September 22, 2015

Dirty Diesel

Volkswagen and Audi have been caught cheating the American public. Big time. The scandal has shattered Volkswagen's populist image. Millions of cars are affected. Billions of dollars in fines are at stake. Car owners are furious. The German magazine Der Tagesspeigel reports that CEO Martin Winterkorn is out. Class action lawsuits, government penalties, and possibly criminal charges will follow. What, exactly, is going on?VW.jpg

Last Friday, the Environmental Protection Agency sent Volkswagen AG, along with its affiliates Audi AG and the Volkswagen Group, an official Notice of Violation concerning its use of an illegal "defeat device", used to evade emissions testing. You can read that letter here.

The EPA explains, "These cars contain software that turns off emissions controls when driving normally, and turns them on when the car is undergoing an emission test. Known as a “defeat device,” this design feature results in the cars emitting up to 40 times the amount of NOx emissions that the standards allow. NOx standards are in place to ensure public health is protected." The use of such a "defeat device" is highly illegal.

No sooner did this announcement hit the press than VW admitted its misconduct. That it is only now admitting its intentional and deliberate cheating practices is shocking. Although the scandal only just became public, VW knew it was caught as early as May 2014. And yet, it continued to install the devices on new cars being sold.

VW never thought it would get caught, and the fact that it did at all is a bit of a fluke.

Daniel Carder, a professor at West Virginia University's Statler College of Engineering, and team of five including two grad students, performed a study that found much higher on-road diesel emission levels for VW vehicles than what official U.S. testers were seeing. At first they couldn't believe the results, but confirmatory testing produced early evidence Volkswagen was cheating on U.S. vehicle emissions tests. That study was funded by the nonprofit International Council on Clean Transportation. They were actually looking for proof that diesel could be a clean fuel. The results caught even the testers by surprise. You can read more about the ICCT here.

"The testing we did kind of opened the can of worms," Daniel Carder, the mild-mannered West Virginia researcher who lead the investigative team, says. That is an understatement.

The study, completed in May 2014, was later corroborated by the United States Environmental Protection Agency and California Air Resources Board.

VW has been heavily marketing its small diesel cars as the Clean Green alternative for years. But even as it was launching a media campaign to lure environmentally responsible buyers, VW was brazenly equipping more than 11 million vehicles with the deceptive device over a period of more than 6 years. The affected diesel models include:

Jetta (MY 2009 – 2015)
Jetta Sportwagen (MY 2009-2014)
Beetle (MY 2012 – 2015)
Beetle Convertible (MY 2012-2015)
Audi A3 (MY 2010 – 2015)
Golf (MY 2010 – 2015)
Golf Sportwagen (MY 2015)
Passat (MY 2012-2015)

Consumers can get further information from the EPA here.

Consumers can get information about legal cases filed in California by contacting the law firm at

December 2, 2014

Buckle Up For Safety

The exploding airbag saga is not going away. We previously reported on this problem on October 21, 2014, in a post entitled "Lifesaver or Lethal Weapon?" on this site. But now, Japanese manufacturer Takata Corp. appears to be defying efforts of the National Highway Traffic Safety commission to recall the dangerous components nationwide.

Testifying before Congress today, company spokesman Hiroshi Shimizu insisted "I would drive a car with a Takata air bag." Skeptical lawmakers had to wonder how much he was paid to say that.

Takata wants to pass the risk and responsibility on to its client automakers in the United States, and have them decide whether to widen the recall to all cars nationwide or not. By one account, Honda has already agreed to do so. Facing that enormous expense, other car manufacturers are hesitating. airbag-explosion.jpgEarlier this week,Toyota said it intends to ask the industry to hire an independent engineering company for testing of the suspect parts. General Motors, Nissan, Subaru, Chrysler and Ford initially agreed to cooperate and to share results so that they can evaluate potential recall repairs. But events may be moving too quickly for that. You can read more about this emerging story here. Separately, Takata's Shimizu told Congress the company will set up its own "independent quality assurance panel" to investigate the matter. Just how "independent" this panel would be will be is anyone's guess.

