Opinion ID: 537190
Heading Depth: 3
Heading Rank: 1

Heading: The Requirement of First Resort

Text: 35 No one contests that New York may establish a separate consumer dispute resolution mechanism, replete with substantive and procedural regulations, in addition to GM's federally mandated program. Instead, GM challenges Sec. 198-a(g)'s purported requirement that a consumer seeking relief under the Lemon Law first submit to a manufacturer's existing arbitration program--e.g., the instant GM-BBB program. GM argues that this provision eliminates the voluntary aspect of the GM-BBB program and forecloses consumer choice by requir [ing] consumers to resort to the FTC-GM consumer arbitration program as a precondition to seeking relief under the New York Statute. GM urges us to immunize its program from state legislation so that it would preserve for the consumer the choice of opting for a non-binding informal arbitration system based on equitable judgments by lay persons. 4 36 While recognizing that the state legislation is far from a model of clarity, we believe that GM and the dissenter partially misinterpret these provisions of the Lemon Law. We read section 198-a(g) to require a consumer to submit to a manufacturer's existing arbitration program before bringing suit under the Lemon Law, but not prior to pursuing relief under the newly created State's Attorney General arbitration program applying Lemon Law, or prior to seeking judicial relief outside the Lemon Law. 5 In effect, subdivision (g) creates an exhaustion requirement which makes participation in a manufacturer's existing dispute resolution mechanism a prerequisite to seeking judicial relief under the Lemon Law. In our view, this statutory scheme neither harms the consumer nor unconstitutionally burdens federal regulation. 37 The Lemon Law not only permits three separate avenues of relief to remain available to the consumer--the GM-BBB program, New York's Attorney General arbitration mechanism, and judicial relief--but these routes of redress become meaningful under its terms. In various subtle but significant ways these forums differ as vehicles for affording relief--for example, the consumer may have to pay a filing fee under the State's mechanism while GM's is generally free; 6 GM's program is binding only on the manufacturer while the State's is binding on both. 7 Accordingly, we view the Statute's exhaustion requirement as merely inducing use of the manufacturer's program, while preserving the consumer's option to choose between the State's and GM's arbitration programs. These features are not contrary to the intent of the Consent Order which assures that consumers will receive fair and equitable decisions when they submit to GM's arbitration program. 38 We now address the thrust of GM's complaint: namely, the requirement that its arbitration program must comply with the substantive decisional criteria and record-keeping procedures of the Lemon Law.