Judicial Hearing On Suspension of Chrysler Shipments to California

08/29/96

Reuters has reported that an administrative judge in California heard testimony on Tuesday regarding a proposal to keep Chrysler from shipping vehicles into the state for two months. The proposal arose after the same administrative judge found that Chrysler violated California's Lemon Law 116 times by re-selling repaired cars and trucks without proper documentation.

The judge heard testimony in Sacramento about the economic impact a two month suspension of shipments would have on dealers, consumers, and local governments, said state Department of Motor Vehicles spokesman William Gengler.

The state Department of Motor Vehicles asked the judge to review the impact of the proposed 60-day suspension, which would prohibit Chrysler from delivering vehicles to dealers during the time period and place the company on probation for three years.

Chrysler's 116 violations of the California Lemon Law included failing to notify used car buyers of the status of the vehicles sold and failing to provide warranties. The violations took place in 1992.

Chrysler responded to the proposal by vowing to continue selling vehicles in California. The company said it would either settle alleged violations of the Lemon Law or prevail in the appeal process.

California authorities said they have been investigating the Chrysler matter for more than two years and stand steadfastly by the allegations: "Action should definitely be taken against Chrysler because of the extent of the violations in California," Gengler said. "We sent the proposed decision back to the judge because we were concerned about the economic impacts it would have on innocent third parties."

The judge will reaffirm or modify his earlier decision regarding the proposal when the hearings are finished. Then the Department of Motor Vehicles must accept, modify or reject the proposal. If they accept the proposal, Chrysler will have the chance to take the case to the new Motor Vehicle Board, or appeal to a higher state court.

Paul Dever -- The Auto Channel