It sounds like a lousy class action settlement, though it is possible that it is not as bad as it sounds. This report in the LA Times, about a pending class action settlement on behalf of consumers who bought the Honda Civic Hybrid, raises some eyebrows.
I don’t know anything about the case or the settlement, but a class action for car buyers that gives class members a coupon for purchases on future cars is almost always a problem. If the problem isn’t apparent, here is a stupid question: How often do you buy a new car? Consumers also get cash, but it’s apparently as low as $100 per purchaser.
Lest anyone accuse me of being totally one-sided, it’s worth noting that there are times when cases don’t work for one reason or another, and a modest settlement is appropriate. I doubt this is how the case went because the attorneys for the consumers are getting a large fee, according to the same report. Even so, I am not licensed in California, and I have no information on the case. I haven’t seen the notice or the settlement agreement, so I’m not very informed.
So all this background leads me to Heather Peters, one of the consumers who is not happy with the settlement. Through her website, Ms. Peters is campaigning to get the word out to consumers who are affected by the settlement. She’s also on Twitter here.
Props to Ms. Peters for a few reasons. First, bad class action settlements are a problem. While I still don’t know enough to know about this one, it smells bad from here. More important, Ms. Peters is apparently providing consumers with information about alternatives, including opting out and small claims.
I’m intrigued by Ms. Peters’ campaign. I hope to learn more about the merits of the settlement and whether it’s as bad as it sounds. My guess is that her pioneering use of social media may become a model for future problem class action settlements.
Update: My Twitter pal, George Wallace, aka @foolintheforest, provides helpful California law context here at his Declarations and Exclusions blog. Besides being endlessly amusing on Twitter, George brings his A-game to the world of California insurance law and civil law issues beyond. In the linked post, George asks some compelling questions about things lurking in the shadows of the LA Times report.
Heather Peters says
For more information about the proposed settlement visit the court's website at www.hchsettlement.com where you can find the notice of settlement that is being mailed to the class this week. This is the second attempt at settlement, the last one was rejected by the court after 26 state attorneys general filed a brief arguing that it wasn't good enough. See New York Times coverage here - http://wheels.blogs.nytimes.com/2010/02/26/honda-owners-reject-fuel-economy-settlement/ The California Attorney General has not yet decided if she is going to object again. The hearing is on March 16, 2012.
Michael Freisinger says
Today I received this long detailed class action settlement notice in the mail that says Superior Court of The State of California and for The County of San Diego. The document at first looked official, but as I read further along I question the validity and truthfulness of it with $100 cash payment offer and $1000 coupon off a new Honda/Acura. I own a 2003 Honda Civic Hybrid that has been an exceptional vehicle for me and that my local Honda dealer has been everything they should be. The settlement focuses on dissatisfaction over fuel economy. Obtaining good fuel economy with a Hybrid means driving efficiently and learning how to drive for fuel economy and not speed. I presently get 46mpg over the last 5,000 miles in City driving conditions.
David Sugerman says
My guess is that some of the vehicles do not have problems. If that is true, it may make the settlement more reasonable
Ben Ferreira says
Consider yourself lucky that you have a 2003. My 2006 HCH used to get upwards of 50 mpg on the highway and 45 in the city. After the IMA update I now get closer to 32 mpg in the city (babying it) and my car acts very oddly before it is warmed up (which takes way longer now). This is a serious problem and Honda is hiding it. Worse yet they like to attribute the problems to driving habits so they can transfer blame to the owner.
I've taken it into my local dealership many times and they always act likes it the first time they've heard of the problem. I'll take them for a test drive and show them how unusual it acts, and they'll just say "That does seem a little strange, but it appears to be opperating as normal" even though the car never acted like this before the update. They have essentially changed what is "normal" for the car.
I will be opting out and filing my own suit.
David Sugerman says
Thanks for weighing in, as it's hard to know the extent of the problem. Your experience sounds more like some of the reports I've heard from other consumers. Lousy deal. Best of luck getting relief.
Jerry Poel says
This class action is more B.S. then substance!! Only works for the law firms.... My 2009 HCH is completely satisfactory. The vehicle has maintained an average of 38 MPG in heavy traffic and 44 MPG on the open road in Houston, TX. The battery pack performs as expected with no anomalies. The idle stop ,however, is somewhat erratic and could be improved.
A $100 settlement is asinine and not worth the effort to reply since I doubt I would live long enough to benefit!! If the class action looks like S... and smells like S..., it probably is S...!
David Sugerman says
Thanks for your feedback. My understanding--third hand, admittedly--is that the computer and/or battery problem does not hit every vehicle and that many owners are not having problems. But I've heard from a number of people who had similar mileage that then drop well into the 20's. That's why one of the features--extending the warranty period--is actually a smart part of the package. For those like you who are having no problems, the extended warranty gives you a bit of added protection in the event that problems develop. As long as your system runs clean, it costs Honda nothing. For those who are having problems extending the warranty gives those in need additional benefit.
stephen pustelnik says
Thanks California for adding bite to warranty coverage. I have 94K on my 2007 HCH and it is just beginning to show weird charging habits (fully depleting and recharging multiple times in a single freeway drive cycle) and yes there has been a significant decrease in fuel mileage (43mpg avg to about 39.2 now, same tire brand--michellin xv4 HM, etc.) Hearing the 8yr/80k warranty I was almost floored because I thought it was higher and even with the settlement added time/mileage, I was out. Fortunately, California vehicles (AT-PZEV's) get 10yr/150k mile warranties, but since the reprogram my car is less efficient, more polluting than it was b4 August last year...
The class action is a joke, so is the warranty, the ima battery is a controlled part meaning only American Honda can allow it to be replaced, not the dealers. which they will not do, I purchased my 2007 hch last oct, and only got about 35 mpg, in January I tried to get out of it as the battery would randomly recall and leave the car almost undriveable, no success there, so now, I get on a good day 24 mpg, my battery recalls 8 to 15 times a day and is always charging, never assists at all hardly, every dealer I talk to says this is how the car is designed, and Honda refuses to replace the battery and I still have 48000 miles on the warranty.
And the funny thing is, it wasn't even close to this bad 4 months ago, right about the 85000 mark is when it started getting worse.
I did have one dealer tell me that the battery isn't the problem, it's the software update, and if that's true, that means the hch is over charging the battery, so how long before it explodes? And hurts someone?
Larry Marvin says
In class action lawsuits, the plaintiffs get peanuts, while the lawyers get Filet Mignon. They exist for sleazy law firms to get rich. That said, some of the mileage problem is probably driving habits. However, I did lose about 10% in my MPG after the computer adjustment. Not happy with that, but $100 will help....a little. Some lawyers will be driving BMW's, though!
David Sugerman says
I don't think you understand class actions. They exist because of the disparity in power between large corporations and consumers. The theory is that if a business illegally charges a small amount--say 10 bucks--from each customer, no individual customer will challenge them. If they have a million customres, they've pocketed ten million in illegal charges. When a class action succeeds in that situation, class counsel is representing a million people, so comparing the fees of class counsel to an individual's recovery understates the value by 1/1,000,000. That said, I agree that some class actions are problems--that's why I flagged this one. But let's not presume that all are bad. Otherwise, consumers are left naked.
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