A federal judge has approved a settlement worth nearly $330 million between American Honda Motor Co. and 1,800 of its dealers who had charged the automaker with bribery.
A class-action lawsuit brought against Honda by dealers alleged that Honda executives conspired to send cars to those willing to pay exorbitant bribes and punished dealers who refused.Under the terms of a settlement approved Oct. 9 by U.S. District Judge J. Frederick Motz, American Honda Motor Co., based in Torrance, Calif., will pay the dealers a total of $329.85 million, lawyers in the case said Friday. In exchange, the dealers will drop their bribery claims.
Honda dealers said they had to offer company managers extravagant gifts in order to get the cars they needed during the mid-1970s and throughout the 1980s, when the cars were in great demand and short supply.
Gifts included shopping sprees in Hong Kong, cash gifts approaching $1 million and checks for children's college tuition.
The lawsuit represented current and former Honda and Acura dealers in virtually every state, said Baltimore attorney James Ulwick, an attorney representing dealers.
The first suit was filed in 1994. Last year, Motz allowed dealers to form a class action suit. Honda faced more than 50 civil suits filed by dealers around the nation, including several in the Baltimore-Washington region.
The lawsuits alleged that Honda executives at the highest levels, including those in Japan, looked the other way while their employees took the bribes during the 1970s and 1980s.
Dealers who didn't pay bribes claimed that the cars they needed to stay competitive were diverted to dealers willing to give a seemingly endless stream of gifts to Honda executives and sales managers.