Courts in Wisconsin and California have ordered unsuccessful auto defendants to pay attorney fees that dwarf the compensatory damages awarded to the plaintiffs.
The two rulings may make it easier for consumers to persuade lawyers to represent them as plaintiffs in disputes with vehicle manufacturers and dealerships.
"It shows lawyers they can take a relatively small case - $5,000 to $10,000 in dispute - and if the defendants don't settle, and you take it to trial and even appeal, you'll get paid your rate, whatever is reasonable," says Vincent Megna of Waukesha, who represents the plaintiff in the Wisconsin case.
In that case, a Waukesha County Circuit Court judge ruled that General Motors must pay about $108,000 in attorney fees to a Cadillac owner who won a warranty dispute over the failure to repair his vehicle properly. That is more than 10 times the jury verdict in damages.
In the California case, the state Court of Appeal said Ventura Volvo in Ventura must pay $98,000 in attorney fees for a customer who won $14,812 in damages for the dealership's refusal to honor an extended warranty.
Plaintiff lawyer Lawrence Noble of Ventura says the decision "provides for a prevailing plaintiff-consumer to receive attorney fees and costs" even if the amount is higher than what the lawyer would collect under a contingency fee contract.
But dealership lawyer James Lehr of Los Angeles says the decision will "strongly encourage certain plaintiffs' lawyers to bring these cases," even claims that lack merit.