Sonia Pascher ( California Accident Lawyer )
Your car has been in the shop four times for the same transmission shudder. The dealer replaces parts, says it is fixed, hands you the keys. Two weeks later the shudder comes back. You write to the manufacturer asking them to buy the vehicle back. A form letter arrives six weeks later saying they “cannot locate a pattern of defect consistent with repurchase eligibility.”
Meanwhile their own internal service bulletin, the one their technicians use, flags the exact transmission issue as a known problem across that model year.
That gap between what the manufacturer knows internally and what they tell the consumer externally is where California’s civil penalty provision lives. Cal. Civ. Code § 1794(c) allows courts to award up to two times the actual damages when the manufacturer’s refusal to comply with Song-Beverly was willful. On a vehicle worth fifty thousand dollars, that turns a buyback into roughly a hundred and fifty thousand once the penalty and the original refund stack together.
Plus attorney fees. Section 1794(d) requires the manufacturer to cover those too if the consumer wins.
What “Willful” Means Under This Statute and Why It Is Not as High a Bar as It Sounds
The California Court of Appeal answered this in Kwan v. Mercedes-Benz of North America, 20 Cal. App. 4th 1848. Willful means the manufacturer knew what Song-Beverly required and intentionally chose not to do it.
Not malicious. Not vindictive. Just… knew and declined.
So a manufacturer that receives a buyback demand, pulls up its own repair history showing six visits for the same defect, recognizes the vehicle meets the statutory threshold, and sends back a template denial anyway, that conduct meets the Kwan standard. They were aware of the obligation. They decided not to honour it. The form letter does not change the underlying knowledge.
How courts actually evaluate whether it was willful?
Judges look at the manufacturer’s own files. Service records where technicians flagged the same defect repeatedly. Internal technical service bulletins identifying the problem across that model. Communications between the dealer and the manufacturer’s regional rep. These documents get pulled during discovery and they frequently show the manufacturer had more information about the defect than they ever shared with the consumer.
Then there is the response timeline. A manufacturer that receives a demand and makes a reasonable offer within weeks, even if the numbers need negotiating, looks like it is operating in good faith. A manufacturer that sits on the demand for three months, responds with a lowball ignoring half the consumer’s documented expenses, then forces eighteen months of litigation before settling for close to the original demand amount, that response pattern is what willfulness arguments are built on.
Hmm, and one more thing courts weigh here. Whether the manufacturer maintains a qualified third-party arbitration program under § 1793.22. If they do not and the vehicle qualifies under the statute, that absence alone can support a civil penalty finding under § 1794(c) through a separate pathway that does not even require proving willfulness. Most of the competitor articles online skip this second trigger entirely.
The 30-Day Window That Lets Manufacturers Avoid the Penalty Completely
Section 1794(e)(4) gives the manufacturer an escape hatch. If they comply with a buyback demand within 30 days of receiving it, no civil penalty attaches. Period.
Thirty days to evaluate the claim, check their records, and either buy the vehicle back or offer a compliant replacement. If they do it, the penalty provision never activates regardless of how badly they handled the claim before the formal demand arrived.
That 30-day clock is why the demand letter matters so much. Everything before it is background. The demand starts the countdown that determines whether the manufacturer’s exposure stays at one-times damages or jumps to three-times.
AB 1755 and SB 26 Changed the Procedure, Not the Penalty Itself
California’s lemon law filings went from roughly fifteen thousand cases in 2022 to north of twenty-five thousand by 2024. The California Judges Association put out a figure saying close to 10% of all civil filings in Los Angeles County were now connected to these disputes. The courts were drowning.
The legislature responded with AB 1755 in September 2024, then cleaned it up with SB 26 in April 2025.
What actually changed
Pre-suit written notice is now required before civil penalties can attach. Starting July 1, 2025, a consumer has to send the manufacturer a formal written demand, name, VIN, summary of defects, and a statement requesting repurchase or replacement, before they can pursue the civil penalty in court. Certified mail or email to the address in the owner’s manual.
