Product Misrepresentation: How California Law Protects Consumers
February 28, 2012 By Allen, Flatt, Ballidis & Leslie, Inc.
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A Southern California woman recently made headlines after she personally sued Honda in small claims court when her car failed to live up to promise mileage standards, resulting in financially injurious consequences for her. The woman, Heather Peters, was awarded $9,867 from the small claims court judge and is encouraging others to follow her lead in making claims against Honda. A lawyer examines her case and explains the laws protecting consumers from product misrepresentation.
The Honda Civic Problem
A Southern California women recently decided to personally take action against Honda after their Civic Hybrid failed to live up to promised fuel economy standards, resulting in financially injurious consequences for her, explains a lawyer. In her claim against Honda, brought in Los Angeles small claims court, Helen Peters alleged that when she purchased her vehicle, Honda knew their car was not living up to its advertised fuel economy standards and yet continued to advertise those standards anyway.
Because of Honda's false advertising, Civic Owners such as Helen Peters paid more for the vehicles and did not receive the promised reduction in gas costs. This led to actual financial loss for Peters and countless other individuals who were misled. Many of those who were lied to by Honda became part of a class action. However, Helen Peters decided to opt out of the class. She did so because she was not satisfied with the proposed settlement, which would have provided her with only a few hundred dollars in cash. Instead, she believed she could prove the case herself in small claims court.
Legal Grounds against Honda
Companies are not permitted to make false claims about the products that they advertise. A number of consumer protection laws exist both on the federal level and the state level that protect consumers from dishonest, unfair and predatory advertising tactics. For instance, while the Federal Trade Commission (FTC) helps to enforce guidelines and protect consumers on a federal level, California also has its own laws that consumers can invoke when taking action.
In this particular case against Honda, Peters had four different legal grounds under California state law upon which she could bring a private lawsuit against the car maker.
One of the potential grounds for her cause of action, for example, is called the Consumers Legal Remedies Act. Found in Civil Code section 1770, the Consumer Legal Remedies Act allows consumers to take action against manufacturers or sellers who engage in deceptive practices. Deceptive practices prohibited by the Act include representing that goods or services have characteristics or benefits that they do not (Cal Civ. Code section 17709(a)(5)); and/or representing that goods or services are of a particular standard, quality or grade when they are not (Cal Civ. Code section 17709(a)(7)).
In Civil Code section 1770, the Consumer Legal Remedies Act states that anyone who suffers damage as a result of a prohibited practice can bring a civil action for an injunction to stop the prohibited practices; as well as for actual damages, restitution of property, punitive damages, and/or other damages the court deems appropriate.
Peters could also have brought her claim under the California False Advertising law found in Business and Professional code 17500; the California unfair competition law found in Business and Professional Code section 17200.
Peters, however, instead relied largely on misrepresentation. Misrepresentation is a common law tort within the state, which means that the elements of the tort are mostly set by case law, although California has defined fraud and addressed certain aspects of negligent misrepresentation claims in California Civil Code section 1709-10 and 1571-72.
According to the California rules, a plaintiff who wishes to prove misrepresentation must show that the defendant represented that an important fact was true when it was not. Further, the defendant must not have had reasonable grounds to believe the truth of the misrepresentation at the time, and the defendant must have expected the plaintiff to rely on it. The plaintiff must have actually relied on it, and—largely because of that reliance—must have suffered harm.
The Small Claims Case
Heather Peters provided evidence to the California small claims court including past magazine articles showing the claims made by Honda, which it was reasonable for her to rely on. She also presented proof that the car did not live up to the hype, and that she personally suffered financially injurious consequences as a result, explains a lawyer.
Peters was able to successfully prove her claim, convincing the judge that it was clear Honda knew at the time they made the promises on fuel economy that the car could not live up to them. As such, the judge indicated that an award of damages was appropriate. This award had to remain within the $10,000 maximum limit for cases in small claims court, since Peters had brought a small claims action.
The judge, in issuing an opinion, did make clear that the opinion was not precedential. This means that further plaintiffs who may wish to file similar lawsuits against Honda may not use the judge's decision or statement against Honda even though his statement indicated that Honda knew their claims could not be true.
The small claims court decision could also be overturned if Honda invokes their right to have their case heard by the Superior Court in Los Angeles, California.
ABOUT THE AUTHOR: Jim Ballidis
Practicing with the California law firm Allen, Flatt, Ballidis, and Leslie for more than 25 years, author and lawyer James Ballidis has written extensively on issues concerning civil law, including the personal injury claims process.
