Archive for 2014

Home Archive for 2014

Money to Burn?

The New York Times is reporting that Hyundai - Kia have been fined $100 million by the US EPA and Justice Department for falsified mileage data numbers. More on that breaking news here -

http://tinyurl.com/KiaHyundai100MFines

This comes on the heels of Hyundai-Kia's purchase of land for $10 billion on which to build their new headquarters building, a price equal to over $18,000 per square foot - a move many called extravagant for the car building conglomerate.

Floating in cash, the US fines seem huge and tiny at the same time.

Is it all about the profit?

UPDATE - in addition to the $100 million fine, Automotive News is reporting that in the settlement Hyundai and Kia also agreed "spend $50 million to establish an independent fuel economy certification group and forfeit some 4.75 million greenhouse gas emission credits the companies have banked under the EPA’s tailpipe emissions regulations -- estimated to be worth more than $200 million." Those EPA "credits" are estimated to have a cash value of about $45 per credit currently.

That makes the Hyunda - Kia - EPA settlement worth about $350 million total. Still only a fraction of the $10 billion the cash-rich car companies spent on the land (alone) for their new HQ.

For over two years some 13 vehicle models' fuel ratings were overstated. The fuel ratings of an economy car model are commonly known to be one of the primary marketing and advertising tactics used by motor vehicle manufacturers to attract buyers.

While the manufacturers were still defending the way they calculated their mpg numbers that they reported to the federal government, Automotive News also reported that Hyundai and Kia used “cherry-picked” data and conducted testing in ways “that did not reflect good engineering judgement” that ultimately led to artificially high fuel economy ratings for most of its lineup at the time in question, according to the DOJ’s statement.

It just goes to show you that when big corporations have millions of dollars at stake, they are not shy about fudging the numbers if it means big bucks in ill-gotten profits and stealing customers from the other competing auto makers.

Burdge Law Office

www.BurdgeLaw.com

Helping Consumers Protect Themselves, Everyday

Arbitration sucks, we've said it before and we'll say it again. Arbitration sucks.

But whatever you think about it, in Ohio a binding mandatory arbitration clause can not be used to take away a consumer's rights under Ohio's Udap law, the Ohio Consumer Sales Practices Act. Still, more and more arbitration clauses are trying to not only take away a consumer's right to go to court, but to also change the laws they can use.

Ohio's Udap law, the CSPA, makes it illegal for any merchant to do anything that is "unfair or deceptive" (the words in the law) to a consumer. And if they do, then the consumer may be able to recover triple their actual damages, attorney fees, and up to $5,000 in non economic damages for aggravation and inconvenience, etc. Car dealers hate this law.

Its no wonder then that Autos Direct, a Cleveland area internet-based car dealer, was sticking mandatory and binding arbitration clauses in its sales paperwork with consumers. But it went one step further and added a sentence that said "The non-prevailing party shall pay, and the arbitrators shall award the prevailing party's arbitration costs and expenses, including reasonable attorney's fees." Lawyers call that a "loser pays" clause and it means that if you are going to sue the car dealer then you sure better win or they might go after you to make you pay their attorney fees. But that's not what the the law in Ohio says.

In other words, car dealers like Autos Direct not only wanted you to not be able to go into a courtroom where the public can find out what they did to you, but they also didn't want you to be able to use consumer protection laws against them at all. Ah, c'mon, guys, don't you think that's a little too much?

Well the Eighth District Court of Appeals thought so, when it decided Tamara Hedeen v Autos Direct Online, Inc. on Sept 25, 2014, and tossed out their arb clause.

Attorney Beth Wells, with Burdge Law Office in Dayton, Ohio, reports that the appellate court ruled that "where a consumer's CSPA (Ohio's Udap law) claim is subject to binding arbitration, limitations on a consumer's right should not be allowed by a private arbitration forum." A couple of pages later in the court decision, the appellate judges threw out the arbitration clause entirely and held that Ms Hedeen now has the right to go to court.

In Hadeen's case, the court noted, she had bought a used 2011 Mercedes online for $28,000 and later discovered that it had sustained over $20,000 in undisclosed damage and over $7,000 of the damage had never been repaired. It's things like that which explain why some car dealers don't want consumers to go to court at all. Hadeen filed her case against the dealership with claims that they had committed unfair and deceptive acts in violation of Ohio's Udap law and Ohio's little-known Motor Vehicle Sales Rule, OAC 109:4-3-109.

A public court, where the public can see what is happening in our Justice system - that's what Justice should be all about. A Big Round of Applause to Attorney Beth Wells on a job well done.