That notice requirement does something interesting though. It actually makes the willfulness argument stronger in cases that go forward. The manufacturer received a clear, documented, dated demand. They had 30 days under § 1794(e)(4). They either responded inadequately or did not respond at all. That paper trail is harder to explain away as a good-faith misunderstanding than the pre-2025 situation where willfulness had to be assembled from scattered repair records and vague correspondence.
The opt-in framework is genuinely unusual. SB 26 did not automatically impose the new AB 1755 procedures on every manufacturer. It created a voluntary system where manufacturers elect to operate under the new rules through the California Department of Consumer Affairs. Once opted in, the new procedures apply to that manufacturer’s vehicles for at least five years. Mandatory mediation within 150 days, restricted early discovery, shorter limitations windows.
Manufacturers with high complaint volumes have an incentive to opt in because the procedural framework reduces per-case litigation costs. Manufacturers that rarely get sued may not bother.
So which rules apply to your claim? Check the DCA’s published list. If your manufacturer opted in, the AB 1755 fast track governs. If they did not, older procedures apply. Two consumers with identical defects in identical vehicles can be on different procedural tracks depending solely on whether their manufacturer signed up.
The Economics That Explain Why the Penalty Provision Exists at All
Think about it from the manufacturer’s side for a second, because the math is revealing.
A forty thousand dollar vehicle qualifies for buyback. The manufacturer can either repurchase it promptly and take the $40,000 loss, or deny the claim, let the consumer hire a lawyer, drag the case for a year, and settle for maybe thirty-eight thousand because the consumer got exhausted. The manufacturer saved two thousand dollars and consumed a year of one person’s life to do it. Multiply that across several thousand claims per year and the institutional savings are real.
The civil penalty flips that calculation. If the refusal was willful, the forty thousand dollar exposure becomes a hundred and twenty thousand plus attorney fees. Now the early buyback at forty thousand is not just the right thing to do, it is the cheaper option by a margin so large that no rational risk assessment would choose the alternative.
The legislature understood this. The penalty is not punitive in the criminal sense. It is economic. It makes stonewalling more expensive than compliance, which is the only language some manufacturers respond to.
Why the fee-shifting under § 1794(d) is the piece that holds everything together
Without it, the whole system collapses. A consumer with a forty thousand dollar vehicle and a potential eighty thousand dollar civil penalty would still need to front tens of thousands in legal fees to get there. Most cannot afford that, the manufacturer knows they cannot afford it, and the economic barrier to litigation becomes a defence in itself.
Fee-shifting eliminates that barrier. Attorneys take these cases on contingency because the statute guarantees the manufacturer pays the legal bills if the consumer prevails. The attorney’s incentive aligns with pursuing the civil penalty because the larger recovery means a larger fee. Consumer access to the courts and the civil penalty provision work because § 1794(d) made them financially viable for ordinary people.
Remove the fee-shifting and the civil penalty becomes a theoretical right that only wealthy consumers can enforce. The legislature understood that too, which is why both provisions were written into the same section of the code.
References
- Cal. Civ. Code § 1794(c). Civil penalty up to two times actual damages for willful violation of Song-Beverly.
- Cal. Civ. Code § 1794(d). Prevailing buyer entitled to attorney fees and costs.
- Cal. Civ. Code § 1794(e)(4). Manufacturer avoids civil penalty if it complies within 30 days of demand.
- Cal. Civ. Code § 1793.22. Qualified third-party dispute resolution programs.
- Kwan v. Mercedes-Benz of North America, 20 Cal. App. 4th 1848. “Willful” defined as knowing of obligations and intentionally declining to fulfill them.
- Assembly Bill 1755, signed September 29, 2024. Procedural reforms, most provisions January 1, 2025.
- Senate Bill 26, signed April 2, 2025. Opt-in manufacturer framework, pre-suit notice operative July 1, 2025.
- California Judges Association, approximately 10% of civil filings in LA County connected to these disputes.
- Recording Law, “California Lemon Law: Your Complete Legal Guide” (February 2026). Filing data roughly 15,000 in 2022 to over 25,000 by 2024.
- CACI No. 3244, civil jury instruction for willfulness under § 1794(c). Justia.
