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Honda Settles Civic Hybrid Mileage Suit

26 attorneys general object to terms of settlement

By Jon Hood
ConsumerAffairs.com

December 16, 2009

The suit's lead plaintiffs, John True and Gonzalo Delgado, brought the suit in 2007 after trying in vain to achieve the car's advertised mileage -- 51 miles per gallon on the highway and 49 in the city. Despite his best efforts over 6,000 miles of road, True averaged a mere 31 miles per gallon in mixed highway/city driving. The suit was brought as a class action on behalf of owners of 2003-2008 Civic Hybrids, totaling nearly 120,000.

In settling the case, Honda denies any wrongdoing, noting that the estimates were calculated by the Environmental Protection Agency (EPA), and that Honda didn't violate any regulations in its advertising.

The recently-announced settlement offers consumers some recourse, but may also have some hidden benefits for Honda. Under the agreement, eligible Civic Hybrid owners will receive a coupon for $1,000 off a new Honda, but the coupon can't be applied to the company's most fuel-efficient cars, including new Civic Hybrids. It also can't be used for a certified used car or transferred to anyone, meaning that the only person who can use the coupon is the eligible Civic Hybrid owner. Finally, to use the coupon, the class member must trade in or sell her Civic Hybrid.

If the class member doesn't want to get rid of her Civic, she is entitled to a $500 coupon toward a new Honda. The same restrictions apply, but this coupon can be transferred to "immediate family." Finally, those who don't want a new Honda at all are eligible to receive $100, but they must first prove that they complained to Honda about their car's fuel economy.

And in what seems like a not-so-subtle jab at those who brought the suit, Honda is offering every class member a DVD counseling them on how to receive better fuel economy.

True will receive $12,500 and Delgado $10,000. Lead plaintiffs commonly receive a larger award than members of the class due to the time they spend helping class counsel prepare for and, if necessary, litigate, the case.

The attorneys general of 26 states, led by Texas Attorney General Greg Abbott, have objected to the settlement, arguing that it is not "fair, adequate, or reasonable" as required by the Federal Rules of Civil Procedure for class action settlements. The objecting attorneys general specifically note that the coupons exclude high-mileage vehicles -- those that class members would be most apt to buy. The attorneys also point out that the coupons "are worth only a fraction of the price of the original car," as 2010 Civic Hybrid prices start at over $23,000.

U.S. District Judge Virginia A. Phillips of California, who gave preliminary approval to the settlement, will consider the objections before deciding whether to issue a final approval.

Whatever the merits of the settlement, the suit has produced collateral benefits: the EPA revised its estimates for all cars, starting with the 2008 model year, in order to avoid the confusion encountered by True and Delgado. Under those revised figures, Civic Hybrid owners are told to expect 45 miles per gallon on the highway and 40 in the city.

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