Montco Lawyers Push Computer Lemon Law
Story by the Philadelphia Business Journal
Elizabeth Bennett, Staff Writer
Take a couple of fired-up consumer-protection lawyers, a down-to-earth state representative, and a constitutent's horror story about a defective computer, put them together, and what do you get?
You get Pennsylvania House Bill No. 1870, also known as the computer lemon law, a reference to its successful counterpart in the automobile industry. If this lemon law is passed, it will be the first legislation in the country to set guidelines for disputes between consumers and personal computer manufacturers.
The House consumer affairs committee held a public hearing on the bill Nov. 30, but no vote was taken. It could come up for a full house vote early next year, and is "engendering a reasonably good amount of bipartisan support" according to Rep. T.J. Rooney (D-Northampton), who introduced it.
Gov. Thomas Ridge could sign the bill as early as the spring, but it also could languish on the House floor and so Rooney is holding his bet as to the outcome.
"I'd be a millionaire if I could figure that out," he said.
The legislation was drafted by Rooney with the help of Craig T. Kimmel, partner with Kimmel & Silverman in Ambler, a law firm that has made its reputation handling automobile lemon-law cases in Pennsylvania and New Jersey.
"[The auto industry] is settling claims now with us," says Silverman. "It's not necessarily just that we win. It's that they realize we're not going away."
The firm handles about 2,500 automobile cases per year, plus hundreds of cases dealing with motorcycles, boats and computers.
Rooney said he became acquainted with Kimmel & Silverman when he was asked to look at an amendment to the auto lemon law. In the course of the work, computer-consumer protection issues came up.
Kimmel was making suggestions at the same time Rooney received a letter from a constituent detailing months of ineffectual struggling with the customer service department over a Gateway computer that never functioned properly.
"I thought we should do something about it," said Rooney. "The two kind of converged at once. ... Consumer needs aren't being addressed adequately in my estimation."
The bill, if enacted, will protect individual consumers as well as small businesses with under 30 workstations.
"The reason small businesses are included," said Kimmel, "is that these are not businesses with a lot of clout. They are basically consumers."
"Joe's Plumbing is not going to go out and get a lawyer" without this kind of law, added Kimmel's partner, Robert Silverman.
Kimmel was qualified to advise because he and Silverman had already handled several such cases under the federal Magnusson Moss Warranty Act, which requires all goods over $10 to be protected by a warranty.
But Magnusson is a weak law with a lot of loopholes, said Kimmel, making it easy for computer companies to play the waiting game.
"They don't perceive the need to budget for refunds," said Kimmel. "They stonewall, delay, and spend to avoid spending money in the future. It really is a siege mentality. ... The teeth behind the law is closing certain loopholes for denying a response."
Computer manufacturers use a number of tactics, said Kimmel, including blaming the software.
"You will hear ad nauseum that it's a software problem," he said, so the law would require the manufacturer to post a warning on the machine indicating any conflicting programs.
The manufacturer would also have only two chances to make repairs to the computer, and "if they are going to instruct a consumer to try a repair, that's one strike," said Kimmel.
The bill would also allow a small claims court judge to make a "quick, inexpensive decision," at the first hearing, said Kimmel, saving the consumer hassle and time. On this point the computer law differs from its automobile counterpart.
Another striking difference in the computer bill is that it would allow the court to award up to $6,000 in punitive damages.
The automobile lemon law does allow for possible damages but the option is completely at the discretion of the judge and is hardly ever exercised because judges want to see "truly egregious facts," said Kimmel.
The computer bill "provides for penalties at each stage. The manufacturers believe that delay and avoidance keeps their money in their pocket until the very end. [But] the computer lemon law says you will pay a penalty for that," said Kimmel.
Rooney said punitive damages called for in the bill "encourage a quicker resolution to a problem than the status quo, [with] the ultimate goal being fair, reasonable restitution.
"When you consider there is an inadequate playing field to begin with," said Rooney, "if they are going to play the hope-it-goes-away-game ... they are going pay for it."
More than likely, in most cases there won't be punitive damages, said Rooney.
Perhaps the most important facet of the bill for the consumer and small business is that it includes statutory fee-shifting. This means that attorneys fees are paid by the company being sued if it loses the case. As it stands with Magnusson-Moss, the payment of legal fees is at the discretion of the judge.
Fee-shifting is also important to Kimmel & Silverman, because it's the only way it gets paid.
The firm got started in 1991, half-way through a lemon-law battle with Chrysler which Kimmel had initiated.
"They pummeled us with papers and motions and hearings," said Silverman. "Craig [Kimmel] and I are fighters. We don't like to get pushed around and we don't like to see people get pushed around."
© 1999 American City Business Journals Inc.
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