The 60 MPG Lawsuits
By Bill Moore
While hybrid-electric car owners appear quite happy with their vehicles -- and I am one of them -- not everyone is so pleased. A small number of disappointed buyers have retained the services of California attorney Robert Brennan in an effort to seek compensation for what they believe are misleading claims by Toyota, and most likely Honda, about the published fuel economy ratings of their gasoline-electric hybrids.
EV World decided to contact Brennan and talk to him about these pending lawsuits and why his clients are angry enough to file suit against the maker of a car that has received numerous awards for innovation and breakthrough engineering. For confidentiality reasons, Brennan would not share with me how many people have hired him or about which models they are complaining, but based on our conversation, I think it's safe to assume most of them are 2004 Toyota Prius owners. I also asked Toyota to comment and as of this writing, they have not responded.
Fuel economy lawsuits are not new to the law firm of Brennan, Weiner and Simons of La Crescenta, California. They've successfully litigated over the last six to seven years similar complaints against SUV makers whose official mileage claims, as stated on the "Monroney sticker" on a new car, are also seen as unrealistic exaggerations. Claims of 24 mpg on the highway and 17 in the city turn out to be 12 on the highway and 7 in the city.
"There is a problem not only with hybrid vehicles, but with vehicles in general of severely overstating the available gas mileage on these vehicles," Brennan told me, citing a recent report in the Los Angeles Times where one driver claimed to be getting less than 30 miles per gallon from his hybrid.
According to Brennan, the "Monroney sticker" is a federally-mandated advisory required on all new cars that states the EPA-estimated fuel economy ratings of that particular vehicle. Three numbers are depicted; highway mileage, city mileage and combined. Seldom do these numbers actually reflect real world performance, for many reasons. [See also How the EPA calculates MPG]. The numbers are arrived at using EPA-devised testing guidelines and algorithms, which many contend are seriously flawed and outdated. Critics argue that carmakers like them because it makes their cars appear to be more fuel efficient than they really are.
Brennan contends that mileage testing procedures are a "joke." He claims that automakers don't actually have to test each individual model, but only the engine that goes in a particular series of models. The manufacturers then provide the numbers to the EPA. Whether the EPA actually conducts its own tests to independently verify them is uncertain.
"An auto manufacturer, for instance, is allowed to take... let's say a given engine, put it in any chassis of vehicle and drive it around a track in ideal conditions; I mean no stop lights, no stop-and-go traffic, no excessive heat, a perfect road surface, no potholes, no nothing. They are allowed to drive it around the track and find out how many miles that vehicle went on a gallon of gasoline.
"Basically, what they are doing is rating an engine. They are not rating a car. Now they take that engine and they can put it on different chassis; some chassis may weigh more, some may weigh less. Some chassis may have more wind resistance. In short, that engine may be put in several models of cars."
Ford and General Motors are "notorious," Brennan stated, for putting the same engine in different car lines that are built on the same assembly line. Buick and the now-defunct Oldsmobile line are classic examples of this. Both share common chassis and engines, but often dramatically different body styles. Regardless, if they share the same GM engine, they would have the same mileage numbers on their Monroney stickers, he contended.
But is this practice being followed by Toyota or Honda, I asked?
"They are subject to the same EPA guidelines," he replied. "Whether they independently test each vehicle, I candidly do not know at this point. The cases that I have in the office at this time are in the very, very basic conception of litigation, but they are subject to the same guidelines. So my suspicion is that they are doing the same or something similar."
Gas Prices Trigger Suits
Most owners of gasoline-electric hybrids buy them because they are reputed -- based on the Monroney numbers and numerous press reports that repeat those numbers -- to get twice the fuel economy of comparable non-hybrid, gasoline vehicle. While most industry observers acknowledge that the Prius, for example, represents extraordinarily good value at around $21,000, it is also understood that hybrid technology typically adds about $3,500 or so to the price of a car. Owners are willing to pay the difference if they believe their fuel savings will more than pay for the added cost over the life of the vehicle. When those savings don't appear to materialize, especially when gasoline goes over $2.00 a gallon or higher, they are disappointed, to say the least.
"A lot of people buy these cars for green reasons, which is very admirable. And frankly, I've got to tell you something. I am very happy that Toyota and Honda are taking the lead in creating more green vehicles. That's something I don't disagree with," he commented.
But Brennan also wants potential buyers to know that there can be major discrepancies between what is stated on the Monroney sticker and how the car may actually perform.
As to the suits themselves, they were initiated by individual clients who approached Brennan because of his firm's previous experience with similar complaints from SUV owners. The owners sought legal recourse after getting no satisfaction from either the manufacturer or the dealer from whom they bought the car, he told EV World. At the moment, he has yet to decide whether each case should be pursued individually or as a class-action lawsuit. He is leaving that decision to each client, though he suspects that if enough people start to complain, it could turn into a class action. But for the moment he is counseling that plaintiffs pursue their individual claims.
Fox Guarding the Hen House
If carmakers rely on EPA testing guidelines, then doesn't the agency share some of the blame, I asked?
Brennan responded that now I was getting into a theoretical question about the role of government regulation, which was outside his purview. He did, however, acknowledge that agencies like the US Environmental Protection Agency has the same problem as many other government entities with "revolving door" bureaucracy where officials seem to move freely from industry to government and back, creating what a corrupt situation often referred to as the "fox guarding the hen house." Instead of looking out for citizen interests, they look out for their own self-interests by protecting the interests of previous or future employers.
