Suits & Settlements: The Car Pro Legal Roundup

• New York Targets Nissan Lease Buyout Overcharges
• GM Hit With $15 Million Dealer Allocation Lawsuit
• Judge Blocks Alleged Auto Warranty Impersonation Scheme
• Honda Sued Over Alleged Camera Defect Affecting Safety Systems

New York Targets Nissan Lease Buyout Overcharges. Nissan’s captive finance company has agreed to audit lease buyout transactions at 45 New York dealerships and ensure customers are reimbursed for improper charges following a settlement with the New York Attorney General’s Office, according to Automotive News. The settlement stems from allegations that some Nissan dealers overcharged customers seeking to purchase their leased vehicles between 2020 and 2022, a period marked by tight vehicle inventories and soaring used-car values. State investigators alleged certain dealerships refused to honor contractual buyout prices, added unauthorized documentation fees, charged for products customers did not request and passed along certification fees that Nissan Motor Acceptance Corp. had instructed dealers not to charge. The attorney general’s office previously reached settlements with 15 dealerships accused of overcharging customers on more than 3,000 transactions, resulting in agreements to repay consumers and pay a combined $1 million in penalties. Under the new agreement, Nissan Motor Acceptance Corp. neither admitted nor denied wrongdoing but agreed to audit transactions at the remaining New York Nissan dealerships, reimburse affected consumers or require dealerships to do so, and repay any related interest or finance charges collected on improper fees. The settlement also requires Nissan’s finance arm to strengthen oversight of lease buyouts and implement additional safeguards by 2027. New York Attorney General Letitia James said the action is intended to ensure consumers who were improperly charged receive restitution, while Nissan said it is enhancing policies and dealer oversight to better protect customers.

GM Hit With $15 Million Dealer Allocation Lawsuit. A New York Chevrolet dealership has filed a $15 million lawsuit against General Motors, alleging the automaker improperly reduced the store’s vehicle allocations and withheld inventory in retaliation for its business practices, according to Car Dealership Guy and other reports. The lawsuit, filed by a dealership in New York state, claims GM unfairly penalized the retailer through its vehicle allocation system, limiting access to high-demand inventory and causing significant financial harm. The dealer alleges the actions violated franchise protections and contractual obligations, while seeking at least $15 million in damages. GM has denied wrongdoing and maintains that vehicle allocations are based on established business metrics and performance criteria. Dealer allocation disputes have become increasingly contentious in recent years as automakers exercise greater control over inventory distribution, particularly during periods of constrained supply and the transition toward electric vehicles. The case is being closely watched because it touches on one of the most sensitive issues in dealer-manufacturer relations: whether automakers can use allocation decisions to influence dealer behavior. Legal experts say the outcome could have implications beyond General Motors, particularly if the court provides guidance on how far manufacturers can go in using allocation systems without running afoul of franchise laws designed to protect dealers from coercive practices.

Judge Blocks Alleged Auto Warranty Impersonation Scheme. A federal judge in Illinois has granted an injunction in favor of an extended auto warranty company that accused a rival of misleading consumers through deceptive phone calls and online impersonation tactics, according to Law360. The dispute centers on allegations that the competing warranty provider used marketing practices designed to confuse consumers into believing they were dealing with the plaintiff company, including allegedly mimicking its branding and contacting customers under false pretenses. In issuing the injunction, the judge found the plaintiff was likely to succeed in proving violations of trademark and unfair competition laws and concluded that allowing the challenged practices to continue could cause ongoing harm to the company’s reputation and customer relationships. The ruling bars the rival from engaging in the disputed conduct while the lawsuit proceeds. The case highlights growing legal scrutiny surrounding the extended vehicle warranty industry, which has long faced criticism from regulators and consumers over aggressive marketing tactics, robocalls and potentially misleading solicitations. While the court has not yet ruled on the ultimate merits of the lawsuit, the injunction represents an early victory for the plaintiff and signals the judge’s concern that consumers could be misled by the alleged impersonation efforts.

Honda Sued Over Alleged Camera Defect Affecting Safety Systems. A proposed class-action lawsuit filed in California federal court accuses Honda Motor Co. of selling vehicles with defective front-facing cameras that can disable multiple advanced safety features, according to Law360. The lawsuit alleges certain 2018 through 2025 Honda vehicles suffer from a camera defect that can cause failures in systems that rely on the camera, including collision mitigation braking, lane-keeping assistance, adaptive cruise control and traffic sign recognition. Plaintiffs claim the defect can leave drivers without critical safety technology they expected to be available and functioning, while dashboard warning lights may illuminate and alert drivers to system malfunctions. The complaint alleges Honda knew or should have known about the issue through customer complaints, warranty claims and dealership service records but failed to adequately disclose the problem or provide a permanent fix. The lawsuit seeks damages and other relief on behalf of affected owners. Honda has not publicly responded to the allegations or admitted wrongdoing. The case adds to a growing wave of litigation involving advanced driver-assistance systems as vehicles become increasingly dependent on cameras, sensors and software to operate safety features that many consumers now view as essential equipment rather than optional technology.