SAN DIEGO – A judge approved a settlement Friday to give owners of Honda Civic hybrids up to $200 each over claims that the fuel economy of the cars was inflated, casting aside arguments that a motorist's victory in small claims court entitled other owners to a larger award.
Superior Court Judge Timothy Taylor said the essence of a settlement is compromise.
"No doubt plaintiffs would have loved to have gotten more. Certainly their counsel had every incentive to get as much as possible," he said. "Honda undoubtedly has many arrows left in its quiver, and certainly would have preferred to pay nothing."
Taylor listened to nearly two hours of arguments before ruling.
The case gained widespread attention after a Los Angeles woman won a $9,867 judgment last month against Honda in small claims court -- a ruling that is under appeal by the carmaker. Plaintiff Heather Peters opted out of the class action so she could try to claim a larger damage award for her the failure of her 2006 Civic to deliver the 50 mpg that was promised.
The judge said Peters' legal victory carried little weight.
Peters, who recently reinstated her law license, said Friday that she was disappointed but not surprised at Taylor's ruling.
The judge got testy with her last month when she tried to address him at a hearing, saying he had not yet received confirmation that her license was renewed. His patience also wore thin when California and four other states briefly considered objecting to the settlement after Peters' victory.
The judge was visibly irritated with Peters again Friday when she complained about difficulty reviewing documents under the court's outdated paper filing system.
"Do you really want me to get into that, Ms. Peters?" the judge asked.
The judge went on to say Peters recently "disrupted" his courtroom to gain access to the docket. To accommodate her, he said he ordered that a copy of the voluminous documents be made available for public viewing.
Peters told reporters after the hearing that she was focused on arguing Honda's appeal of her small-claims award on April 13.
"I'm certainly disappointed, but we're proud to have stood up," she said.
The settlement pays owners of about 200,000 Honda Civics from model years 2003 to 2009 between $100 and $200, plus a rebate toward the purchase of a new Honda. Owners of models from 2006 to 2008 get the larger amount due to additional claims over battery defects.
The judge has valued the settlement at $170 million. Attorneys for the plaintiffs have pegged the value between $87.5 million and $461.3 million, depending largely on how many people accept rebates of up to $1,500.
The judge approved more than $8 million in plaintiff attorneys fees in his 43-page ruling.
Peters' win in small claims court was a unique end run around the class action process, which typically give small payments to consumers. In small claims court, there are no attorneys' fees, cases are decided quickly, and individual payments are far greater.
Nicholas Chimicles, one of the plaintiff attorneys, expressed concern that consumers were being falsely led to believe the small claims court was "nirvana." Honda said it has won five of the six small claims over the hybrids since January, with Peters dealing its only defeat.
Chimicles, who billed $675 to $750 an hour for his work on the case, told the judge that the new converts to the small claims venue were "akin to following the Pied Piper over the precipice."
More than 1,700 Honda owners opted out of the settlement. Some believed consumers should be paid more. Others complained the attorney fees were too high.
Kathy Proya of Toronto, Ohio, called the settlement a "travesty of justice," saying it enriches lawyers while only covering a fraction of the loss from the 208,000 miles she logged on her 2005 Civic. Christian Matthews of El Cerrito, Calif., equated Honda Motor Co. to "a con man, swindler or a thief."
Still, the judge noted, many objectors were sympathetic to the automaker and satisfied with the car's performance. Clancy Hughes, a physician in Homer, Alaska, said the complaints "seem spurious."
American Honda Motor Co., the Japanese automaker's U.S. subsidiary, could have backed out because more than 1,500 owners opted out, but it embraced the agreement.
"Honda is pleased with the court's approval of this settlement as a fair resolution for our customers that demonstrates our desire to preserve our good relationship with Civic Hybrid owners who chose to participate in this class action," a company statement read.