Category Archives: Lockabey v. American Honda

HONDA CIVIC HYBRID OWNER LOSES SMALL CLAIMS APPEAL

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HONDA CIVIC OWNER LOSES SMALL CLAIMS APPEAL

In a recent article I took the position that class action settlements should not include vehicles.  I took this position for several reasons - the unknowing waiver of substantial rights and money damages; lack of counsel to explain complicated settlement notices; etc.  My position arose out of a proposed class action settlement that dealt with the Honda Civic Hybrid and poor fuel mileage.  In the settlement, members of the class would receive nominal monetary compensation or a nominal incentive to purchase another Honda vehicle.  Honda would receive releases of claims for all members of class who did not opt-out of the settlement.

A California woman did opt out of the settlement and sued Honda in small claims court based upon her Honda Civic Hybrid’s poor fuel mileage.  She won a judgment aginst Honda just shy of $10,000.00.  This judgement proved my point that class action lawsuit settlements related to vehicles should not be allowed. 

Honda then appealed the small claims court ruling.  (In California, only a defendant in small claims court may appeal a small claims court decision.)   Honda won the appeal.  (In California a small claims court appeal is heard by one judge in a new hearing.  Attorneys are allowed to represent parties in a small claims appeal, but not in the original small claims case.) 

This appeal decision in no way changes my position regarding the unwiseness of vehicle class action settlements.  The fact that a small claims appeals court ruled in Honda’s favor does not mean that this Honda Civic Hybrid owner or other Honda Civic Hybrid owners have meritless claims.  In fact, the original small claims judge was of the opinion that the plaintiff proved her case and was entitled to damages.

The fact is, the American legal system should not tolerate any legal procedure in which American citizens may unknowingly give up substantial legal rights and large potential monetary damages in exchange for nominal settlement amounts.

For a free personal consultation concerning the California Lemon Law, you may contact David Farrell via phone toll free (866) 360-6886, form or e-mail.

 

HONDA LOSES HYBRID SMALL CLAIMS CASE

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HONDA LOSES HYBRID SMALL CLAIMS CASE

Recently, I wrote an article questioning whether automobile class action lawsuits are good for the consumer.  The article related to a proposed class action settlement concerning Honda Hybrid vehicles.  In a nutshell, I argued that class action lawsuit settlements related to vehicles in which class members give up substantial potential damage claims for minimal damages should not happen.

A recent small claims court decision proves my point.  A woman opted out of the Honda class action settlement and sued Honda on her own in small claims court.  She won the case and the court awarded her just shy of $10,000.00 in damages from Honda.  Had she stayed in the class action settlement, she would have received approximately $100.00 to $200.00.  So I ask the questions – Who does the class action settlement benefit?  Honda? Class Counsel? Class Representative?  Given the amount of the settlement for the class members and the potential damages for individual claims (as evidenced by the small claims award), it is difficult to argue the settlement benefits class members.

Now Honda will undoubtedly appeal the small claims decision.  Honda will be allowed to have counsel represent it in the small claims appeal.  But the fact that a judge ruled in a consumer’s favor on the very claim that is subject to the class action settlement, evidences the negative aspect of class action settlements dealing with automobiles.

It will be interesting to see the outcome of the appeal.

For a free personal consultation concerning the California Lemon Law, you may contact David Farrell via phone toll free (866) 360-6886, form or e-mail.

ARE AUTOMOBILE CLASS ACTION LAWSUITS GOOD FOR THE CONSUMER?

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ARE AUTOMOBILE CLASS ACTION LAWSUITS GOOD FOR THE CONSUMER?

At one time or another, most of us have been involved in a class action lawsuit.  You know the drill. You receive a legal notice in the mail that you are a member of a class that is involved in a lawsuit. If you take the time to read the notice, you will find out after several paragraphs of legal mumbo-jumbo (it’s usually very interesting reading if you like torture) that you are entitled to a coupon or $1.00 or some other nominal amount. Further reading will demonstrate that the class counsel (those attorneys representing you and the class) will receive millions of $$$ in attorney’s fees. If you are still awake after reading that much of the notice, you will finally find out that you are forever bound by the settlement and may not pursue a claim on your own unless you opt out of the class in a timely manner. In most class action lawsuits the individual claims are nominal. Therefore, the consumer is not likely to take the time to pursue a claim on his/her own. And if, in these nominal cases, one fails to read the class action notice, or does not understand the language of the notice, in reality it really doesn’t matter that much because there is not a lot to lose.

But what about a class action lawsuit that involves automobiles and the waiver of substantial legal rights if one is a member of the class? An example (Lockabey v. American Honda Motor Co., Inc.) is currently hashing itself out in a San Diego, California Superior Court. In this class action lawsuit, certain owners of several model years of Honda Civic Hybrids have been named members of a class related to fuel mileage and possibly other issues concerning these vehicle. For those class members who remain in the class, the settlement remedies are dubious to say the lest. These remedies include cash payments of $100.00, rebates of $500.00 for those who are dying to purchase another Honda to replace the defective one, etc. And if one remains in the class, he/she will be forever legally barred from pursuing claims related to the settlement.

The notice for this class action lawsuit is similar for other nominal damage class action lawsuits. But the stakes and potential loss for class members are much, much higher.  Individual members of this class action lawsuit could have thousands of $$$ in personal claims under several legal theories – California Lemon Law; False advertising; Federal Lemon Law; California Consumer Legal Remedies Act; etc.

So is it appropriate to bound automobile owners in a class action lawsuit when individual members may be unknowingly waiving substantial damage claims? I think not for several reasons. First, a class action notice as in the San Diego Honda case does not provide adequate legal notice to the class members as to what rights they may be waiving.  Second, the class notice may not even be read by the class member for several reasons including, but not limited – lost, thrown away, never received, etc. Third, the general members of the class are not represented by counsel. Before any American consumer gives up substantial legal rights in a class action setting, at the very least that consumer should be given access to free counsel paid for by class counsel and/or the defendant(s) to advise the consumer what specific legal rights are being released.

But perhaps the best solution for consumers in class action lawsuits such as the San Diego Honda case is to require class members to opt-in to the lawsuit rather than opt-out. In other words, the consumer would have to take a specific, knowing action in order to be bound by the terms of the class action settlement. Then there would be no doubt that those that opt-in will be ready, willing and able to accept the consequences of being a member of the class.

If you would like more information concerning the California Lemon Law, you may contact David J. Farrell via phone toll free (866) 360-6886, form or e-mail. You may also fax documents to Mr. Farrell at (949) 305-7775.  Mr. Farrell will be happy to provide you with a free consultation.