New Lemon Law Limits in Effect in Wisconsin

By DINESH RAMDE | March 4, 2014

If the vehicle you just bought turns out to be a lemon, you’ll have less time after this weekend to seek damages from the manufacturer and you won’t get as much money.

The restrictions that went into effect Saturday drew broad bipartisan support when state lawmakers approved them last year. Supporters said the previous law left too much room for abuse by consumers and lawyers. Opponents say the new rules favor corporations over people.

The lemon law applies to new vehicles on which the manufacturer fails to repair a warranty-covered defect even after four tries in one year, or fails to provide a timely refund or replacement. Previously, car owners had six years to sue the carmaker, and they’d be eligible for mandatory double damages. Now they have three years, and they can only get actual damages.

The changes bring Wisconsin’s lemon law in line with those in other states, said Chris Snyder, general counsel for the Wisconsin Automobile & Truck Dealers Association, a trade group that supported the measure.

“Consumers are still protected under this bill,” Snyder said.

Wisconsin’s efforts to water down its lemon law began last year with a bill crafted by Republican lawmakers. It would have eliminated the mandatory awarding of consumer damages and attorney fees and forced consumers to file lawsuits within two years.

After that version drew opposition, the Assembly Judiciary Committee removed the restriction on damages and allowed customers three years, not two, to file suit.

Democrats and Republicans supported the updated version. The state Senate passed it by a 32-1 vote, and the Assembly passed it 88-8.

State Rep. Gary Hebl, D-Sun Prairie, was one of those who voted no.

“The whole pattern with the current administration is not to look out for consumers, which we all are, but to make sure big business is protected,” he said. “That’s wrong.”

Roshan Rajkumar, who represents several car manufacturers, said the new law simply weeds out people looking to take advantage of the system.

He cited a hypothetical case in which a person bought a vehicle in 2008, had mechanical issues within the first year but continued driving it until 2014. At that point, the person could have demanded a refund from the manufacturer, he said.
“We see those cases. It’s almost like taking advantage of the warranty and then wanting some benefit when the warranty is gone,” Rajkumar said. “If a vehicle legitimately has a lot of issues, consumers typically bring it in in one or two years.”

Vince Megna, a Milwaukee attorney who built a national reputation representing clients who sue under the lemon law, disagreed. He said about 40 percent of his cases involve people who come in after three years because even though they’re fed up, they keep the vehicle while it’s under its three-year warranty. With a three-year cutoff to take legal action, those customers won’t have recourse, he said.

“Not one item has been added to this law that helps a consumer,” he said. “Every item hurts the consumer and helps the manufacturer. It’s horrible.”

Wisconsin residents who are out of luck can still sue under a federal law that has a six-year statute of limitations, Megna added, but that law provides less compensation.

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