Tuesday, January 13, 2009
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C.A. Allows Suit Challenging Hybrid Fuel Economy Claims
By STEVEN M. ELLIS, Staff Writer
The Fourth District Court of Appeal ruled yesterday that a San Diego County man can proceed with a suit accusing Honda of deceptive advertising over the automaker’s claims about the gas mileage of its Civic Hybrid.
Ruling that the man raised triable issues of fact with respect to the veracity of Honda’s assertions in a brochure that purchasers need not drive the vehicle any differently than a conventional automobile to achieve advertised fuel economy, and that federal law did not preempt his claims, the court reversed a grant of summary judgment in the manufacturer’s favor.
Gaetano Paduano purchased a new 2004 Honda Civic Hybrid in June 2004, but filed suit the following year after achieving only approximately half of the Environmental Protection Agency’s fuel economy estimate disclosed on the federally mandated new car label.
The label indicated the vehicle had received an EPA rating of 47 miles per gallon for city driving and 48 mpg for highway driving.
After Paduano was informed by a service employee at a Honda dealership that driving conditions affect the fuel efficiency of hybrid vehicles more than that of conventional vehicles, and that his Civic Hybrid could achieve higher fuel efficiency only if he significantly altered his driving habits, he requested that Honda repurchase the vehicle from him, but the automaker declined.
Paduano then brought suit under state and federal law for breach of warranty and deceptive advertising, citing statements in a brochure produced by Honda directing customers to “drive the Hybrid like you would a conventional car and save on fuel bills.”
However, San Diego Superior Court Judge Jay M. Bloom granted summary judgment for Honda, holding that the federal Energy Policy and Conservation Act preempted Paduano’s claims, and that there was no evidence the vehicle suffered from any defect that would cause it to attain poor mileage.
On appeal, Justice Cynthia Aaron wrote that the trial court had correctly concluded that Paduano failed to present any evidence suggesting his relatively low gas mileage was the result of a mechanical defect in the vehicle.
But she rejected Bloom’s holding that the federal Energy Policy and Conservation Act of 1975 preempted Paduano’s deceptive advertising claims under California’s Consumer Legal Remedies Act and Unfair Competition Law, and opined that a factfinder could determine that Honda’s statements in the brochure constituted misrepresentations or were misleading to the public.
Honda claimed the statement about conventional cars was limited by context to refer only to the fact that the Hybrid did not have to be plugged in to an electrical source, but Aaron said the statement was “at best, ambiguous,” and faulted the automaker for presenting “no evidence to demonstrate that the claims in its brochure could not mislead a reasonable person, as a matter of law.”
She similarly concluded that Paduano’s state law claims were not preempted because “[e]nforcement of the UCL and/or CLRA in this case would not in any way ‘relate to’ the imposition of minimum fuel efficiency performance standards on Honda or other vehicle manufacturers for a class, subclass, or fleet of vehicles,” which is prohibited by federal law.
Aaron explained:
“Contrary to Honda’s characterization of Paduano’s UCL and CLRA claims, Paduano is not claiming that disclosing the EPA mileage estimates is, by itself, deceptive. Rather, Paduano maintains that Honda has voluntarily made additional assertions, beyond the disclosure of the mileage estimates, that are untrue or misleading, and that federal law does not require, or even address, these additional assertions….
“Here, neither the UCL nor the CLRA is a law that is based ‘on’ disclosure of fuel economy or fuel operating costs; rather, the UCL and CLRA are both laws of general application that create a duty not to deceive….Thus, the phrase ‘on disclosure of fuel economy or fuel operating costs’…cannot be construed to encompass the general duty not to make fraudulent or misleading statements.”
Justice Judith L. Haller joined Aaron in her opinion, but Justice Terry B. O’Rourke dissented from Aaron’s conclusion that Paduano’s deceptive advertising claims were not preempted, writing that the claims were “necessarily predicated” on Honda’s representations about fuel economy and the vehicle’s asserted failure to meet EPA fuel economy estimates.
“As I understand the claims…, Paduano seeks to impose a legal duty on Honda to change its disclosures concerning fuel economy to something different from the EPA estimate,” he wrote “In such a case…the EPCA expressly preempt[s] enforcement of his UCL and CLRA causes of action.”
O’Rourke further opined that the court did not need to reach the question of federal preemption, because summary judgment was appropriate on the grounds that “the so-called advertising statements relied upon by the majority were not alleged in Paduano’s complaint, and as a matter of law are not false or misleading, being—at best—nothing more than nonactionable puffery.”
The case is Paduano v. American Honda Motor Company, Inc., 09 S.O.S. 230.
Copyright 2009, Metropolitan News Company