Honda loses Small Claims Court suit over Civic hybrid fuel economy

The owner of a Honda Civic hybrid won an unusual Small Claims Court lawsuit Wednesday against the auto giant that some legal experts believe could change strategies for both Small Claims Court and class-action litigation.

A Los Angeles County court commissioner ruled that American Honda Motor Co. negligently misled Civic owner Heather Peters when it claimed the hybrid could achieve as much as 50 miles per gallon.

Court Commissioner Douglas Carnahan, who mailed his 26-page decision to Peters and Honda, awarded her $9,867.19 in damages. That is close to the maximum $10,000 allowed in Small Claims Court that the Los Angeles resident was seeking. The Times obtained a copy of the decision.

“It is a victory for Civic Hybrid owners and consumers everywhere,” said Peters, a former lawyer. “Sometimes big justice comes in small packages.”

Her award was far greater than the damages she would have collected had she signed onto a class-action-lawsuit settlement over similar claims against Honda.

Peters sued Honda after learning that the proposed settlement covering her 2006 vehicle would pay trial lawyers $8.5 million while Civic hybrid owners would get as little as $100 and rebate coupons for the purchase of a new car.

Despite her victory, Peters may have a tough time collecting any money from the automaker.

“We disagree with the judgment rendered in this case, and we plan to appeal the decision,” Honda said.

In taking the case to Los Angeles County Superior Court, the company will be allowed to bring in its army of lawyers to try to overturn the small-claims judgment.

Even so, Peters’ win was “amazing” and could affect litigation strategy in California and other states that don’t allow lawyers to represent either side in Small Claims Court, said Donald Earl Childress III, who teaches civil procedure at Pepperdine University School of Law.

“The fact that she won says that well-informed plaintiffs who forsake a class-action settlement and decide to take things into their own hands in the correct way may be vindicated in Small Claims Court,” he said. “You need one person to stand up and get the win, and then other people will do it too.”

Honda and other companies now will have to decide whether they should settle similar cases or appeal the ruling to force such claims back into the class-action litigation process, where the companies can use legal staff and have more leverage, Childress said.

Peters argued that Honda advertised that the car would get about 50 mpg, but “the car never got more than 41 or 42 even on its very best day.” She said the fuel economy dropped below 30 mpg after a software update intended to prolong the life of the car’s battery and improve performance was installed.

She decided to file the case in Small Claims Court to prevent Honda from bringing a highly paid legal team to the battle. California law — and statutes in some other states — prohibits companies from using lawyers to mount a defense in Small Claims Court.

Honda defended itself by contending that Peters’ low fuel mileage numbers resulted from the way she drives or how she maintains her Civic. Honda sold about 200,000 of the hybrids over a six-year period.

Carnahan said the nearly three hours of testimony over two days was the longest Small Claims Court case he has handled.

Honda has acknowledged that the battery on the 2006 through 2008 Civic hybrids “may deteriorate and eventually fail” earlier than expected. When the battery pack can’t be charged to full capacity, the car relies more on the gas engine and fuel economy suffers.

Peters wants other Civic hybrid owners to file suits against Honda in various small claims courts across the state, making the automaker fight a multi-front legal battle in which it would be unable to bring its legal forces to bear.

She said more than 500 owners have contacted her through her website, DontSettleWithHonda.org, which explains how Peters filed her lawsuit against the automaker.

Peters said she planned to reactivate her state law license so that she can represent other Civic owners in litigation against Honda.

jerry.hirsch@latimes.com