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American Honda settles suit over oil-burning defect

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By Andrew Thurlow, Crain News Service

DETROIT (Oct. 23, 2013) — American Honda Motor Co. has agreed to settle a class-action lawsuit over claims that it manufactured more than 1.59 million defective vehicles that burn oil excessively and require frequent spark plug replacements.

The settlement concerns all U.S. purchasers and lessees of 2008-12 Accord, 2008-13 Odyssey, 2009-13 Pilot, 2010-11 Accord Crosstour and 2012 Crosstour vehicles equipped with six-cylinder engines that have variable cylinder management. Accord vehicles with four-cylinder engines are excluded from the settlement.

The original suit—filed in March 2012 by plaintiffs Alex Soto and Vince Eagen—claimed the vehicles contained a "systematic design defect that enables oil to enter into the engine's combustion chamber." The alleged defect led to "premature spark plug degradation and engine malfunction," court documents said.

The plaintiffs claimed Honda hid the problem from consumers. The car maker denied the allegation, despite receiving hundreds of online complaints on the National Highway Traffic Safety Administration NHTSA) website, and about 130 on carcomplaints.com concerning the 2008 Accord alone.

Honda later issued a technical service bulletin notifying its technicians to check for the defect. The auto maker did not issue a recall because a safety issue was not discovered.

The majority of complaints allege that Honda said it was normal for a powertrain to burn a quart of oil every 1,000 miles. The suit claimed Honda refused to cover warranties for the vehicles and, instead, instructed customers to check their oil every time they get gas.

Mr. Eagan claims that he had to add a quart of oil to his vehicle each month and had to replace his "prematurely fouled" spark plugs twice within 55,000 miles as a result of oil burning in the cylinders.

Mr. Soto said in court documents that he routinely noticed carbon buildup on his exhaust pipe—a sign that oil, and not just gasoline, is burning in the powertrain.

Honda assured Mr. Soto that this, too, was normal, court documents show.

Dave Sullivan, an analyst at research firm AutoPacific, said that today's emission requirements do not permit engines to burn oil.

"It's too dirty," Mr. Sullivan said. "We're seeing cars go 10,000 miles now between oil changes. If there was a quart for every thousand miles you would need 10 quarts, and most cars don't have that many quarts in them."

Mr. Sullivan said when he changed the oil in his Mazda6 that he may have lost "a cup or two of oil between changes, but that was over 7,500 miles. I think that's a negligible amount. That being said, there's no excuse for a quart every thousand miles."

Mr. Sullivan said the last major episode that involved people complaining about oil burn was with the Mazda RX-8. "Instead of waiting for people to complain, [Mazda] was more proactive and…said 'even if you don't have a problem, you're going to have one so let's just fix it now.'"

Honda declined to comment until after the case is granted final approval.

The settlement was reached after U.S. District Judge Susan Illston declined the defendant's motion to force arbitration on the case in Oct. 2012. The judge found that Honda was a third-party non-signatory to a contract and therefore may not compel arbitration under the terms of the contract.

The preliminary settlement approval was given Oct. 9 by Judge Illston in San Francisco. The final fairness hearing, which is the last step in a class action settlement, is set for March 21.

Under the conditions of the settlement, Honda agreed to extend the powertrain limited warranty for up to eight years after the original sale or lease of the vehicle. Honda also agreed not to oppose the counsel attorney fees as long as they do not exceed more than $800,000. Mr. Eagen is also asking the court to approve an incentive award of no more than $1,000 to compensate him for his time and effort on behalf of the settlement class, according to a copy of the class notice.

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This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.

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