Commentary: Honda Small Claims Winner Fails to Stop Civic Hybrid Class Action

By Jacob Brown | March 16, 2012
Seeing Heather Peters' crusade firsthand as she took on Honda as a former lawyer looking for some parity for her 2006 Honda Civic Hybrid's lackluster fuel economy looked inspiring. As it came out, she was awarded $9,867 in damages for her car's subpar 29 mpg observed average versus its original 50 mpg EPA rating. As she noted in her hearing, Honda had the ability to lower its EPA fuel economy ratings if it felt it couldn't get near its advertised figures, yet the automaker stuck behind its numbers. Today, Peters stood before the Honorable Judge Timothy B. Taylor in federal court as a lawyer representing the interests of approximately 200,000 Honda Civic owners between the 2003 and 2008 model years. Since her winnings, Peters was trying to get the judge to lift the small claims court settlement, which would award Civic Hybrid owners between $100 to $200 apiece and give each of them a voucher toward the purchase of a new Honda or Acura vehicle. Lawyers for the class action suit are set to make $8.5 million. As it turned out, her argument fell on deaf ears, as Judge Taylor said the class action would continue as scheduled as a compromise. "No doubt plaintiffs would have loved to have gotten more; certainly their counsel had every incentive to get as much as possible," he said in a statement. "Honda undoubtedly has many arrows left in its quiver, and certainly would have preferred to pay nothing."
According to the Associated Press, 1,700 people have since opted out of the class action following Peters' February winnings, giving them hope they can win more than what seems like a paltry sum for such a disparity of fuel economy. As a Civic Hybrid originally cost more than $24,000 in 2006 when Peters purchased her vehicle versus approximately $17,000 for a similarly equipped mid-range Civic LX, it would appear she has a case to get the case thrown out in favor of a better settlement for the litigants involved. We're not so sure, though.
If Peters got her way, each of the 200,000 plaintiffs in the small claims hearing would be awarded $10,000, or approximately $2 billion in total. That's approximately one third of the $6.44 billion in net profit Honda had worldwide last year. There's a reason class actions exist: To not bankrupt companies doing business in the U.S. and still give customers a fair shake. Honda isn't without sin. It built an under-engineered vehicle with a battery that even the company admits deteriorates more quickly than it should. That's why it issued the service bulletin that prompted Peters to go in for a computer reflash, which made her car rely less on its hybrid battery and more on the gas engine. Yup, that'd be enough to lower fuel economy. The Honda Civic hybrid's reputation for its relatively lackluster fuel economy was known well before the Peters hearing. Honda could have been more realistic with the car's real-world fuel economy much earlier and not have faced such an assault on its reputation.
But Peters hasn't been without her foibles, either, which will likely soon be brought to light on a much grander stage when her appeals hearing opens next month. Her car has achieved just 29 mpg, but we know nothing of the way she's driven it, and that can make a huge difference. For example, we recently had two different cars from another manufacturer; both had the same engine and EPA fuel economy estimates, but one got more than 37 mpg, while the other got no better than 26 mpg. When automakers say "Your mileage may vary," they're not kidding.
Her car needs to be put on an EPA-certified dynamometer to see if it's actually getting as terrible of gas mileage as she claims. As we've said previously, the current simulated EPA route is based on driving in Los Angeles in the mid-1960s when there were approximately 2.6 million residents, greater use of public transportation, and fewer people in suburbs. Today, there are 3.7 million Los Angeles residents and 15 million people in the metropolitan area. There are also many, many more cars. If she's expecting to meet EPA fuel economy figures in that kind of environment, we're not sure how realistic she is. Lastly, with her reinstatement of her legal practice, she has positioned herself to become a modern-day Erin Brockovich, defending the little guy against the big, evil corporation. But color us a little skeptical. She's selling a CD on her website outlining the documents and procedures she took to beat Honda at the first go-around in small claims court. For $15 apiece. She's also standing out as a high-profile advocate against Honda, making headway in her own case and now in the class action undergoing its final stages today in San Diego. It's a good way to get her name out there—free publicity. When you're essentially a startup lawyer trying to make a name for yourself, singularly representing yourself as the person who took down one of the world's largest automakers is certainly one way to do it. We'll see how it all shakes out at next month's appeal's hearing in Torrance, Calif. You can be assured, as with the rest of Peters' hearings, we'll be there to cover it for you and lend some commentary to the situation. Source: Associated Press via USA Today