Consumer Law

Can Consumers Sue the new Chrysler?

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Whether Chrysler owners may sue based on the lemon laws or for personal injury caused by product defects is not settled. Christopher Jensen, writing today in the NY Times, said that the new Chrysler, the company that is expected to emerge from bankruptcy court, will honor warranties, but will only be responsible for personal injury lawsuits for vehicles sold after the bankruptcy. Similarly, Chrysler is refusing to allow lemon law lawsuits hiding behind the bankruptcy court's automatic stay.

Chrysler?s plan is unusual because bankruptcies are normally used to get rid of existing, tangible debts, not to try to prevent future obligations that might be created by consumers? lawsuits in the future, said Richard A. Zitrin, a San Francisco attorney and expert in legal ethics, said that Chrysler's position ?sounds bizarre to me."

Because Chrysler did not explicitly say that it would be responsible for future product-liability suits involving vehicles already sold, it is clear Chrysler is trying to avoid potential liability to current owners, said Clarence Ditlow, who is the director of the Center for Auto Safety in Washington, D.C.

Late on Tuesday, a coalition of consumer groups asked the bankruptcy court not to let the new Chrysler shed potential liability for any future defective product claims by current vehicle owners. The groups making the request are Public Citizen, the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety and the National Association of Consumer Advocates.

Full post as published by Lemon Law Blog on May 20, 2009 (boomark / email).