$329.85 Million Settlement for Honda and Acura Dealers in Nationwide Bribery RICO Class Action

For years, Honda and Acura dealers across the country operated under a quiet threat: pay up, or watch your vehicle allocations shrink. During the 1970s and 1980s, when demand for Japanese vehicles far outpaced supply, a number of Honda Motor Co. executives allegedly steered coveted car allocations toward dealers willing to pay bribes, while dealers who refused found themselves short on inventory and watching competitors receive the cars they had ordered.

The forms of payment were varied and often brazen. Dealers described cash gifts approaching $1 million in some instances, Hong Kong shopping trips arranged for Honda personnel, and tuition payments made for the children of company employees. Those who declined to play along reported having vehicles quietly redirected to rivals who were more cooperative.

Beginning in 1994, dealers started filing civil suits. Within a few years, more than 50 separate actions had been brought against American Honda Motor Co. across the country. The cases were consolidated as a multidistrict litigation proceeding in the U.S. District Court for the District of Maryland under MDL No. 1069, assigned to Judge J. Frederick Motz. The sprawling class covered approximately 1,800 Honda and Acura dealers nationwide.

William Kershaw of the firm then practicing in Sacramento served on the plaintiffs' executive committee, the core group of counsel responsible for coordinating strategy, discovery, and negotiation across the consolidated proceeding. The claims rested on RICO statutes and federal antitrust law, alleging that Honda's allocation scheme amounted to a racketeering conspiracy that suppressed fair competition among dealers.

On October 9, 1998, Judge Motz approved a settlement of $329.85 million. A subsequent opinion issued by the same court in 2001 addressed attorneys' fees arising from the common fund, confirming the scale of the recovery and the structure of the plaintiffs' committee that achieved it. The settlement remained one of the larger RICO class action recoveries involving an automotive manufacturer up to that point.