It sounds more like a battle of the experts is brewing. And lawsuits. With at least five deaths, and many injuries alleged to be caused by the problem, Takata is busy putting its legal team in place. The Wall Street Journal reports that former Department of Transportation Secretary Norman Mineta will be among the hired hands.

Takata may be playing for time. Earlier reports indicated that it has insufficient replacement parts on hand to comply with the possible expanded NHTSA recall. Currently, the recall only covers regions of high humidity, because air humidity is thought to be factor in the fragmentation upon deployment. But the climate limitation is expected to change as the recall widens. And it should. If Florida is humid, what about North Carolina? Texas? California? And cars move around.

In the meantime, many consumers are taking precautions themselves, such as activating the PSIR switch that can turn off the supplemental restraint system ("SRS" the common acronym for airbags). But not all cars and trucks have a PSIR switch, or other suppression capability. If you have one of the millions of affected vehicles, check your manual or call the dealer.

Remember, whether or not your car has airbags, you should always use your seat belts anyway. It's time once again to heed the old jingle, "Buckle Up for Safety, Buckle Up."

July 21, 2012

Court Grants Preliminary Approval of $46 Million Settlement in Class Action Against Citizens Automobile Finance

The U.S. District Court for the Northern District of California has ordered class notice to be sent out in cases consolidated under the title Citizens Automobile Finance, Rees-Levering Cases, Cases No. C 10-05345 JSW. The Honorable Jeffrey S. White conditionally certified a class of approximately 2,167 California consumers who meet the definition paraphrased as follows: persons who purchased a motor vehicle and as part of that transaction entered into an agreement subject to California's Rees-Levering Automobile Financing Act, whose contract was assigned to Citizens, whose vehicle was repossessed or voluntarily surrendered, who were issued an NOI by Citizens from May 20, 2005 to June 30, 2011, and whose account was assessed a deficiency balance.

This consumer class action challenges the post-repossession notices sent by Citizens Automobile Finance, Inc. or RBS Citizens, N.A. Plaintiffs and the class alleged the notices did not comply with the Rees-Levering Act, thereby banning Citizens from collecting any deficiency debt claimed to be owing after the vehicles were sold at auction. The class members will have 100% of the debt extinguished. Citizens will cease all collection activity concerning those accounts. Citizens will contact the three major credit reporting agencies instructing them to delete the trade lines associated with these accounts. The total amount of outstanding deficiencies to be eliminated is about $46,786,977. The evidence in the case showed that Citizens has collected about $1,715,640 from class members. As part of this settlement, Citizens has agreed to refund about 85% of this amount.These sigificant and substantial benefits are automatic, without any claims process.

At the same time, Citizens expressly denies any wrongdoing and denies that its post-repossession notices are defective. Thus, the settlement is a compromise, intended to resolve the matter without the delay of protracted litigation.

In addition to Bryan Kemnitzer and Nancy Barron of the law firm Kemnitzer, Barron & Krieg LLP, the class was represented by Mark Chavez of the law firm Chavez & Gertler LLP, as well as attorneys Michael Lindsey and John Hanson.

Class notice will be mailed out on August 6, 2012. Final approval is scheduled for November and distribution should occur early next year subject to final approval by the court.

February 20, 2012

Airbag Safety Recall

The National Highway Traffic Safety Agency has issued a safety recall for side airbag inflators used by a variety of manufacturers. The federal safety agency warns of the airbag's possible failure to deploy in the event of a collision, due to an error in the propellant mixture causing insufficient output of compressed gas.

Owners of the affected 2012 vehicles should be notified by mail, but you can get more information by clicking on the NHTSA campaign numbers here. For Nissan 12V055, for Honda 12V030, and for Suburu 12V047

Of course, drivers should never totally rely on airbags, but use them as a secondary safety device. It is still important to buckle-up. Think of it like the lifeboat on a vessel – you don’t really know if it will inflate until you are sinking.

