Brian's Blog, Federal Court Rejects Honda's Effort to Force Auto Safety Class Action Into Arbitration

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Lawsuits > Class Actions

 

Businesses these days will go to great lengths to force their customers into arbitration and deny them access to the civil justice system. Sometimes that extends to trying to enforce an arbitration agreement that the customer is not a party to; other times, that extends to trying to enforce an arbitration agreement that the company is not a party to.

That's what the car company Honda tried to pull off in Soto v. American Honda Motor Co., C-12-1377-SI (N.D. Cal.). In Soto, the plaintiffs' class-action complaint alleged in great detail that

Honda's 2008, 2009, and 2010 Honda Accord vehicles ... suffer from a systemic design defect that enables oil to enter into the engine’s combustion chamber. This defect is present when the vehicles are sold and manifests prior to the expiration of the Class Vehicles’ warranty periods, causing excessive oil consumption, premature spark plug degradation, and engine malfunction.

One of the named plaintiffs in Soto had signed an installment sale contract with a dealership, San Leandro Honda, which assigned its rights in the contract to American Honda Finance Corp., Inc. The installment sale contract contained a mandatory arbitration clause, and so American Honda Motor Corporation -- the maker of the allegedly defective cars -- tried to force the case into arbitration. That is, Honda tried to bar its customers' access to the courts regarding claims that Honda's cars are defective on the basis of an arbitration clause in a contract with another entity concerning the financing of the car's purchase.

Federal judge Susan Illston rejected Honda's argument in this no-nonsense opinion.

After Judge Illston ruled, Clarence Ditlow, the head of the Center for Auto Safety, wrote a letterto Honda, urging it to deal with its customers more fairly. The last paragraph of the letter sums it up:

When Honda makes a defective vehicle, it should use it engineers to build a better vehicle not its lawyers to find a legal loophole to avoid responsibility. Some more defects for Honda engineers to work on include the notorious power lumbar support on 2009-12 Accords, automatic transmissions on 2000-04 Accords, Civics and Odysseys and excess brake wear on 2008-10 Accords. CAS has brought these defects to Honda’s attention with no response. As a group that frequently praises Honda for its advances in auto safety, it saddens us to see Honda fall back on quality and responsibility.


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