Suing car dealers

Litigation against auto dealers has gotten better-organized and more entrepreneurial, according to a report in the trade publication FastTrack.

“We probably have 12 to 13 lawyers down here who make their living solely on suing auto dealers,” says Ted Smith, Executive Director of the Florida Auto Dealers Association. “The Florida litigation environment for dealers is an evolving nightmare. It is a norm to see an attorney bring a case for damages of $10,000 and a court award of $200,000 in attorneys’ fees. There is no way to stop the trial lawyer from churning fees even [in] small damages cases.”

California lawyers invoked the state’s famously broad consumer-protection laws to sue about 1,200 auto dealers for sins that included using the wrong font size in ads or using the acronym “A.P.R” instead of spelling out “Annual Percentage Rate”. Dealers were graciously afforded the chance to settle for $10,000 apiece. (Matt Pinnell, “Hunt for the Frivolous Lawsuit”, FastTrack (AIADA), Fall). And New Jersey lawyers have hit nearly every dealership in the state with class actions alleging excessive or poorly disclosed fees for vehicle registration and other services; settlements have been controversial, however, for providing juicy fees to the lawyers while affording consumers only coupons. (Charles Toutant, “Car-Dealer Class Actions: Coupons for Clients, Big Bucks for Lawyers”, New Jersey Law Journal, Nov. 3).

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