by Monica Goyal
Rather than accept the $100-200 settlement offered from a class action suit against Honda, Heather Peters decided to sue Honda in Small Claims Court for $10,000.
She claims that the Honda Civic Hybrid she purchased did not achieve the full 50 miles per gallon that was advertised. Instead, it got more like 30 miles per gallon – and she’s not alone. Hundreds of other Honda owners are making similar claims. There are several things that make this case quite interesting:
- This case has totally gone viral. Peters has been featured on CNN and Fox News, and in the Washington Post and New York Times. She has been discussed on Twitter and has generated a lot of bad publicity for Honda. How did she do it, by leveraging the Internet, visit her site Dontsettlewithhonda.org, and social media.
- Is this the 21st century class action? Peters is subverting the traditional class action process for one with a greater payout. According to her site, those who choose to join the class action lawsuit would only receive $100 to $200, while lawyers would make up to $8,474,000. This is what traditionally happens in class actions; the amount each individual receives is small, although the amount the company pays out may be large. Peters’ website outlines how one can opt out of the class action lawsuit and start their own Small Claims case. She suggests that they negotiate with lawyers to get a larger settlement – larger than the $100 offered to them in the class action. 500 Honda owners have contacted Peters to date. However, unlike Peters, who is trained as a lawyer, others are not likely to be interested in investing the time needed to start their own action against Honda.
- Changes to Small Claims – Another thing that makes this case interesting is the change to the Small Claims rules in California, which increased the claimable limit to $10,000 in January 2012. Small Claims Court generally tends to have simpler court procedures than the higher level of courts, thus making it easier to self-represent themselves, thus supporting Peters’ position to go fight the case yourself. Interestingly, in California, Honda must provide one of their own employees (who could not be a lawyer!) to represent the company. It is in this context that Peters’ idea works.
Last Wednesday, the Judge in this case ruled that Honda was aware its Civics did not live up to their advertised mileage and Peters was awarded $9,867. Peters claimed this win as a “victory for Honda Civic owners everywhere.” She plans to renew her legal license to help other Honda owners wishing to take Honda to Small Claims court like she did. Honda disagrees with the ruling of this case and plans to appeal the judge’s decision.
For an overview of the facts in this case, as well as an update on the latest developments, please see this article from CBS News. You may also wish to visit Peters’ site, DontSettleWithHondo.org, which urges others to take their complaints to Small Claims Court. As of Tuesday, Peters says that there are more that 500 Honda owners, including some from Australia, who have contacted her. They are all interested in following her lead.
It will be interesting to see how this case pans out and what the implications will be for class actions and whether it will start a trend to litigating with social media.