"What you've got is a situation where those people who are industry insiders are not going to bring the hammer down hard on the industry and make them persistently tell the truth under pain of criminal penalty. Instead, there is mutual back-scratching going on, there is lax regulatory enforcement; and its basically left to private lawsuits. Private lawsuits are the only way in many, many, many instances that private citizens can get any kind of redress, whatsoever."
At the time of our interview, Brennan had not yet filed any suits, but he expects to file his first case within the next six months; and while he isn't aware of any other attorney's who are planning similar actions, he suspects others are or will be shortly as the furor over inflated Monroney numbers gains wider notoriety and more hybrids are introduced and sold.
While he is confident he can win settlements against carmakers for his clients based on his firm's track record with sport utility vehicles, he is less optimistic about anyone or any group taking on the EPA, based on previous legal decisions. However, as the above linked article indicates, the Bluewater Network in California, has initiated just such an action. Other groups have sued the EPA over lax enforcement of pollution laws, so the government can be sued, it's just not where Brennan wants to take his clients or his law firm.
Instead, what is likely to happen is that once Brennan files his complaints against Honda and Toyota, they are going to want to quietly settle out of court. This is what has happened with the SUV cases he's filed.
"They settle them quietly. They don't want it getting out there that the gas mileage claims that are being made on their Monroney stickers are grossly inflated."
Brennan acknowledged that while his clients invariably end up taking the settlement, which can vary from a lump sum of cash to a buy out of the vehicle, plus his firm's expenses, this doesn't solve the problem of erroneous Monroney numbers. He told EV World that he'd like to actually take a case to court.
"I would like to get an injunction in the State of California saying that if you are going to sell vehicles with inflated gas mileage claims, you can do it in the other forty-nine states, but not in California. I think, if we can establish that precedence in California, its going to spread pretty quickly.
"It's Not Rocket Science"
Instead of the current practice of using outmoded guidelines and unfairly biasing the test with near idyllic conditions, Brennan thinks it should be fairly easy to instrument and monitor a small fleet of test vehicles over a wide range of driving conditions, styles and climates to arrive at a more accurate estimate of average fuel economy. Given the computerization now standard on virtually all vehicles, collecting that data would be relatively straight-forward, he believes.
Instead, because of the "fox" is guarding the hen house, "what you get is a lie, and consumers don't like being lied to," Brennan charged.
I asked whether or not he is concerned that these his lawsuits will discourage the introduction and sale of more fuel-efficiency, less polluting hybrids?
No, he answered, pointing out that his successful SUV settlements haven't dampened consumer enthusiasm for these vehicles. He's personally very glad that Toyota and Honda are making a concerted effort to introduce more environmentally-benign vehicles.
"Believe me, and I mean this very sincerely, I am not telling Honda or Toyota or any company that they should not be selling hybrid vehicles, because I am very interested in hybrid vehicles, and I think they are going to be helping a variety of problems in the future.
"If a person has a long commute and buys a vehicle believing he will get sixty miles to the gallon and suddenly he is getting 32 or 34 miles to a gallon, it's going to be upsetting to him on the basis that he's been betrayed but it's also upsetting to him financially. I think Honda and Toyota [and other carmakers] owe the America consumer an honest rendition of what the actual gas mileage is. Let's not be running around telling people, effectively, that these cars can fly when they can't. Let's tell them the truth about the cars."
Carmakers have and will continue to counter that consumers bear much of the responsibility for how a car performs. That's why they always include the YMMV caveat, "You Mileage May Vary."
But Brennan doesn't buy that line, arguing instead that carmakers know very well their numbers are based on "Alice in Wonderland" test scenarios.
I had to ask Brennan whether he'd been hired, either directly or indirectly by any competing carmakers, auto dealerships or industry trade organizations to go after Honda and Toyota.
He replied, "Absolutely not!" Instead he pointed out that he is the Southern California regional director of the National Association of Consumer Advocates.
"To even be a member of the National Association of Consumer Advocates," he responded, "you have to not have any.. basically fiddle or pay... or any connection to industry. Your interests have to be representing consumers."
Because he is only licensed to practice in California, Brennan only represents residents of the state. He refers non-California residents to the NACA web site to find attorneys who are licensed to practice elsewhere in the United States. He added that he is retained on a contingency basis and is remunerated either as a percentage of the settlement or by applying statute law to recover his expenses from the opposing side.
As for the level of compensation or resolution he's looking for, Brennan said that first he wants carmakers -- and he stressed that he isn't picking on Honda or Toyota since both Ford and GM are also planning to roll out hybrids -- "to own up to the fact that they may be financially responsible, at least in California, when they make this type of misrepresentation. And hopefully, if this happens often enough, it will float up to the higher echelons of these corporations who may decide that it's time to do a little change in the way they represent the mileage figures on these cars."
"As a practical matter, do I think my lawsuits are going to effect that change? I am not going to bet on it. But I am going to afford relief to the consumer who come to me who'ave been seriously ripped off by these misrepresentations."
So what are the chances of winning these lawsuits when they materialize?
"I think they are excellent. I just don't think they [carmakers] want any part of a courtroom where it turns out that they've inflated the mileage claims on the cars by thirty, forty, fifty percent. I don't think any jury in the world will accept their explanation that that's the way it's done."
And should Brennan win, it turns out that depending on under what basis the case if filed, carmakers can no longer demand or even ask for a confidentiality clause in the State of California. This was true in the 1990's when he first filed SUV claims, but not any longer.
"If a manufacturer tries to put a confidentiality clause in the settlement agreement, it is void as against public policy. And so there is no confidentiality on these cases."
EV World will continue to follow these cases as they unfold.