True v. American Honda Motor Co – Case Brief Summary (Federal Court)

In True v. American Honda Motor Co. (2007) 520 F.Supp.2d 1175 , a federal district court considered a preemption argument similar to the one Honda makes here.

The plaintiff in True brought claims under the UCL and the CLRA based on allegedly false and deceptive advertisements by Honda "regarding the fuel efficiency and cost savings of its Honda Civic Hybrid automobile." (True, supra, 520 F.Supp.2d at p. 1178.)

The plaintiff in True challenged certain of Honda's advertisements concerning its Civic Hybrid vehicle. The True court explained the allegations as follows: "During the Class Period, Defendant advertised the HCH with allegedly false statements of its fuel efficiency and the prospective cost savings to the consumer.

The actual fuel efficiency of the HCH is and was up to 53 percent below the mileage per gallon ('MPG') and costs savings that Defendant advertised. ...... Federal law requires that each new HCH display a so-called 'Monroney Sticker' at its point-of-sale, reciting fuel estimates based on methods mandated by the Environmental Protection Agency ('EPA'). ...

While federal law requires that the Monroney Stickers disclaim these estimates with the words, 'actual mileage will vary,' Defendant's print and Internet advertising materials either:

(1) weakened the disclaimer to read, 'actual mileage may vary,' or;

(2) omitted the disclaimer entirely." (True, supra, 520 F.Supp.2d at p. 1178.)

Honda argued that the EPCA preempted the plaintiff's claims. The True court described the requirements of the relevant federal law as follows:

"Section 32908(b) of Title 49, U.S.C., requires automobile manufacturers to display Monroney Stickers, containing certain information, on each vehicle. Further, dealers are required to make available for prospective buyers a booklet containing information on a vehicle's fuel economy. 49 U.S.C. § 32908(c). EPA regulations require that the Monroney Stickers contain the phrase 'your actual mileage will vary depending on how you drive and maintain your vehicle.' 40 C.F.R. § 600.307-08(b)(4)." (True, supra, 520 F.Supp.2d at p. 1181.)

The True court continued:

"Nothing in the EPCA or its accompanying regulations purports to regulate advertising of fuel economy beyond the requirements regarding these stickers and booklets." (True, supra, 520 F.Supp.2d at p. 1181.)

The court went on to explain:

"A reasonable inference exists that Congress intended to preempt State regulation in these two areas, i.e., the labeling of vehicles and the mandated provision of an information booklet. It would be an unreasonable assumption, however, that Congress intended to preempt states from regulating false or misleading advertising of a vehicle's fuel efficiency and cost savings." (Ibid.)

In rejecting Honda's preemption argument, the True court noted Honda's attempt to misstate the plaintiff's claims by "characterizing Plaintiff's complaint as a challenge to EPA testing guidelines . ..." (True, supra, 520 F.Supp.2d at p. 1181.)

The court commented that, if properly described, the plaintiff's complaint "challenged the manner in which Defendant advertised the Honda Civic Hybrid in mediums other than the Monroney Sticker and information booklet." (Ibid.)

The True court explained: "As no clear and manifest Congressional intent to regulate advertising exists, the Court must adhere to the presumption that Congress intended to leave the regulation of false advertising, and unfair business practices of auto manufacturers, to the state. In fact, allowing the States to regulate false advertising and unfair business practices perhaps may further the goals of the EPCA. Accordingly, California's regulation of false advertising does not stand as an 'obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" (True, supra, 520 F.Supp.2d at p. 1181.)