Attorney General Gansler Announces Fiat Will Honor Chrysler “Lemon Law” Obligations; Seeks Protection for Maryland Dealers

BALTIMORE, MD (June 2, 2009) - Attorney General Douglas F. Gansler announced today that Fiat has agreed to honor the “Lemon Law” rights of Chrysler buyers after the Italian automobile manufacturer Fiat effectively takes control of the U.S. auto maker. Attorney General Gansler also announced that Maryland has joined with other States to oppose Chrysler’s efforts to terminate dealerships in violation of State law.

Fiat will effectively take control over the new company after Chrysler emerges from bankruptcy. Following negotiations with a group of state attorneys general, Fiat agreed to honor the right to seek and obtain a refund or replacement vehicle if consumers’ vehicles have a significant or recurring problem to which Chrysler consumers would have been entitled. The agreement has been included in an order issued today by the Bankruptcy Court judge.

Maryland’s “Lemon Law” provides consumers with rights and procedures to obtain a refund or a replacement vehicle if a new vehicle develops a significant problem that can’t be repaired after a certain number of repair attempts. Lemon Law rights vary from state-to-state, but generally apply for several years or up to certain mileage limits for new vehicles purchased or leased by consumers. During the 2009 legislative session, Maryland’s General Assembly enacted legislation supported by Attorney General Gansler increasing Maryland’s Lemon Law to 24 months or 18,000 miles, whichever comes first.

In addition to today’s announcement, Maryland also joined objections filed by Ohio and Illinois to Chrysler’s proposed termination of a number of Chrysler dealer franchises in their states.

“While Chrysler should be allowed to restructure in bankruptcy, it must do so consistent with State laws,” Attorney Gansler said. “Our objections contend that the proposed terminations fail to recognize protections provided for dealers under Maryland law.”

A hearing on the States’ objections to the proposed terminations is scheduled for Tuesday, June 9th in the U.S. Bankruptcy Court in New York.

Attorney General Gansler thanked Karen Cordry, Bankruptcy Counsel for the National Association of Attorneys General, for her assistance in reaching the agreement between the states and Fiat.

Consumers are encouraged to visit the Attorney General’s website at http://www.oag.state.md.us/consumer/lemon.htm to learn more about Maryland’s Lemon Law.