Archive for January 2, 2012


Update: January 10, 2012: The Court has ordered both parties back to Small Claims Court for more questions from the judge on January 25, 2012  Here’s the court order:

The court has reviewed the evidence currently before it, including some late-filed papers by the
plaintiff responding to the defendants previous motions.

Before making its decision final the court is concerned about one issue that, in the court‘s
opinion, was not adequately discussed at the hearing on January 3, 2012. This is the possible
effect on the plaintiff’s various theories of relief oft he statutes oflimitations that would be
a
pplicable to her theories.

So that the parties are given an opportunity to comment on this question, among any others they
wish, the matter is removed from submission and reset for further hearing on January 25, 2012,
i
n Department 8 at 1 :30.

Of particular interest to the court is whether, considering the date of purchase of the vehicle, the
pla
intiff is within operative statutes of limitation relating to claims of relief based on Civil Code
1770 et seq., Business & Professions Code 17200 et seq., Business & Professions Code 17500 et
seq .. and common law theories of intentional and negligent misrepresentation. Of further
interest i
s the effect of Code of Civil Procedure 338( d), the discovery rule.

The court is also interested in the parties‘ views of the effect of the presuit notice requirement of
C
ivil Code 1782.

Note that while the parties may be assisted by counsel in asserting their positions, counsel cannot
appe
ar in court nor sign presentations to the court. To that extent, the plaintiffs January 4
objection to the latest document signed by Mr. Peim is sustained, such that detailed consideration
o
f it is prevented. CCP 116.530.

Clerk to give notice.

Update: January 6, 2012: No ruling yet, but one is expected soon. See the video below of Ms. Peters being interviewed after her appearance in Small Claims Court:

Original post from January 2, 2011:

On January 1, 2012, the compensatory limit in Small Claims Court in California was increased from $5,000 to $10,000.  On January 3, 2012, Heather Peters, an owner of a 2006 Honda Civic Hybrid, will face down a non-attorney representative of American Honda Motor Co., Inc. in a closely-watched case of David vs. Goliath.  She is suing for the new maximum of $10,000.

2006 Honda Civic Hybrid

Ms. Peters and tens of thousands of other owners of model year 2003-2009 Honda Civic Hybrids are mad as hell and they aren’t going to take it any longer. For a few years now, five class action lawsuits against Honda have been winding their way through the courts.  The proposed settlement consolidates the cases down to two cases with subclasses:

In the first case, John True, et al. v. American Honda Motor Co., Inc., plaintiffs allege that the fuel economy estimates Honda advertised for the Honda Civic Hybrid could not be achieved under normal driving conditions. Honda has not acknowledged a defect, but they do acknowledge that due to technical problems, the cars get only around 30 mpg, not the 40 city, 42 combined, 45 highway, as advertised.

In the second case, Logan and Anita Lockabey, et al. v American Honda Motor Co., Inc., in addition to complaints similar to True, plaintiffs allege that a July 2010 Software Update to the Integrated Motor Assist (“IMA”) battery system for model years 2006-2008  Civic Hybrids negatively impacted the fuel economy and performance.

The proposed Honda Civic Hybrid Class Action Settlement is pretty paltry.  You get a whopping $100 if you are a member of the True class action and and additional $100 if you are also a member of the Lockabey class and sub-class (the software update).  As a “sweetener,” you get a voucher for either $500 or $1,000 (depending on your class and sub-class) towards the purchase or lease of a new Honda or Acura vehicle.  Some plaintiffs who had to replace their hybrid battery are eligible to be reimbursed for the cost of the replacement and Honda agreed to extend some warranties for a longer period.

Ms. Peters wasn’t happy with $100 in cash and a $500 voucher, so she opted out of the class action and pursued a novel course of action by suing Honda in Small Claims Court in Torrance, CA (the city where Honda has its US headquarters).  She is suing for damages including the “hybrid premium” paid over the price of a standard Civic, increased cost of gas due to getting only 30 mpg and reduced resale value of her car.  She may win up to the court maximum of $10,000 – far more than she would have received under the proposed class action settlement.

2006 Honda Civic Hybrid engine bay

This is a closely-watched case, needless to say.  If she wins, it could open the floodgates to individual small claims lawsuits against not just Honda but any company with class action litigation.   If a company had to defend itself against thousands of smaller suits – in all 50 states and hundreds of county jurisdictions – it could be very costly both in terms of total settlement dollars and human resources.

