Small claims chipping away at huge firms

NEW YORK >> If you feel cheated by a big company and complaining gets you nowhere, what can you do? A handful of recent cases suggest that consumers can, if they’re motivated enough, win against big companies in small claims courts.

These “David versus Goliath” battles were won against the likes of AT&T, Honda, without resorting to lawyers. The plaintiffs paid minor filing fees, gathered their own research and made arguments in hearings that resemble the average “Judge Judy” episode.

And now, thanks to the Internet, these victors are connecting with other consumers in hopes of helping them replicate their successes. If it catches on, it could amount to a big-bucks difference in payouts by these giant corporations.

“It is a significant undertaking,” says Heather Peters of Los Angeles, who sued Honda because her Civic Hybrid didn’t meet its claims for gas mileage. She won $9,867 last month.

“But with the Internet, it’s a whole different world,” said Peters, a former lawyer who just reactivated her license. “It just takes one or two people like us who are the anal-retentive, compulsive people to do all the work, and are magnanimous enough to say: ‘Here you are! Go get ’em. You do it, too!’”

Other success stories include Matt Spaccarelli of Simi Valley, Calif., and Henry Brown of New York, who both sued AT&T Inc. Brown won $1,587.50 in October after suing the telecommunications giant for frequently dropping his wireless calls and charging him an early termination fee when he wanted to end his contract. Spaccarelli was awarded $850 last week after suing AT&T for slowing down the data service on his iPhone when he hit a limit for downloads, even though he had an “unlimited data” plan.

Peters and Spaccarelli have both put up websites that feature copies of documents they used in court.

Peters says hundreds of people have expressed interest, and she knows of at least six consumers who have filed cases. Dozens  have contacted Spaccarelli.

Their victories aren’t necessarily final. Honda says it will appeal Peters’ award, and AT&T is appealing Spaccarelli’s. But the new hearings will basically be reruns of the first ones. They will feature similar and relatively informal rules. So there’s no way the companies can use their resources to take a small claims case to a jury trial and force the consumer into enormous legal fees.

Peters started her case because she was dissatisfied with a class-action settlement in the works over the Honda Civic Hybrid’s gas mileage. That settlement would give Civic owners $100 to $200 each, plus a rebate on a new Honda. Peters made out much better.

Should companies be scared of consumers heading to small claims courts?

Honda’s proposed class action settlement might cost the carmaker $40 million, if every one of the 200,000 Civic Hybrid owners claimed the maximum. But if all of the owners went to small claims court and fared as well as Peters, the company would be out nearly $2 billion.