Honda lost a lawsuit for giving misleading mpg (miles per gallon) information against a Southern Californian former lawyer Heather Peters, who then launched a website to encourage other Honda owners to stand up against the Japanese auto giant, giving further trouble to the company.

Doublas Carnahan, Los Angeles Superior Court Commissioner, ruled yesterday that Honda committed fraud and awarded Heather Peters $9,867. In California, the maximum amount one could receive at a small claims court is $10,000.

However, the single court result is not the only trouble Honda has to face, because Peters launched a website DontSettleWIthHonda.org to promote other Honda owners to take action. According to the Associated Press, Peters intends to renew her legal license to “represent other Honda owners who have the sample problems she did.” Peters said hundreds of people have already requested guidance from her.

According to Peters’ argument against Honda, the 2006 Civic Hybrid she owns does not deliver 50 mpg as the company advertised. After updating the software, which was represented as a cure for the low mileage, things got worse for Peters and the mpg dropped to no more than 30.

Peters chose to opt out of the class-action lawsuit, which proposed $100 to $200 for aggrieved owners and a $1,000 credit for a new vehicle, and decided to go for a small claims court. Peter says the legal fees associated with a class action would give the lawyers $8.5 million. The small claims court cost no attorneys’ fees and cases are decided quickly. Individual payments are also great, according to the AP.

“At a bare minimum Honda was aware … that by the time Peters bought her car there were problems with its living up to its advertised mileage,” wrote Carnahan in the judgment.

There are about 200,000 Honda Civic hybrid owners covered by the proposed settlement. Peters said if all 200,000 owners opt out of the class-action lawsuit and goes to the small claims court, Honda could lose $2 billion.

Chris Martin, Honda’s spokesman, said the company disagrees with the case and plans to appeal.

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