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.

 

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.

Leave a Reply

Your email address will not be published.