Legislative Victories -- Highlights

Protecting vehicle owners from dangerous auto repossessions

CARS and our coalition partners defeated an anti-consumer bill in California that would have allowed auto repossessors to trespass on private property to seize vehicles without warning, at any time of the day or night. CARS led the opposition to the bill (AB 2120, Chen), testified against it before the Senate Committee on Public Safety, built a coalition to oppose passage, and led successful efforts to persuade Governor Newsom to veto the bill. One of our top concerns: allowing trespassing on private property would risk violent altercations between repo agents and vehicle owners. Some may believe, with good reason, that their vehicles are being stolen.

CARS / coalition letter seeking veto of AB 2120

Governor Newsom's veto message

Preserving access to justice for victims of crooked car dealers

CARS and our coalition partners defeated an anti-consumer bill in California that would have denied justice to low and moderate-income victims of unscrupulous car dealers who rip off car buyers, then go belly-up and declare bankruptcy, leaving their victims in the lurch. The bill (AB 2677, Chen) was backed by huge, powerful, corrupt special interests including insurers, bond companies, and the so-called Civil Justice Association of California, which includes Big Oil, the tobacco industry, and other enormous corporations.

CARS testified against the bill and coordinated testimony before the Senate Judiciary Committee by a consumer who was victimized by a dealership that sold him and his wife a grossly unsafe severely rusted car that had undercoating slathered on the undercarriage to conceal the rust. He tried to get a refund from the dealership, but they refused. Then he attempted to get a refund from the bond company, and they denied his claim. CARS also built a coalition to help oppose the bill and led successful efforts to persuade Governor Newsom to veto the bill.

CARS / Coalition letter seeking veto of AB 2677

Governor Newsom's veto message

The Raechel and Jacqueline Houck Safe Rental Car Act
Signed into law by President Obama December 4, 2015

CARS led the successful multi-year battle to win passage of federal legislation, the Raechel and Jacqueline Houck Safe Rental Car Act, working closely with Raechel and Jackie's courageous, persistent, and inspiring mother, Cally Houck. Cally first contacted CARS President Rosemary Shahan in 2004, shortly after both her daughters were tragically killed by an unrepaired recalled Chrysler PT Cruiser that Enterprise rented out to the two sisters, ages 20 and 24, without bothering to get the safety recall defect fixed first. Raechel and Jackie were living in Santa Cruz, CA and rented the car so they could visit their parents in Ojai. They were riding on their way back to Santa Cruz when suddenly the defect happened. A faulty steering hose leaked fluid onto the hot engine and caused an under-hood fire. The car lost steering and veered across the median and head-on into an 18-wheeler, exploding on impact. It was every parent's worst nightmare.

At first, Enterprise attempted to blame the crash on Raechel and Jackie. But after Cally sued Chrysler and Enterprise under California's state laws against negligence and wrongful death, the truth came out. A manager at Enterprise admitted in a deposition that Enterprise routinely rented out recalled cars, whenever the demand for rentals exceeded their stock of safe vehicles. Enterprise offered Cally millions of dollars to settle the case, but only if she would sign a "gag" clause that would have silenced her from speaking up about the tragedy that claimed her daughters' lives. Rosemary asked her to refuse, so she would be free to tell the truth and help save others from suffering such a horrendous loss. To Cally's great credit, she did refuse to be gagged, and her voice made all the difference in winning passage of Raechel and Jackie's Act.

Eventually, Chrysler settled, and sent Cally a check. But -- adding insult to horrible injury -- it bounced, due to Chrysler's going bankrupt. Finally, right before the case went to trial, Enterprise admitted 100% liability -- thereby avoiding the possibility of having to pay punitive damages. A unanimous jury awarded Cally and her former husband $15 million in compensatory damages.

In 2011, after the case was over and Cally was able to talk freely about the tragedy, CARS sponsored legislation authored by then-Assemblymember Bill Monning, AB 753, that would have made California the first state to enact legislation to specifically prohibit rental car companies from renting out unrepaired recalled vehicles. Due to vociferous opposition from the rental car industry, the bill failed to pass. The industry sought harmful amendments, including one that would have allowed them to continue renting and selling vehicles if they merely disclosed that the vehicle had an "open recall" -- shifting liability onto their victims. CARS, Cally Houck, and Assemblymember Monning refused to accept the amendment, and withdrew the bill. But that effort helped pave the way for federal legislation spearheaded by CARS that did become law.

The rental car industry complained that if California enacted such a law, it would create a "patchwork" of state laws and interfere with interstate commerce. They insisted that any legislation had to be federal and apply nationwide. They clearly thought they would have the upper hand in Congress. However, they underestimated our resolve.

