Honda Civic HybridA woman who expected her 2006 Honda Civic Hybrid to be her dream car wants Honda to pay for not delivering the high mileage it promised. But rather than joining other owners in a class-action lawsuit, she is going solo in small claims court, an unusual move that could offer a bigger payout if it doesn't backfire.
Heather Peters says her car never came close to getting the promised 50 miles per gallon, and as its battery deteriorated, it was getting only 30 mpg. She wants Honda to pay for her trouble and the extra money she spent on gas.
Peters, a former lawyer who long ago gave up her bar card, has devised a unique legal vehicle to drive Honda into court — a small claims suit that could cost the company up to $10,000 in her case and every other individual case filed in the same manner.
If other claimants follow her lead, she estimates Honda could be forced to pay $2 billion in damages. No high-priced lawyers are involved and the process is streamlined.
"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."
A win for Peters could encourage others to take this 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, supported by publicity on the Internet and elsewhere, would start a groundswell of such suits. He suggested that few people would want to expend 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 similar Honda hybrid owners when she saw a proposed settlement would give owners no more than $200 cash and a rebate of $500 or $1,000 to purchase a new Honda.
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."
She said she also offered to trade her hybrid for a comparable car with a manual transmission, the only thing she trusted at that point.
"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, and I filed the suit."
She said she also sent emails to top executives at Honda with no response.
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."
He also questioned her criticism of class-action lawyers for the fees they receive. Jacoby, who handles such cases, said lawyers who take on the multiple clients involved do extensive work — sometimes spanning years — and 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."
American Honda's offices were closed for the holidays and no one could be reached for comment. Peters said the company has tried five times to delay the trial but each effort was rebuffed.
The upside of Peters' unusual move, she says, is that litigants are not allowed to have lawyers argue in small claims court in California. This means any award will not be diluted by attorney's fees. Honda would have to appoint a non-lawyer employee to argue its side in court.
"If I prevail and get $10,000, they have 200,000 of these cars out there. That's a potential payout of $2 billion," she said.
While she doubts that all other owners will take the same route, she suggests the penalty could be substantial for the company if a large percentage of the owners file individually.
A judge in San Diego County is due to rule in March on whether to approve Honda's latest class action settlement offer. Members of the class have until Feb. 11 to accept or decline the settlement.
Peters has launched a website, DontSettleWithHonda.org, urging others to take the small claims route.
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