Burdge Law Office
www.BurdgeLaw.com
Helping Consumers Get Justice, Everyday

Chrysler says it is investigating electronic problems in its cars that could affect millions of its most popular cars and trucks and minivans, according to USA Today reporter James Healey.

The investigation, you can bet, is being mirrored by government safety regulators, quietly looking at the same and more complaints about electronic problems, including engine stalling complaints. Federal safety investigators at NHTSA start their safety investigations low and slow, often going unnoticed by the media. But you can bet Chrysler is watching carefully.

The Center for Auto Safety, a consumer watchdog group, filed a petition requesting federal safety investigators take a close look at the numerous consumer-owner complaints that they say are linked to the Chrysler "total integraed power module" that controls a vehicle's computer "brain." Chrysler has said that it had an investigation already underway but has not said when it actually started. That date could be a clue on when the quantity of complaints rose to a level that caught Chrysler's attention.

Apparently there are hundreds of complaints and some say the vehicle can quit running, leaving the operator facing a dangerous traffic situation that can cause an accident or injury to the driver or other drivers.

Apparently power windows, theft alarms, even the ignition system could be affected by a faulty TIPM module, raising a risk of stalling that can kill the engine and shut off power assist to steering and braking systems. USA Today reports that in some models it can disable the airbag systems too.

No doubt about it, this can be a deadly defect. If your Chrysler vehicle has any electronic problem at all, don't take a chance. Get it in to your dealer immediately. If they stall you, ask them point blank if your problem can lead to stalling. If you get a run around, then demand they give you a loaner.

You don't want to be driving a stalling Chrysler on the highway.

Remember, in Ohio a dealer only gets one chance to fix a deadly defect. The second time it happens, you've got a lemon. And when you get a lemon, you are entitled to your money back or a replacement. Who knows - maybe they'll fix it in time for the replacement they build you.

Burdge Law Office

www.OhioLemonLaw.com

Helping consumers get rid of lemon cars and trucks for more than 25 years

Side impact crashes injure more often

In 2007 the federal safety agency in charge of setting safety standards for motor vehicles sold in the US, the National Highway Traffic Safety Administration (NHTSA), wanted to protect passengers from side crashes into things like utility poles and trees so they set a new standard for side impact crash protection.

That's because over the last 20 years frontal crashes have gone down while side impact crashes have increased by more than 20%.

Like most new vehicle safety standards, it was argued about and fought over before it finally became law. One of the compromises in the process was that the new law would would not begin to take effect for 3 years and that complete phase-in compliance would not be required for 7 years. So motor vehicle manufacturers had up to 7 years to redesign their cars to add greater side impact protection and comply with the new law.

Are they too busy making money to build safe cars?

The law was passed in 2007 and was to be complied with by September 1, 2014. Plenty of time to get the job done, right?

So all the manufacturers started working on it and now they all comply. Except one.

Aston Martin, who apparently has been busy building and selling their expensive sports cars, has filed a request to postpone their convertible car model compliance for another 2 and 3 years. And their reason for the requested extension? Being unable to sell the soft-top cars would reduce their new car gross profits.

Buy a 2014 Aston Martin DB9 for just $214,000

The Aston Martin DB9, which carries a $214,000 MSRP, won't comply with federal safety standards until August 2016. The Aston Martin Vantage, with its paltry $126,000 MSRP, won't comply until August 2017.

Meanwhile, Aston Martin saw a 2013 sales jump of 11%, so the cash is certainly flowing.

The world's 8 top auto makers complied with the new safety standard and none of them saw their sales jump 11% in 2013 but Aston Martin did.

Will Money Buy NHTSA's forgiveness?

GM had a 2013 sales drop of 6.3% but it has complied with the new safety standard. VW had a whopping 2013 sales drop of 22.7% but it complied. Hyundai and Kia dropped 2% but they complied. Toyota dropped 1.7% but they complied.

Ford sales only increased by 1.8% but they complied. Honda scrapped by with a 1.9% increase but they complied. Chrysler sales increased 6% and they complied and Nissan, with an increase of 10.5%, complied too.

NHTSA should not reward Aston Martin for its decision to make more money instead of complying with a federal safety standard that they saw coming 7 years ago. They had 7 years to get around to it and instead focused on the almighty buck and big bucks at that. Aston Martin has no excuse. They do make beautiful sports cars, sure. And expensive ones, too. Let's hope that money is not what makes the safety decision at NHTSA on this.

Burdge Law Office

www.BurdgeLaw.com

Helping consumers get rid of lemons for more than 25 years.

It's what we do.

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