IN THE NEWS: CAN DAVID BEAT GOLIATH IN SMALL CLAIMS COURT?

A  recent pair of  California lawsuits has caught the attention of the whole country because –at least at first glance — each case presents an irresistible tale of triumph in a battle between the little guy and the giant.

In the first, Heather Peters, a California Honda  owner, opted out of a pending class action suit against the car company based on alleged defects and misleading promotions regarding its Civic Hybrid model.  If Ms. Peters  had not opted out, she might have become eligible, eventually, to receive a few hundred dollars in cash and some  vouchers toward the purchase a new Honda.  This was the settlement that had tentatively been approved for each of roughly 200,000 plaintiffs  in the class action suit.

Heather, who had paid thousands more for the hybrid versionl of her Civic, , thought this was not enough to  compensate her for her losses.  Instead, she brought her  own small claims suit against the car company.  She won the case and was awarded $9,867 in damages. This was just shy of the maximum allowable award in small claims court under California Law — $10,000.

The second recent small claims success story to make national news was smaller but no less impressive.  This one, too, was brought in Californiat where Matt  Spaccarelli, a man who had purchased an unlimited data plan as part of his cellphone deal with AT&T, found that his service had been “throttled”  — slowed to a crawl once his usage reached a certain arbitrary level.  He, too, won his case and was awarded $850 by the small claims court.  Not exactly a life-changing sum, but enough to buy a bit more phone service and, more importantly, to send a message that unlimited data should mean just that — unlimited.

If only that were the end of the story.  Unlike Connecticut, California allows appeals from the judgment of small claims courts.  According to the AP,  At&T announced its intention to appeal  Mr. Spaccarelli’s judgment as soon as the  ruling was handed down.  Ditto for Honda when Ms. Peters won her case.

So, with no appeal option in Connecticut, could it work more smoothly here?  Not exactly.  While Connecticut does not allow appeals from small claims judgments, it does provide an option whereby defendants sued in small claims court may file a motion to transfer their case to the regular Superior Court docket before it ever gets heard.  Not only does this restore the option for appeal but it also slows down the process considerably and opens up the possibility of trial by jury which makes prosecution more difficult for non-lawyers.

On the other hand, as these two cases demonstrate, pursuing legitimate consumer complaints through the small claims process can catch the attention of the consuming public and of the offending company and thus exert pressure for reform.  Sometimes it can even result in a simple victory.

In the Honda case, the plaintiff  happened to be a retired lawyer.  This undoubtedly came in handy in strategic planning. Ms. Peters was prepared with plenty of admissible evidence to prove her claims regarding  gas mileage  and had even lined up a witness described as a Honda whistleblower.

Ms Peters helped along the publicity buzz that grew out of the case by publicizing it before the hearing.  This drew coverage from a variety of far-reaching media including NPR, Fox News, USA Today, The Los Angeles Times and more. She also launched a web site to encourage other affected Honda Civic owners to follow her lead by opting out of the class action and filing suit on their own. Ms. Peters even re-activated her law license in order to help other plaintiffs prosecute their cases.

How this will turn out for Ms. Peters and for other Honda owners who did not opt out  by the February 2012 deadline remains to be seen, but one thing is certain — Ms. Peters managed to deliver a stinging public relations blow to the company that will sap some of the sweetness from the otherwise stunningly favorable settlement  they had so far achieved in the class action suit.

The effect of Mr. Spaccarelli’s small claims  win on other AT&T subscribers will be less dramatic. This is because, as part of its subscriber contract, AT&T precludes both class action lawsuit and  individual suits in courts of general jurisdicion by its customers — a clause previously upheld by the Supreme Court, according to Boston.com.

Still, depending on the amount of publicity the case generates, this could theoretically be a double-edged sword for AT&T since it has, itself, ruled out the opportunity to deal efficiently with large numbers of claims in the context of class action litigation or to play hardball by moving cases out of small claims.  From the point of view of the consumer, though, this means that AT&T has less incentive than Honda to fight individual cases commenced in small claims courts — potentially good news for consumers.

For those who opt to pursue their consumer complaints through the small claims system,  it is worth noting that rules differ greatly among states. In Connecticut, for example, the maximum recovery in small claims court is $5000 although the cost of filing the suit is only $75 — less than in California.

Moreoer, lawsuits are not the only route to vindication for disgruntled consumers.  Each state’s office of the Attorney General has forms and procedures for filing consumer complaints.  Consumers need to be aware that by filing an official complaint they are normally consenting to be called upon to act as a witness in any action brought by their state as a result of the complaint.

Many Connecticut residents may remember how , in 2003,  New London native, Casey Neistat and his brother Van produced a 3 minute video calling attention to the problem of iPod’s short-lived irreplaceable battery and Apple’s unsatisfactory response to their personal complaints.  According to Wikipedia, the video received more than a million hits on  the Internet in its first six weeks and  soon thereafter caused Apple to announce a new battery replacement program for the device as well as an extended warranty.

This is just one more example of how one or two individuals willing to make waves can lift up millions who find themselves in the same boat.