One of the largest consumer law firms in the state specializing in suing car dealerships under the Consumer Legal Remedies Act for selling vehicles with undisclosed “frame damage” was just hit with a judgment of $1.2 million after a trial in Los Angeles. Judge Jon R. Takasugi awarded the Plaintiff, Hawthorne Auto Market, Inc., $200,000 in general and special damages, and $1 million in punitive damages in its defamation and contractual interference case against Sadr.

ALG obtained a transcript of the March 22, 2023 hearing where Judge Takasugi reviewed the evidence, ruling that Sadr’s business model “teeters on a razor’s edge of ethics.”

The Sadr Law Firm, alternatively called The Car Law Firm, and its principal attorney and founder, Kasra Sadr, has long been the bane of used car dealers throughout California. There has also long been speculation about how Sadr obtains information from Manheim and the personal contact information of buyers. According to the Hawthorne Court, the primary problem found with the boilerplate solicitation letters is that “they cause an average reader to believe that their car is in imminent danger” and the solicitation letter in this case “is inflammatory and designed to cause panic in the general population.”

The next hearing is set for June, for approval of the proposed judgment, and a determination of whether the judgment will apply to Sadr individually, or his law firm, or both. It is unclear at this time whether Sadr will appeal.

The question now is: Will Sadr revise his business model in the wake of this judgment? With that kind of liability exposure from just one case, one would hope so, but time will tell.