If you get a recall notice, be sure to schedule an appointment to get your car fixed.

November 15, 2010

Windshield Wiper Defects Are A Winter Safety Hazard

The California lemon law covers defects that impair the use, value or safety of a vehicle. This is called the “substantial impairment” rule. Only truly trivial matters fall outside the scope of the lemon law.

To our surprise, some manufacturers try to tell car owners that defective windshield wipers are not worth worrying about and that a failure to fix them is not covered under the lemon law. Nothing could be further from the truth. Are they confusing “little” with “trivial?” If you live anywhere but the Atacama Desert, windshield wipers are among the most important safety devices on any passenger vehicle.

Just as November weather is upon us, the National Highway Traffic Safety Administration has issued a recall of Chrysler Jeep 2008 model SUVs for defective windshield wiper motors. NHTSA Campaign ID Number : 10V550 If you get this notice, respond right away.

The windshield wiper was first patented by a female inventor named Mary Anderson. During a winter visit to New York City in 1902, she noticed that the trolley car operator drove with the front window open because of difficulty keeping the windshield clear of blinding sleet. Bundling her own overcoat more tightly, she thought of a mechanism to control the blade from inside of the trolley and keep the draught out. She had a model made of her design and patented it shortly thereafter. In those days a patent was good for just 17 years, and the auto industry took it up as soon as it expired.

Most automobiles use two synchronized radial type arms, while some SUVs and station wagons use one pantograph arm. The intermittent windshield wiper was invented by Bob Kearns. His battle with Ford Motor Company was chronicled in the award-winning movie, “Flash of Genius.”

Although there is a range of acceptable design, properly functioning windshield wipers are standard safety features on passenger vehicles. Don’t let any car dealer tell you otherwise.

June 24, 2010

NCLC Consumer Resources

nclc_logo.jpg The National Consumer Law Center just launched a new website. Check it out here. The nonprofit center, headquartered in Boston, has been a premier source of assistance for consumers, legal services and consumer lawyers for decades.

Its new website provides information on NCLC's recent reports, numerous publications and current initiatives. Among other things, NCLC publishes reports on scams and predatory trends in consumer transactions, manuals and treatises on a wide variety of legal topics affecting consumers, as well as other books for lawyers and the public alike.Return%20to%20Sender.JPG NCLC is the publisher of "Return to Sender - Getting a Replacement for Your Lemon Car" by Nancy Barron.

In addition to its publications, NCLC funds research, legal conferences and consumer education programs on a wide range of important consumer topics -- from automotive fraud and warranty law, to financial abuse of the elderly, energy policy, student loans, and predatory lending.

Kemnitzer, Barron & Krieg is actively involved in the work of NCLC. Bryan Kemnitzer is a member of the partner's council and Nancy Barron currently serves on its board of directors.

June 10, 2010

Vehicle Self Storage Is Not Always Safe and Secure

Many self storage facilities advertise long term garage space. Beware: this is a risky business for consumers. Storage companies often buy up properties in marginal neighborhoods on freeway frontage or on the fringe of town, where warehouse space is dirt cheap - but not always safe and not always secure.

Advertisements tout security, safety and trust. That trust may be misplaced. At the time of the space rental, storage tenants are often told they need separate insurance for their goods. That should not mean you have to buy it from them, with no opportunity to negotiate. If you are tempted to buy insurance onsite, check with your usual insurance company first. If the vehicle is stored for an extended period of time, the car may qualify for reduced registration as a "non-opp". The Form for a non-operational vehicle can be downloaded from the Department of Motor Vehicles here While you should keep the car insured for theft, be aware that insurance for garaged vehicles not being driven is very low. Your usual carrier will probably give you a discount. summer just around the corner and masses of Californians – especially students – on the move, many car owners find they need long term storage for a car or truck. If you are in this category, think it through. Will storage costs of an old car exceed depreciation over the rental term? It might be best just to sell the car now, and buy another used car when you return. Do not expect to be able to just park it on the street. Whether you are in the city or suburbs, most communities have a local ordinance limiting parking to 24-72 hours or by permit only. The best thing, of course, is to find a friend with an empty carport or a three-car garage. Good luck with that! More commonly, you may have to find long-term vehicle storage for a price. The E-How website has some good advice for storing vehicles, including the selection of a dry facility, adding a fuel-stabilizing additive to the gas tank, jacking the body up to relieve weight on tires, washing and covering the car. Further details can be read here.

