The Lemon Law Blog

This is an update on the class actions this and other law firms have filed against Michelin and Honda concerning the "PAX" run-flat tires on the 2005-2007 Honda Odyssey Touring minivans and certain Acura RL models.

The cases involve Michelin's "PAX" run-flat tire system consisting of a special tire, support ring, wheel and tire presssure monitoring system. The PAX Systems have proven to be a disaster for consumers--the tires wear prematurely and replacements, which only available from Honda and Michelin dealers, are very expensive costing as much as $300 per tire. Many owners had a great deal of difficulty even finding a Honda or Michelin dealer that had the special equipment needed to replace a PAX tire.

In November 2007, Michelin announced it was throwing in the towel on the PAX System. According to a report in the trade presss, Michelin said it was ending research on PAX "because there is no big market development." Of course, this is a euphemistic way of saying the PAX system has been a failure.

The federal class actions have now been reassigned to a federal judge in the District of Maryland. A separate California state court action is pending in the Alameda County Superior Court on behalf of California owners.

Posted by Mark F. Anderson | Permalink | Email This Post

Posted In: Auto Class Actions

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The National Highway Safety Administration ("NHTSA") is the agency that is supposed to regulate auto manufacturers to improve highway safety. For many years, however, the agency has done little or nothing to ensure highway safety; its actions are more in tune with protecting the auto industry than the public. For example, some years ago, the agency failured to warn consumers that Firestone tires on 1991 to 2001 Ford Explorers were prone to blow out and cause roll-over accidents.

Reacting to that failure, in 2000, Congress enacted a law to address the agency's failure to spot safety-related defects in cars, trucks, and tires. The law, known as the Transportation, Recall Enchancement, Accountability, and Documentation Act ("TREAD") directed the NHTSA to report all consumer complaints, warranty payments, and field reports in the event of an injury or death involving a vehicle or tire defect.

However, for years NHTSA did nothing and then made things worse when it enacted regulations to gut the new law. The regulations allow the auto manufacturers to make the data confidential and unavailable to the public. No good reason exists except to protect the auto industry.

The agency has taken other steps to shut out the public and safety advocates from obtaining information on auto safety. The agency formerly had a public library with a great deal of information essential for evaluating the agency's activities. However, in 2006, the agency shut down the library for all practical purposes.

Continuing with its trend to secrecy, NHTSA will not allow journalists to interview the agency's safety experts, which is contrary to the practice going back 20 years. Chris Jensen of the NY Times covered this topic in the NY Times auto blog.

Posted by Mark F. Anderson | Permalink | Email This Post

Posted In: Auto Safety

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Car dealers in California increasingly have arbitration clauses buried in their sales contracts that preclude buyers from going to court. Under these clauses, any disputes are channeled to arbitration forums, principally the National Arbitration Forum (NAF) and the arbitrator's findings are binding. If the consumer loses, he or she cannot reject the award and go to court. This system is not to be confused with such organizations as the Better Business Bureau that provides arbitration in lemon law cases. Under the BBB rules, if the consumer does not like the results, he or she may still file a lawsuit. In that way, the consumer does not give up the right to hire a lawyer and have the case heard by a jury.

That consumers who sign the contracts with binding arbitration clauses unwittingly are foregoing their right to a jury trial is bad enough, but the NAF and similar arbitration forums are, to put it mildly, unfair to consumers. A California law requires these forums to information on who wins these proceedings. The nonprofit group Public Citizen analyzed the NAF data and found that California consumers lost 94% of some 19,000 cases! One arbitrator handled 68 cases in a single day. There is no in-person hearing. Arbitrators who rule for consumers are soon dropped by NAF.

Consumer horror stories involving NAF are common. Mother Jones magazine covered this story in some depth in an article in November 2007.

Other arbitration forums such as the American Arbitration Association are almost as bad for consumers as NAF. Taking a dispute to AAA is quite expensive (especially when it comes to paying the arbitrator). The arbitrators favor the big corporations knowing they won't be chosen for future arbitrations (more fees) if they rule for the consumers.

The car dealers want no part of arbitration when it comes to fighting with the manufacturers over their franchise rights. In 2002, the dealers succeeded in getting Congress to enact a law banning binding arbitration clauses in the dealers' sales and service contracts with the auto manufacturers!

Posted by Mark F. Anderson | Permalink | Email This Post

Posted In: Buying New Cars

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