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Honda fuel case ruling this week

2012-01-04 08:46

TILTING AT HONDA: Heather Peters or Torreance, California, says her Honda Civic hybrid doesn't get the claimed fuel economy so wants redress. Her test case could cost Honda billions of dollars. Image: AP



TORRANCE, California - A Los Angeles woman who expected her hybrid Honda Civic to be a low fuel-consumption machine wants the automaker to pay for it not delivering the sub-five litres/100km she believes she was promised.

Heather Peters appeared in a small claims court in this small Californian town where Honda has its West Coast headquarters on Tuesday to put forward her case. The judge is expected to deliver a decision this week; if the ruling is in Peters' favour the Honda can expect a landslide of claims; given that Peters is claiming $10 000, the bill could run into billions.


Peters, rather than being one of thousands of Civic Hybrid owners in a class-action lawsuit from the successful conclusion of which the prosecuting lawyers will take the sharks' share of the payout, she took her personal case Tuesday to the small claims court.

Experts said Peters has a better chance of winning there, with its more relaxed standards and "no entry" sign for lawyers, and could get a payout many times higher than the few hundred dollars offered to class-action plaintiffs.

She's been contacted by hundreds of owners who also want to take their chances with small-claims, where there are no lawyers' fees and cases are decided quickly.

"If I prevail and get $10 000, they have 200 000 of these cars out there," Peters said.

Peters, a state employee and former lawyer, argued in court that Honda knew her car wouldn't get the 4.7 litres/100km advertised. As her 2006 vehicle's battery deteriorated over time, it barely got eight litres/100km.


Neil Schmidt, a technical expert for Honda, called Peters' $10 000 claim excessive. He said the US federal government had required Honda to post the best fuel economy figure the car could achieve but said fuel consumption would vary depending on how the car was driven - open road or in stop/go traffic.

Peters said she would not have bought the car had she known that.

"The sales force said 50 miles (80km) per (US) gallon but they didn't say if you run your air-conditioning and you remain in stop/go traffic you're going to get 29 to 30 miles per gallon," she said. "If they had, I would have b bought the regular Civic."

Honda, however, said Peters never contacted Honda to complain or express any concern about her vehicle's fuel consumption until she sent a letter in late November, 2011, and then filed her suit soon afterwards.

"Once the suit was filed," the automaker said, "Honda immediately offered to inspect her vehicle and work with her on the findings but those offers were rejected."


The company did not believe Peters was deceived. "The window sticker attached to her vehicle (as required by federal law) clearly indicated that her mileage would vary depending on driving conditions, options, vehicle condition and other factors," the statement added.

Peters did not immediately respond to an emailed request for comment on Honda's statement but if she wins here claim and other Civic owners follow her lead, she estimates Honda could be forced to pay as much as $2-billion in reparations.

Experts say there are many up sides to Peters' unusual move.

Richard Cupp, who teaches product-liability law at Pepperdine University, said: "I would not be surprised if she wins. The judge will have a lot of discretion and the evidentiary standards are relaxed in a small-claims court."

Such courts generally handle private disputes that do not involve large amounts of money. In many states, that means small debts, quarrels between tenants and landlords and contract disagreements. Lawyers aren't usually there; in California, litigants aren't allowed to have lawyers argue their case.


A victory for Peters could encourage others to take the same simplified route, he said. "There's an old saying among lawyers," Cupp said. "If you want real justice, go to small-claims court."

But he questioned whether her move would start a groundswell of similar cases. He suggested that few people would want to spend the time and energy that Peters has put into her suit when the potential payoff is as little as a few thousand dollars.

Peters opted out of a series of class-action lawsuits filed on behalf of Honda hybrid owners over the cars' fuel economy when she saw a proposed settlement would give plaintiffs no more than $200 cash and a rebate of $500 or $1000 on a replacement new Honda.

Honda sold about 200 000 of the cars during the period covered by the settlement.

The class-action settlement, Peters said, would give trial lawyers $8.5-million.


"I was shocked," she said. "I wrote to Honda and said I would take $7500, then the limit on small claims in California. It is going up to $10 000 in 2012." Typical limits in other states range from $2500 to $15 000.

"I wrote the letter and I said 'If you don't respond, I will file a suit in small-claims cour'. I gave them my phone number," she said. "They never called."

She also sent emails to top executives at Honda but got no response. She filed legal papers seeking reimbursement for the difference in the purchase price of the hybrid and the extra money she spent on petrol.

Aaron Jacoby, a Los Angeles lawyer who heads the automotive industry group at the Arent Fox law firm, said Peters' strategy, while intriguing, was unlikely to change the course of class-action litigation.

"In the class action, the potential claimants don't have to do anything," Jacoby said. "It's designed to be an efficient way for a court to handle multiple claims of the same type."


Jacoby also defended the size of lawyers' fees in such settlements, saying class-action lawyers did extensive work that involved many clients and sometimes lasted for years - and added they were not in it just for money.

"They're representing the underdog and they believe they are performing a public duty," he postulated. "Many of these people could not get lawyers to represent them individually."

Superior Court Commissioner Douglas Carnahan issued no ruling in Peters' case on Tuesday but his staff said he would rule this week. Class-action cases almost always take years to resolve.

A judge in San Diego County is due to rule in March on whether to approve Honda's class-action settlement offer for hybrid owners.

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