We also advise that you remove all valuables from the car, even though it is in a locked space. This includes all information concerning the vehicle, like the owner’s manual, purchase documents and warranty history. Never keep the title with the car. Remove even the registration and insurance papers you would normally keep with you when driving. And of course, do not leave a set of keys in the vehicle. Self storage units are notorious for their high burglary rate, and although you hope the car will be secure, don’t take any chances with things you can easily remove.

May 10, 2010

Infiniti Safety Recall for Airbags

Airbags in a car are like the lifeboat on a small vessel. You don’t need them often, but you do need to know that they will work in an emergency. The problem is there is no easy way to test them out, because once deployed they must be professionally repacked.

Several years ago, a man and his wife came into our office. They had purchased a truck advertised to have driver’s and passenger’s side airbags. When their grandchildren came to visit, they looked for a switch (sometimes called a PSIR) that can suppress the airbag when children are present in the front seat. airbag.jpgThere was no suppression switch. Why? Because there were no airbags! Somehow, the manufacturer had engineered the vehicle in just such a way that the airbag did not fit on the passenger side. Oooops. The manufacturer (in that case GM) later argued that it “forgot” to tell the buyers they had left the airbags out. The vehicle could not be modified to add the airbags later. We filed a class action and, in the end, the owners of thousands of vehicles were entitled to rescind and return their trucks.

Learning that the advertised airbags were missing was like tossing a packed lifeboat into the water only to watch it sink instead of float and deploy. Even with airbags in vehicles, it is wise (and required under California law) to buckle up as well for the best protection in a crash. While they should not be relied on in place of seatbelts, properly manufactured airbags do save lives.

The Center for Auto Safety deserves credit for being an early proponent of airbags, and remains a good source of information concerning the variations in safety records of different brands. Nissan has been no stranger to problems in its sudden restraint systems over the years. For that reason, it was not a total surprise today when NHTSA announced a Nissan recall for nondeployment of passenger airbags in 2005-2007 Infiniti cars. See NHTSA Campaign ID Number 10V175.

April 13, 2010

"Repo-Madness" - New Report Is a Must-Read

The National Consumer Law Center has just published a new report on the shocking state of repossession abuse throughout the country. The short but thorough "REPO MADNESS - How Automobile Repossessions Endanger Owners, Agents and the Public," by NCLC staff attorney John van Alst and investigative reporter Rick Jurgens, is a riveting must-read for anyone who is planning to buy a car on credit. It can be read online or downloaded here.

repo-truck-4.jpgA midnight visit from the repo man is one of those things no one ever thinks could happen "to me." Yet, in 2009 alone nearly 2 million vehicles were repossessed. That's 2,000,000 cars and trucks! While some people got themselves into cars they just couldn't afford, many other people may have missed a single payment or been told by the lender not to worry while a late check was in the mail. Based on what our clients tell us, lenders and debt collectors are increasingly aggressive.

Most alarming is a map of the United States showing the location of violent acts associated with repossessions - assaults, battery, use of weapons, kidnapping, impersonation of law enforcement and even fatalities. The authors argue that, because repossessions are one of the only self-help enforcement mechanisms allowed by law, there is in fact a kind of lawlessness in the process. The term "self-help" in this context means that lenders can send out the tow truck by simply alleging that the owner of the car is behind in payments, without any proof or court judgment to back up the claim. "With most repossessions occurring without the involvement of law enforcement, parties often assert their rights in a sort of vigilante justice," the report explains.

