s] definition of ‘new motor vehicle.‘” (Jensen, supra, 35 Cal.App.4th at p. 123.) We agree with the Court of Appeal in this case that Jensen is distinguishable because ”Jensen involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease.” (Rodriguez, supra, 77 Cal.App.5th at p. 223.) The plaintiff in Jensen had entered into a lease with a BMW-authorized dealership for a car with 7,565 miles on its odometer. (Jensen, at p. 119.) The dealer told Jensen that the car was a demonstrator, and as part of the lease agreement, the dealer gave her BMW‘s full 36,000-mile warranty “on top of the miles already on the car.” (Ibid.) As it turned out, the car was not a demonstrator; it had been previously owned by the BMW Leasing Corporation. (Id. at p. 120.) When Jensen encountered repeated problems with the car‘s brakes despite multiple repair attempts, BMW took the position that the car was not a “new motor vehicle” because it was not in fact a demonstrator and thus the Song-Beverly Act‘s refund-or-replace remedy did not apply. (Id. at p. 122.) The Court of Appeal rejected BMW‘s position, and it was in this context — where BMW had issued a new car warranty with the lease — that the court found Jensen‘s car to qualify as a “new motor vehicle” under
As the Court of Appeal in this case observed, “Given that [Jensen‘s] facts included a car leased with a full manufacturer‘s warranty issued by the manufacturer‘s representative, the [Jensen] court was not asked to decide whether a used car with an unexpired warranty sold by a third party reseller qualifies as a ‘new motor vehicle.‘” (Rodriguez, supra, 77 Cal.App.5th at p. 224; see Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 923 [Jensen “must be read in light of the facts then before the court, and [is] limited in that respect“].) The Court of Appeal here found Jensen‘s result to be correct but its reasoning infirm (Rodriguez, at p. 224), and it is not the only court to have questioned the broad statement in Jensen on which plaintiffs here rely. (See Kiluk, supra, 43 Cal.App.5th at p. 340, fn. 4 [“Would a car accompanied by a 20-year warranty still be a ‘new motor vehicle’ under the Song-Beverly Act on year 18? That would seem to follow from the holding in Jensen.“].) We disapprove Jensen v. BMW of North America, Inc., supra, 35 Cal.App.4th 112 to the extent it is inconsistent with this opinion.
E.
Finally, plaintiffs contend that their reading of the statute would avoid leaving “buyers of used cars with balances remaining on manufacturer new-car warranties . . . out to dry when stuck with lemons.” “[F]rom a public policy standpoint,” they say, “the onus should be on manufacturers to solicit the Legislature to strip certain vehicle buyers of the Act‘s protections, rather than force consumers to seek legislative assistance” to obtain those protections. For its part, FCA says the Legislature had good reason to distinguish demonstrators and dealer-own cars, which “are maintained professionally with a goal of keeping the vehicle in as-new condition in anticipation of a sale to the first consumer owner,” from preowned cars, whose “various transfers of ownership” may result in “difficulties of proving what maintenance or misuse a prior owner may or may not be responsible for.” Further, FCA argues that the unavailability of the refund-or-replace remedy for used cars with unexpired warranties still leaves those car owners with potential remedies under the California Uniform Commercial Code and the federal Magnuson-Moss Warranty Act. (See Rodriguez, supra, 77 Cal.App.5th at p. 225 [“the beneficiary of a transferrable express warranty can sue a manufacturer for breach of an express warranty to repair defects under the California Uniform Commercial Code“].)
We express no view on the parties’ policy arguments as to whether the Song-Beverly Act strikes an appropriate balance between protecting buyers of cars with unexpired new car warranties and cabining manufacturers’ liability for the refund-or-replace remedy. Those arguments are best directed to the Legislature, which remains free to amend the definition of “new motor vehicle” to include used vehicles with a balance remaining on the manufacturer‘s new car warranty. “Our task is to give effect to the statute as we find it.” (Haggerty v. Thornton (2024) 15 Cal.5th 729, 741.) For the reasons above, we hold that the phrase “other motor vehicle sold with a manufacturer‘s new car warranty” — considered in the context of the surrounding text of
CONCLUSION
We affirm the judgment of the Court of Appeal.
LIU, J.
We Concur:
GUERRERO, C. J.
CORRIGAN, J.
KRUGER, J.
GROBAN, J.
JENKINS, J.
EVANS, J.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Rodriguez v. FCA US, LLC
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 77 Cal.App.5th 209
Review Granted (unpublished)
Rehearing Granted
Opinion No. S274625
Date Filed: October 31, 2024
Court: Superior
County: Riverside
Judge: Jackson Lucky
Counsel:
Rosner, Barry & Babbitt, Hallen D. Rosner, Arlyn L. Escalante; Knight Law Group, Steve Mikhov, Roger R. Kirnos; Greines, Martin, Stein & Richland, Cynthia E. Tobisman, Joseph V. Bui and Alana H. Rotter for Plaintiffs and Appellants.
Barnes Law Firm and Stephen G. Barnes for Stephen G. Barnes as Amicus Curiae on behalf of Plaintiffs and Appellants.
Seth E. Mermin, David S. Nahmias and Leila Nasrolahi for the UC Berkeley Center for Consumer Law and Economic Justice, Consumers for Auto Reliability and Safety, Center for Auto Safety, Community Legal Services in East Palo Alto, Consumer Federation of America, National Consumer Law Center, National Consumers League, Open Door Legal, Public Counsel and Public Law Center as Amici Curiae on behalf of Plaintiffs and Appellants.
The Arkin Law Firm and Sharon J. Arkin for Consumer Attorneys of California
Clark Hill, David L. Brandon, Georges A. Haddad;
Shook
Orrick, Herrington & Sutcliffe, Max Carter-Oberstone, Katherine M. Kopp and
Counsel who argued in Supreme Court (not
Cynthia E. Tobisman
Greines, Martin, Stein & Richland LLP
Los Angeles, CA 90048
(310) 859-7811
Shane H. McKenzie
3601 West Olive Avenue, 8th Floor
Burbank, CA 91505
(818) 995-0800