Copyright Allen, Flatt, Ballidis & Leslie, Inc.
More information about Allen, Flatt, Ballidis & Leslie, Inc.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
A Southern California women recently decided to personally take action against Honda after their Civic Hybrid failed to live up to promised fuel economy standards, resulting in financially injurious consequences for her, explains a lawyer. In her claim against Honda, brought in Los Angeles small claims court, Helen Peters alleged that when she purchased her vehicle, Honda knew their car was not living up to its advertised fuel economy standards and yet continued to advertise those standards anyway.
Because of Honda's false advertising, Civic Owners such as Helen Peters paid more for the vehicles and did not receive the promised reduction in gas costs. This led to actual financial loss for Peters and countless other individuals who were misled. Many of those who were lied to by Honda became part of a class action. However, Helen Peters decided to opt out of the class. She did so because she was not satisfied with the proposed settlement, which would have provided her with only a few hundred dollars in cash. Instead, she believed she could prove the case herself in small claims court.
Legal Grounds against Honda
Companies are not permitted to make false claims about the products that they advertise. A number of consumer protection laws exist both on the federal level and the state level that protect consumers from dishonest, unfair and predatory advertising tactics. For instance, while the Federal Trade Commission (FTC) helps to enforce guidelines and protect consumers on a federal level, California also has its own laws that consumers can invoke when taking action.
In this particular case against Honda, Peters had four different legal grounds under California state law upon which she could bring a private lawsuit against the car maker.
One of the potential grounds for her cause of action, for example, is called the Consumers Legal Remedies Act. Found in Civil Code section 1770, the Consumer Legal Remedies Act allows consumers to take action against manufacturers or sellers who engage in deceptive practices. Deceptive practices prohibited by the Act include representing that goods or services have characteristics or benefits that they do not (Cal Civ. Code section 17709(a)(5)); and/or representing that goods or services are of a particular standard, quality or grade when they are not (Cal Civ. Code section 17709(a)(7)).
In Civil Code section 1770, the Consumer Legal Remedies Act states that anyone who suffers damage as a result of a prohibited practice can bring a civil action for an injunction to stop the prohibited practices; as well as for actual damages, restitution of property, punitive damages, and/or other damages the court deems appropriate.
Peters could also have brought her claim under the California False Advertising law found in Business and Professional code 17500; the California unfair competition law found in Business and Professional Code section 17200.
Peters, however, instead relied largely on misrepresentation. Misrepresentation is a common law tort within the state, which means that the elements of the tort are mostly set by case law, although California has defined fraud and addressed certain aspects of negligent misrepresentation claims in California Civil Code section 1709-10 and 1571-72.
According to the California rules, a plaintiff who wishes to prove misrepresentation must show that the defendant represented that an important fact was true when it was not. Further, the defendant must not have had reasonable grounds to believe the truth of the misrepresentation at the time, and the defendant must have expected the plaintiff to rely on it. The plaintiff must have actually relied on it, and—largely because of that reliance—must have suffered harm.
The Small Claims Case
Heather Peters provided evidence to the California small claims court including past magazine articles showing the claims made by Honda, which it was reasonable for her to rely on. She also presented proof that the car did not live up to the hype, and that she personally suffered financially injurious consequences as a result, explains a lawyer.
Peters was able to successfully prove her claim, convincing the judge that it was clear Honda knew at the time they made the promises on fuel economy that the car could not live up to them. As such, the judge indicated that an award of damages was appropriate. This award had to remain within the $10,000 maximum limit for cases in small claims court, since Peters had brought a small claims action.
The judge, in issuing an opinion, did make clear that the opinion was not precedential. This means that further plaintiffs who may wish to file similar lawsuits against Honda may not use the judge's decision or statement against Honda even though his statement indicated that Honda knew their claims could not be true.
The small claims court decision could also be overturned if Honda invokes their right to have their case heard by the Superior Court in Los Angeles, California.
ABOUT THE AUTHOR: Jim Ballidis
Practicing with the California law firm Allen, Flatt, Ballidis, and Leslie for more than 25 years, author and lawyer James Ballidis has written extensively on issues concerning civil law, including the personal injury claims process.
Copyright Allen, Flatt, Ballidis & Leslie, Inc.
More information about Allen, Flatt, Ballidis & Leslie, Inc.
View all articles published by Allen, Flatt, Ballidis & Leslie, Inc.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