This sort of vigilante justice invites a lot of mistakes. Sometimes the tow truck takes the wrong car. That's grand theft. Sometimes the tow truck driver is in such a hurry, he doesn't notice children napping in rear car seats. That's kidnapping. Scroll down through the Consumer Alerts section of our firm website to read "Repossess My Car But Not My Kids". With plenty of evidence and examples to back up their statement that "auto repossession remains a crude, unregulated
and naked exercise of force and guile," Van Alst and Jurgens offer a good case for nationwide reform.

While self-help repossession is still allowed, California has some powerful consumer protection laws to help combat abuses. Read the NCLC Report. And, if you have been a victim of repo-madness, do not wait to give us a call.

April 2, 2010

Repossession Class Action Settlements

The car repossession business is merciless, leaving consumers stranded without transportation. The idea that the repo man visits only deadbeats is a myth. We have heard nightmare stories of a car taken in the night after one late payment or a glitch in the way a dealer set up an electronic account. Many consumer advocates complain that desperate lenders engage in deceptive practices. We at Kemnitzer Barron & Krieg are doing something about it. Along with co-counsel, we have recently settled a number of significant class actions involving defective post-repossession notices.

Most consumers think that if they can’t meet their monthly payments, their car will be towed away and that is the end of it. Something like home foreclosure. However, that is not how it works. After the vehicle is repossessed, it will be resold at a discount auction for far less than the amount owing; and the lender then attempts to collect the deficiency from the original owner. At that point the consumer has no car, mangled credit and a mound of debt.

The best thing a consumer can do in a repossession situation is to try to reinstate the contract and get the car back. The lender must send the consumer a notice of how to do so - including where to send payment, to whom, and exactly how much. This notice is called an NOI.

Kemnitzer Barron & Krieg challenge NOIs that do not give the borrower sufficient information to reinstate or redeem their contract and recover their car or truck before it is sold at auction. California law provides that, if the post-repossession notices do not comply with the Rees Levering Automotive Sales Finance Act, the lender may not collect a deficiency after the vehicle is re-sold.

The approximate amounts of the deficiency balances defendants have agreed to erase, or otherwise not collect, are summarized in this list of cases that we have settled in the last few months.

McCoy and Castro v Alliant Credit Union (Alameda County Superior Court Case No. RG 09-444283) $7,370,853.

Meza and Pelkey v ACC Consumer Finance LLC (Alameda County Superior Court Case Action No. RG09458893) $15,319,729.

Friedrichs v BMW Financial Services (U.S. District Court,N.D. Cal., San Francisco Case No. C08-04486 PJH) $35,000,000.

Stephens v Bay Federal Credit Union (San Francisco Superior Court Case No. CGC08478197) $5,159,515.

Ford Motor Credit Company v O’Neal (San Diego Superior Court Case No. 37-2007-00077225-CL-CL-SC) $110,810,774.

Lobel Financial Auto Cases (Sacramento County Superior Court JCCP Case No. 4563, coordinated actions) $43,808,147.

In addition to waiver of the deficiency balances, class members entitled to refunds will get a cash return of all or most of the amount they paid. In each case, the terms and procedures involved in the distribution of refunds is included in the class notices that were mailed to each class member. For more information, including the contentions of the parties, settlement terms and identity of co-counsel, click here

March 23, 2010

Daimler AG Settles Case Alleging Massive Bribery Scheme

74895_luxurary.jpg Ever wonder why foreign dictators are so often depicted in black Mercedes Benz sedans? The answer might lie buried in court documents filed by the U.S. Justice Department today. The result of several years of criminal investigation, this case charges Daimler A.G. and three of its subsidiaries with violating the Foreign Corrupt Practices Act, which prohibits bribing officials of other countries. Among the 22 countries involved are Russia, Iraq, Latvia, Vietnam, China, Nigeria, Serbia, Croatia, Montenegro, Thailand, Turkmenistan, Uzbekistan, and Ivory Coast. It is not hard to imagine a veritable rogues' gallery of officials from these and other governments on the receiving end of the fleet. If Daimler's payment of the $185 million settlement reported by the Associated Press succeeds in shutting down the alleged operation, Hollywood might have to find another icon of international intrigue. Or, maybe this is just part of a creative new ad campaign.

