Woman sues Honda in unlikely place: small claims

[January 04, 2012]  TORRANCE, Calif. (AP) -- A Los Angeles woman who expected her hybrid Honda Civic to be a high-mileage machine wants the automaker to pay for not delivering the 50 mpg it promised. But rather than being one of thousands in a class-action lawsuit, she took her case Tuesday to small-claims court.

Experts said Heather Peters has a better chance of winning her case in a court with more relaxed standards and could get a payout many times higher than the few hundred dollars offered to class-action plaintiffs.

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

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

Peters, a state employee and ex-lawyer, argued that Honda knew her car wouldn't get the 50 mpg as advertised before a judge in Torrance, where American Honda Motor Co. has its West Coast headquarters. As her 2006 vehicle's battery deteriorated over time, it barely got 30 mpg, she said.

Neil Schmidt, a technical expert for Honda, called Peters' $10,000 claim excessive for her 2006 Civic Hybrid. He said the federal government had required Honda to post the highest mileage the car could get, but said the mileage varies depending on how the car is driven -- for instance, if it gets stuck often in stop-and-go traffic.

Peters said she would have never purchased the car if she had known that.

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

Peters never contacted Honda to complain or express any concern about her vehicle's fuel economy until she sent a letter in late November 2011 and then filed her suit shortly thereafter, Honda said in a statement Tuesday.

In response, Peters said she did not write to Honda's corporate offices sooner because she was repeatedly told by Honda dealers that the company had a strict policy not to replace batteries until the dashboard warning light was lit.

In a statement, the company also said that it offered to inspect her vehicle and work with her on the findings, but those offers were rejected. Peters called that claim "absolutely false."

The company also said it did not believe Peters was deceived. "The window sticker that was 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 said.

But if Peters wins, and other Civic owners follow her lead, she estimates Honda could be forced to pay as much as $2 billion in damages.

Experts say there are many upsides to Peters' unusual move.

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

Small claims 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. Attorneys 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 $1,000 to purchase a new Honda. Honda sold about 200,000 of the cars over the period covered by the settlement.

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

"I was shocked," she said. "I wrote to Honda and said I would take $7,500, which was then the limit on small claims in California. It is going up to $10,000 in 2012."

Typical limits in other states range from $2,500 to $15,000.

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

She said 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 gas.

Aaron Jacoby, a Los Angeles attorney who heads the automotive industry group at the Arent Fox law firm, said Peters' strategy, while intriguing, is 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 do extensive work that involves many clients and sometimes spans years.

And they are not in it just for money.

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

Superior Court Commissioner Douglas Carnahan issued no immediate ruling in Peters' case Tuesday, but his staff said he would rule this week. Civil 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. Members of the class have until Feb. 11 to accept or decline the deal.

Peters has launched a website, DontSettleWithHonda.org, urging others to take their complaints to small-claims court. She said Tuesday that more than 500 other Honda owners, including some who live in Australia, contacted her and want to follow her lead.

[Associated Press; By LINDA DEUTSCH]

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