Honda is defending five separate class action lawsuits in various California state courts. The false advertising suits allege that Honda misrepresented the fuel economy of its Honda Civic Hybrid model automobiles sold during 2003-2009. Honda advertised that its Civic Hybrid got approximately 50 miles per gallon (MPG) when in fact it got around 30. I find it more than a little ironic that Civic Hybrid’s current website prominently says 30 MPG (even though that refers to a customizable display and not to the current model’s MPG which Honda claims to be around 40). Not only did the 2003-2009 Hybrid Civics not deliver the gas mileage performance promised by Honda, but then in July 2010 Honda released a software update to address the gas mileage problem in its 2006-2008 Hybrid Civic models, which update apparently exacerbated the problem instead.
Honda set up a website with information for members of the Class. The website was last updated on October 17, 2011 and states, “[i]f you purchased or leased a Honda Civic Hybrid model year 2003 through 2009, you are a member of the Settlement Class and you may be entitled to a cash payment and other benefits.” The proposed settlement is explained in a 6 page Notice issued by the Honorable Timothy B. Taylor of the Superior Court of the State of California in San Diego on October 3, 2011. The Notice requires all members of the Class to opt-out by February 11, 2012 or they will automatically be included in the settlement.
The terms of the settlement are:
(1) Cash payments of $100 to each person who bought a Honda Civic Hybrid between 2003-2009 (with an additional $100 going to those who purchased the car during 2006, 2007 or 2008), plus;
(2) A $1,000 non-transferable rebate certificate on a new Honda or Acura or a $500 fully transferable rebate (with an additional $500 going to those who purchased the car during 2006, 2007 or 2008).
According to an article in LA Times, Heather Peters is one of the unlucky folks who purchased a 2006 Honda Civic Hybrid. Peters was as disappointed with the low gas mileage as she was with the low compensation offered under the class action settlement — pennies on the dollar — so she opted-out of the class action suit and instead filed a California small claims suit. According to the LA Times article, only non-attorney employees may represent companies in small claims court in California, which levels the playing field between Peters and Honda. California small claims awards may be up to $10,000 in damages, far more than the $100 Peters could receive in the class action settlement. Peters seeks damages for the “hybrid premium” she paid, her increased gasoline costs due to getting just 30 MPG and the reduced resale value of her car, which could well be in the $10,000 range.
Peters didn’t just file a small claims suit against Honda, however. She also launched a website (DontSettleWithHonda.com) to help others opt-out of the class action suit and learn how to file their own small claims action. In big red letters on the homepage of the site, it states: LAWYER’S GET $8,474,000.00! On December 28, 2011 Don’tSettleWithHonda.org issued a press release announcing the time and location of Heather Peter’s January 3, 2012 court date against Honda. If her case is successful, Peters’ hopes it will cause others to opt-out of the class action settlement and instead file their own small claims suits.
There’s a big disparity between the amount sought in legal fees and the amounts awarded to the Class members (save the lead plaintiffs who each get between $5,000 – $12,500). I know these attorneys take on huge financial burdens and risk to bring these cases, but how “successful” is a case when the majority of class members get pennies on the dollar?