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Honda Civic lawsuit parties ponder strategies for next round

February 02, 2012|By Jerry Hirsch
  • Honda owner Heather Peters sits in her 2006 Honda Civic Hybrid during a press conference before making her case in small claims court at Los Angeles Superior Court Torrance Courthouse Annex.
Honda owner Heather Peters sits in her 2006 Honda Civic Hybrid during a press… (Allen J. Schaben / Los Angeles…)

This post has been corrected. See the note at the bottom for details.

There’s a chess game afoot involving three distinct parties in the Honda Civic hybrid Small Claims Court case.

Each will try to figure out what the nearly $10,000 award to Civic owner Heather Peters of Los Angeles means to its interests and will then map out a strategy.

Trial attorneys have issued statements attempting to shore up support for a class-action litigation settlement between other Civic hybrid owners and the automaker that would pay the lawyers $8.5 million.

DOCUMENTS: Read ruling in Honda Civic lawsuit

Honda plans to kick the case up to a Superior Court where it can use its legal staff to defend itself in a new trial. Attorneys can’t represent parties to Small Claims Court lawsuits in California and some other states.

Peters is preparing for that expected new trial and trying to get other owners to opt out of the class-action settlement and file their own lawsuits in Small Claims Court.

Peters was awarded almost $10,000 in damages Wednesday after proving in a Small Claims Court in Torrance that Honda misled her when it advertised the fuel economy for her 2006 model-year sedan.

Attorneys for the class-action plaintiffs said their clients -- about 30,000 current and former Civic hybrid owners have elected to participate -- got a good deal. Owners can still opt out, but they face a Feb. 11 deadline to do so. 

The settlement covers original and subsequent owners of 2003 through 2009 model-year Civic hybrids. Each owner would get $100 in cash and either a $500 transferable voucher, which they could sell, or a $1,000 non-transferable voucher for a rebate on a new Honda or Acura.

Owners of the 2006 through 2008 hybrids would get an additional $100 and an additional $500 rebate voucher that they could use or sell. Other benefits include an extra year of battery warranty and the option to seek greater damages through a mediation service.

William H. Anderson, a Washington, D.C., class-action attorney involved in the settlement, pointed out in a statement that Peters is a former attorney who “has formal legal training and litigation experience” that helped her pursue the lawsuit.

Even so, Peters still might lose her award in the next trial.

Of course, Anderson's risk is that Civic owners will file objections to the settlement. A previous deal was scuttled after a different judge ruled that it didn’t provide enough in damages and paid attorneys too much.

A flood of disgruntled owners, especially if they again get the support of a group of state attorneys general who objected the first time, could petition the San Diego court to ditch this offer too. Peters said she hopes that's what will happen. And she believes her $10,000 award will embolden other owners to object.

Anderson said in his statement that “the proposed settlement has potential advantages over Small Claims Court. If they remain in the settlement, class members who purchased the same car as Ms. Peters can take advantage of a built-in alternative dispute resolution process, which unlike Small Claims Court has no limit of what the class members can recover.”

He also noted that the proposed settlement provides “guaranteed benefits to any of the nearly 500,000 class members who are eligible to submit a proof of claim without any additional requirements,” a far lower hurdle than litigating in any courtroom, even Small Claims Court.

American Honda Motor Co. said it will push the lawsuit to Los Angeles Superior Court, where it will be heard again.  Although technically not an appeal -- Honda isn’t going to try to prove a flaw with the case -- functionally the maneuver has the same effect as an appeal. 

Honda would be freed from some of the restrictions of Small Claims Court. For example, it could use attorneys to defend its marketing of the vehicle in a new trial.

Honda isn’t talking about the case, but its hard line indicates that it believes it has far more than $10,000 at risk. It could see the negotiated class-action settlement unravel and face paying more for a new settlement or for a full-blown trial against savvy trial attorneys representing the claimants.

It might also want to discourage other owners from taking the Small Claims Court route because it could not use its legal staff to defend itself in such cases and would have to send non-attorney representatives to many far-flung courts.

For the record, 1:05 p.m., Feb. 3: A previous version of this post said that Honda could use evidentiary procedures such as discovery and depositions when the Honda Civic case is appealed to Superior Court. That is incorrect. California Code of Civil Procedure section 116.770, subdivision (b) says, “The hearing on an appeal to the superior court shall be conducted informally. The pretrial discovery procedures described in Section 2019.010 are not permitted, no party has a right to a trial by jury.”

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