March 16, 2010

Kemnitzer, Barron & Krieg Launches New Website

Kemnitzer, Barron & Krieg LLP, the host of this California Lemon Law Blog, has just launched a new website with a Q&A section on a variety of consumer protection areas, ongoing consumer alerts, attorney biographies, internet resources, a bibliography and contact links. Check it out here

The firm represents consumers throughout California and has, to date, filed cases in 34 separate California counties. Bryan Kemnitzer, Nancy Barron and Bill Krieg have a combined 99 years experience as trial attorneys fighting to protect consumer rights.

Supported by a dedicated staff, attorneys in the firm have taken individual and class action cases to trial, obtaining verdicts and judgments that include punitive damages and civil penalties. On the other hand, the vast majority of cases settle prior to trial. In settlement, Kemnitzer, Barron & Krieg have obtained debt relief exceeding $300 million, as well as thousands of new car replacements and refunds.

As California consumer lawyers, the members of the firm believe that every consumer is entitled to safe and reliable transportation, fair credit, truth in lending, access to the courts and freedom from fraud. All clients have the opportunity to learn more about consumer protection in ways that increase consumer literacy and save money, as well as resolve the particular case at hand.

March 6, 2010

Repossessions Have Serious Effect on Credit Score

Your credit score affects not only your ability to get a loan, but the interest rate you pay and many other aspects of personal finance. A car repossession is a big black blotch on your credit score. Contrary to popular belief, a voluntary surrender has the same negative impact on your credit report as a repo does. After all, as credit blogger John Ulzheimer reports, “Credit scores aren’t meant to evaluate the ethics involved with lending.” It’s simply a cold, hard calculation of the likelihood you will pay future bills. A negative trade line reporting repossession may stay on your credit report for up to 7 years. That is a long time to be in financial purgatory.

For this reason, in actions Kemnitzer Barron & Krieg bring to challenge unlawful repossession notices, deletion of the negative trade line from the credit report is on the list of remedies we seek. In the last few years, we have succeeded in requiring lenders to make efforts to halt reporting of more than $250,000,000 concerning repossession accounts. Some recent class actions involving this remedy are reported here.

Why does it matter? Beginning in the late 1980’s, FICO (Fair Isaac Corporation) and other credit scoring sources developed algorithms (mathematical formulas) and software that generate consumer credit scores from data collected by credit bureaus like TransUnion, Experian and Equifax. Some credit bureaus in turn license FICO’s credit-scoring systems to provide credit scores to lenders, insurance companies and consumers themselves.

Designed to predict consumer behavior, credit scores determine who gets approved or rejected for car loans, insurance, mortgage and credit cards, with the lowest rates going to consumers with the highest scores. Since the people least able to pay end up spending more in higher interest, this system locks in a vicious cycle of credit and debt.

Credit bureaus and FICO itself keep the formulas secret, labeling them “proprietary information.” Consumer advocates have long been troubled by this secrecy. It is one thing to keep the recipe for Coca Cola or KFC out of the public eye, but it is another to bar transparency of a system that can wreak havoc on millions of Americans’ financial lives. While the precise algorithms remain unpublished or under protective orders, you can get a sense of how the formula works here and here.

Regardless of the precise equation, it is clear that a repossession, which impacts both “amounts owed” and “payment history”, has a huge negative impact on the overall score. Of course, the best thing to do is avoid having your car or truck repossessed in the first place. If you are having trouble making car payments on time and risk a repossession, check out the advice from the Federal Trade Commission here. The FTC explains, “Once you are in default, the laws of most states permit the creditor to repossess your car at any time, without notice, and to come onto your property to do so.” Sometimes there are defenses to these repossessions or collection of the deficiency charges that follow. If your car has been recently repossessed, contact us.