On the consumer side, a win may force corporations to increase class action settlements with plaintiffs. Perhaps if all the money wasn’t going to the trial attorneys (in the Honda class action, it’s estimated to be $8,474,000), less people would be pissed off enough to take alternative actions.   For example, if Honda had offered the people $1,000 cash plus a $4,000 voucher towards the purchase of a new Honda (and Honda would be required to take the technically-challenged Civic Hybrid in trade), Ms. Peters may not have opted for her more creative option.

In California, neither party is permitted to send an attorney – either in-house or outside council – to represent them in a small claims action.  The plaintiff, Ms. Peters, happens to be a former corporate defense attorney and is permitted to present her own case.  She probably has an edge over the average Civic Hybrid owner, but if she wins, other owners could use her tactics and adapt the evidence she will present to their specific set of facts and circumstances.

2006 Honda Civic Hybrid interior

Ms. Peters is encouraging other Civic Hybrid owners not to settle with Honda.  In a December 27, 2011 LA Times article, The Times estimated that 200,000 Civic Hybrids had been sold during the class action period. And due to resales, the number of people who could be eligible for compensation could be as high as 500,000.  Separately litigating possibly hundreds of thousands of small claims cases is a PR and financial nightmare Honda doesn’t want, but may get.

Even if Ms. Peters doesn’t win her case against Honda, other people who suffered damages could still try the same tactic in their local jurisdiction.  One judicial decision at the small claims level doesn’t necessarily mean the same results will happen in other jurisdictions – win or lose.  I predict this strategy will be used more frequently — much to the dismay of large companies and trial attorneys.

Here’s the press release from DontSettleWithHonda.org:

FOR IMMEDIATE RELEASEDecember 28, 2011 CONTACT: Heather Peters Info@DontSettleWithHonda.org

Viral Small Claims Case Could Sink 5 Class Action Settlements

and Cost Honda $2 Billion

Los Angeles, CA – Honda is on the brink of settling five class action lawsuits alleging false advertising of 50 MPG for its Civic Hybrids for pennies on the dollar, but one small claims case gone viral could change all of that and leave Honda facing liability of $2 billion instead and defending itself in thousands of small claims courts across the nation.

A front page article in the Los Angeles Times used the term “a small-claims flash mob” to describe the filing of a single small claims case against Honda in Torrance, California together with the launch of www.dontsettlewithhonda.org and its associated Twitter and YouTube sites that teach 200,000 other disgruntled Civic Hybrid owners nationwide how to “just say no” to a $100-$200 proposed class action settlement (where lawyers get $8.474 million) and take Honda to small claims court instead, where at least in California, lawyers are not allowed.

Heather Peters will have her day in small claims court on January 3rd and could win up to $10,000 (the new 2012 California small claims limit) in damages including the “hybrid premium” she paid over the sticker price, her increased costs of gas due to getting just 30 MPG and the reduced resale value of her car. It may be the biggest little small claims case that Honda will ever face evidenced by the fact that the Associated Press is sending the same reporter who covered the trials of Conrad Murray, O.J. Simpson and Rodney King. Ms. Peters, a former corporate defense attorney, says:

“Class actions are great for little cases, but not for cases like this where Honda’s false advertising is costing already cash-strapped families more every day at the gas pump. It’s time for Honda to go one on one with its customers where they can’t hide behind high priced lawyers. I want people to know that small claims court is not so scary, it’s a lot like Judge Judy.”

It remains to be seen if the San Diego judge presiding over the five class action lawsuits against Honda for false advertising will approve the proposed settlement on March 16, 2012. A prior proposed settlement was rejected by the court when the Attorney Generals from twenty six states, including California, objected to it as unfair to consumers, and they may object again. Civic Hybrid owners have until February 11th to opt-out, or they can remain in the class and still object to the settlement.

Honda has attempted four different legal maneuvers to postpone the trial of Ms. Peters’ small claims case until after the deadline had passed for Hybrid owners to opt-out of the class action, but the small claims judge said “no” all four times and the trial will proceed as originally scheduled on January 3rd at 1:30 p.m. in Torrance Small Claims Court, Dept. 8, at 825 Maple Ave., Torrance, California. For more info about media access to the courtroom visit http://www.lasuperiorcourt.org/courtnews/ui/main.aspx

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