CARS hired injury prevention champion and former member of CARS Board of Directors Pamela Gilbert to represent CARS in Washington, DC, and coordinated closely with her on strategy, outreach, and implementation. It took years of arduous work, but finally we won.

The Act prohibits rental car companies with fleets of 35 or more rental or loaner vehicles from renting or selling unrepaired recalled used vehicles to anyone until the potentially deadly defects have been repaired. The Act adds an important layer of protection, in addition to existing state laws against harmful practices such as negligence, wrongful death, or violation of the common law duty of care. The Act is enforceable by the National Highway Traffic Safety Administration (NHTSA), which has the authority to investigate whether rental car companies are complying, and to assess fines and also pressure companies that violate the law to put procedures in place to ensure that recalled vehicles are fixed before they are rented or sold. Most importantly, NHTSA can enforce the law without anyone having to suffer damages, or be injured or killed -- preventing tragedies and saving lives. For example, in 2023 NHTSA cracked down on Zipcar and entered into a consent order that not only penalized Zipcar $300,000, but compels them to submit to audits and monitoring to ensure future compliance.

Because rental car companies purchase vehicles from auto manufacturers, the vehicles they rent or sell are "used." Since 1967, until Raechel and Jackie's Act took effect, the only federal prohibition against car dealers selling recalled vehicles applied to new cars. But starting on June 1, 2016, when Raechel and Jackie's Act took effect, for the first time federal law also prohibited the rental or sale of recalled used vehicles.

Raechel and Jackie's Act was actively supported by the Obama Administration, including Secretary Anthony Foxx and the Administrator of the National Highway Traffic Safety Administration, Dr. Mark Rosekind, and senior NHTSA staff. The #1 sponsor in the U.S. Senate: Senator Chuck Schumer (D-NY). Other leading champions: Senators Barbara Boxer (D-CA), Senator Claire McCaskill (D-MO), Representative Lois Capps (D-CA), and Representative Jan Schakowsky (D-IL).

Read more: LA Times: "One mother spent a decade after her daughters' deaths changing car-rental laws"

• AB 2410 (1998), authored by Assembly Majority Leader Kevin Shelley -- prohibits auto manufacturers from imposing "gag" agreements upon lemon owners as a condition of repurchasing lemon vehicles -- landmark legislation -- CA remains the only state in the US that has such a law to protect lemon owners' free speech rights and improve protections against the fraudulent resales of seriously defective lemon cars (known as "lemon laundering").
   
• SB 1718 (2000), authored by Senator Byron Sher -- expands CA's lemon law to include vehicles purchased for business use, providing protections for individual entrepreneurs, self-employed people, and owners of small businesses that own up to 5 vehicles. Reduces from 4 to 2 the number of repair attempts to trigger the lemon law presumption, when a vehicle has a life-threatening safety defect.
   
• SB 1458 (2002), authored by Senator Gloria Romero -- raises the auto dealer bond requirement in order for dealers to obtain a license to do business in CA, from $10,000 to $50,000.
   
• SB 508 (2003), authored by Senator Martha Escutia -- helps curb discriminatory auto lending by requiring dealers to maintain key records of financial transactions for at least 7 years, making it possible for law enforcement authorities and victims of discriminatory lending practices to identify patterns / disparities.
   
• AB 68 (2005), authored by Assemblymember Cindy Montanez -- California's Car Buyers Bill of Rights -- this bill was not sponsored by CARS, but it was introduced in response to a more pro-consumer initiative drafted by CARS, and CARS played the leading role in working to strengthen it as much as possible for car buyers. The first version was vetoed by then-Governor Schwarzenegger, but the subsequent measure was signed into law, after labor unions gathered signatures on the petitions to place the stronger measure on the ballot.
   
• SB 234 (2007), authored by Senator Ellen Corbett -- expands protection under California's auto lemon law to include members of the Armed Forces, regardless where they purchased their lemon vehicles -- landmark measure -- CA remains the only state with such a provision -- passed unanimously in both houses of the legislature and was signed into law by then-Gov Schwarzenegger.
   
• AB 647 (2009), authored by Assemblymember Mariko Yamada -- requires the California DMV to comply with the federal Anti-Car Theft Act and allow public access to the National Motor Vehicle Title Information System, established at the U.S. Department of Justice -- passed unanimously in both houses of the legislature and was signed into law by then-Gov. Schwarzenegger, despite last-minute opposition from the California DMV.
   
• SB 95 (2009), authored by Senator Ellen Corbett -- requires auto dealers to tender payment on liens before they can sell vehicles that are traded in with negative equity / an outstanding lien (or, if the dealer retains the vehicle, within 21 days), was enacted with widespread bi-partisan support.