D.C. Mayor Marion Barry has signed a controversial "lemon law," paving the way for the city to join 33 states in providing protection for consumers when they buy defective cars.
The measure, which must be approved by Congress when it convenes in January, passed the City Council on Tuesday and was endorsed by the mayor. Barry signed the bill on Friday, despite a last-minute effort by some consumer groups to kill the bill.
Declaring that "the lemon law is a lemon," Clarence Ditlow, executive director of the Center for Auto Safety, and eight other consumer activists wrote a letter to Barry urging him to veto the bill and send it back to the council for repair. They said that the arbitration mechanism in the District law will prolong the time it takes a consumer to collect on a car or other personal vehicle that turns out to be defective.
Council member John Ray (D-At-Large), who introduced the law more than a year ago, said the bill contains the best possible features of the "lemon laws" that have been passed around the country. His administrative assistant, Margaret Gentry, said that the "lemon law," like any other law, is subject to council amendment if necessary.
Virginia and Maryland's "lemon laws" took effect July 1. All of the "lemon laws" basically require manufacturers and dealers to provide refunds or replacement vehicles for consumers whose new cars turn out to have major defects. But the terms under which consumers can collect vary from one state to another.
Here is a summary of what local "lemon laws" provide, at the moment:
* District of Columbia -- Allows consumers to claim a refund or a replacement car if a safety-related defect cannot be repaired in one attempt, if a defect which is not related to safety cannot be repaired in four attempts, or if the car is out of service for 30 days because of unrepaired defects. This applies during the first 18,000 miles or first two years of operation of new cars. It requires dealers to tell shoppers in writing about any major used-car defects the dealer knows or should have known about. To collect a refund or get a replacement, consumers must go through the arbitration process established for the D.C. "lemon law" and operated by the District. This arbitration process is nonbinding on either party.
* Maryland -- Allows consumers to claim a refund or replacement car if a defect cannot be repaired in four attempts or if the car is out of service because of unrepaired defects for 30 days. The law applies during the first 12,000 miles or first year of operation of new cars. To collect refunds or get replacement cars, the consumer must go through the manufacturer's arbitration program, if that program complies with federal law. Most manufacturer programs in Maryland are binding on the manufacturer but not on the consumer.
* Virginia -- Allows consumers to claim a refund or replacement car if a defect cannot be repaired in four attempts in 12 months or if the car is out of service because of unrepaired defects for 30 days. To collect, the consumer must go through the manufacturer's dispute resolution mechanism, if there is one. Most manufacturer programs in Virginia are binding on the manufacturer but not on the consumer. If the manufacturer does not have a dispute reconciliation mechanism, the consumer can take the case directly to court.
No cases have developed under the "lemon laws" in Virginia or Maryland. State officials suggested that not enough time has passed for a case to develop, because the consumer would have had to purchase the new car after July 1 in order to use the law.
Another reason for the absence of claims, officials said, is the fact that the car industry's alternatives of replacing cars or giving a refund are not palatable.
Despite the absence of a case, consumers apparently are arming themselves with the information they might need in event their cars develop defects. Hank Greenberg, director for legislation and research for the Maryland attorney general's office, said that 3,370 consumers have requested copies of the fact sheet explaining how the "lemon law" works and what they need to do to qualify for its protections.
The pending District law, which has been the subject of extensive debate, was opposed by business groups as well as consumer activists. Manufacturers opposed the refund provisions, and dealers fought against the requirements for disclosure of used car defects.
Consumer groups supported the measure until recently, when its provisions for arbitration were changed.
In the original version, a consumer seeking redress for a "lemon" would have used a manufacturer's arbitration program, when one existed and was in compliance with federal guidelines. Manufacturer programs usually are binding for the manufacturer, but not for the consumer.
After hearing testimony suggesting that manufacturer arbitration programs serve manufacturers better than they serve consumers, however, council member Ray amended the bill to provide for a District-operated arbitration program.
Ditlow said that he does not object to the District running its own arbitration program. But he contends that making the program mandatory and the results nonbinding is a step backward, because it means that a consumer can win the arbitration proceedings and find himself being sued by the manufacturer who decides to fight the case through the courts.