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Chrysler Settles Lemon Law Case With California DMV

SACRAMENTO, Calif.--March 21, 2002--The California Department of Motor Vehicles has reached a settlement agreement with Daimler-Chrysler Corporation in its administrative enforcement case involving 119 Lemon Law buybacks in California.

The DMV had filed its administrative accusation against Chrysler in August 1994 and had originally adopted the findings of fact by a neutral administrative law judge that Chrysler had committed acts of fraud, false advertising and violations of the California Lemon Law in repurchasing and reselling used Lemon Law vehicles throughout the State of California without informing the consumers. DMV officials said that some of the vehicles were sold with unrepaired safety defects. Following numerous appeals through the courts over eight years, Chrysler finally agreed to pay the State of California $325,000 in attorney fees and investigation costs to settle the accusation and avoid the original DMV decision that had ordered a 45-day suspension of Chrysler's manufacturer's license to do business in California.

As part of the settlement, the DMV required Daimler-Chrysler to establish to the DMV's satisfaction that Chrysler resolved claims of consumers who had purchased the vehicles identified as ``Lemons.''

In announcing the settlement agreement, California DMV Director Steven Gourley said, ``This settlement and the stronger Lemon Laws enacted by California in 1995 send a clear message to the industry that California will not tolerate these kinds of abuses.''

The California DMV licenses drivers; maintains driving records; registers and issues titles to vehicles and vessels; investigates auto and identity related fraud; licenses vehicle manufacturers, vehicle dealers, salespersons, vehicle dismantlers, driving schools, and traffic violator schools. The DMV is a department of the Business, Transportation and Housing Agency, Maria Contreras-Sweet, Secretary. Additional information about the DMV can be found on the department's Web site at: www.dmv.ca.gov