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Will ruling spur more suits over hybrids?

A small-claims court rules that the carmaker misled the owner of a hybrid Honda Civic about fuel economy -- possibly setting a precedent for other disgruntled consumers.

By Giselle Smith Feb 2, 2012 4:51PM

Honda owner Heather Peters has won her David-vs.-Goliath lawsuit against the automaker in a California small claims court. Her suit charged that the carmaker misled her about the expected gas mileage of her 2006 Honda Civic Hybrid -- and the judge agreed.


Opting out of a class-action lawsuit against Honda over the hybrid's less-than-advertised fuel efficiency, Peters instead filed a claim for $10,000 (the maximum allowed in small claims court under California law) in Torrance, Calif., where American Honda Motor Co. has its West Coast headquarters. Post continues below.

The well-publicized Jan. 3 trial was followed by a second court appearance Jan. 25, where dozens of Honda owners packed the small courtroom, the Los Angeles Times reported.

 

Peters said Honda advertised that her car would get about 50 miles per gallon, but it never got more than 42 mpg -- and that dropped to less than 30 mpg after a software update. In court, Honda representative Neil Schmidt countered that mileage estimates posted in the windows at car lots are not invented by carmakers but come from the Environmental Protection Agency -- and that dealers are required to post them by law.


At the second hearing, Los Angeles Superior Court Commissioner Douglas Carnahan said he would issue his judgment, possibly in a week. The Associated Press broke the news to Peters on Wednesday that she had been awarded $9,867.


"Wow! Fantastic. I am absolutely thrilled," she responded.


"At a bare minimum Honda was aware . . . that by the time Peters bought her car there were problems with its living up to its advertised mileage," Carnahan wrote in his judgment. The judge said Honda did not commit "intentional fraud" but awarded the settlement for extra fuel costs, the decreased value of the car and the cost of its battery, the AP reported.

 

"It is a victory for Civic Hybrid owners and consumers everywhere," Peters told the Los Angeles Times.


Small case with big implications

Although Peters had said at one point that $10,000 was far less than actual damages in the case, her win has implications beyond the financial settlement. Her case could set a precedent for dissatisfied consumers to use a small claims court to get around class-action lawsuits.

 

The proposed class-action lawsuit settlement (which Peters opted out of) over the vehicle's fuel economy would give owners of 2003-2008 Civic hybrids up to $200 (or as little as $100) each, in addition to rebate coupons should they opt to purchase a new car, and would give trial lawyers $8.5 million.


Peters' case could also cost Honda a lot of money, the AP said. 

Peters had hoped to inspire a flood of small-claims lawsuits by the other 200,000 people whose Honda Civic hybrids are covered by the proposed settlement. If all 200,000 owners sued and won in small claims court, she said, it could Honda Motor Co. $2 billion.
Peters said she has been contacted by hundreds of other hybrid owners. Her website, DontSettleWithHonda, details her case and offers step-by-step advice for other owners to opt out of the class-action suit and take the small-claims route. There, 352 comments have been posted, mostly from other Honda owners and supporters.

She also has 258 followers on her dontsettlewithH Twitter account, where she tweeted this morning, "It's official -- I won $9,867.19! Big justice comes in small packages!"

A Honda representative said today that the company would file an appeal. A former attorney, Peters told the Times she is planning to reactivate her California law license so she can represent other Honda owners.


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