7 Dealers Sue Honda Over Bribery : Litigation: Suits allege dealerships suffered while company executives illegally took $15 million for favorable treatment in allocating scarce cars.
American Honda Motor Co. was hit with seven separate lawsuits Wednesday by Honda dealers who say their businesses suffered financially in the 1980s while the Japanese car importer allowed a bribery ring to run rampant in its executive ranks.
The lawsuits, filed in U.S. District Court in Los Angeles, bring to nearly 40 the number of suits lodged against Torrance-based American Honda since a federal investigation and trial unveiled the bribery scheme.
Top American Honda marketing managers took more than $15 million in cash and goods from car dealers from 1981 until 1992 in return for favorable treatment at a time when Honda cars were in high demand and short supply.
The latest batch of suits was filed by Los Angeles attorney Lawrence Silver, representing two dealers from New York, two from New Jersey and one each from Florida, Wisconsin and Texas. They are seeking unspecified damages from American Honda, two current executives and 14 former executives, and its Los Angeles law firm, Lyon & Lyon, and one of the law firm’s partners.
Each dealer alleges fraud, breach of contract, negligence and loss of income and asks the court to treble the ultimate amount of damages under the federal racketeering act.
American Honda spokesman Kurt Antonius said the company had not seen the suits and would have no comment. Roland N. Smoot, the Lyon & Lyon partner named in the suits, also said he had not seen the cases and would have no comment.
Silver, who also represents former Orange County Honda dealer Roger Miller in a $17-million suit against American Honda, has built his case on testimony culled from the federal bribery trial of former Honda sales vice president John W. Billmyer and former western zone manager Dennis R. Josleyn.
The two were found guilty last month of conspiracy after a four-month trial in which numerous witnesses detailed the history of the bribery ring and disclosed numerous unsuccessful attempts, beginning in 1983 and stretching through 1991, to get American Honda’s top corporate management to put a stop to it. Josleyn also was convicted of fraud and racketeering.
In addition, 20 others--18 of them former American Honda managers--have pleaded guilty to felony charges in the case. Sentencing is expected to begin late next month.
Silver said Wednesday that this is “the first round” of suits he expects to file for disgruntled Honda and Acura dealers.
He and attorneys handling most of the previously filed suits are awaiting word from the federal courts’ jurisdictional panel on a motion to consolidate all of the Honda suits for a single trial either in Concord, N.H., Sacramento or Los Angeles. The motion is scheduled to be heard July 21 in Colorado Springs, Colo.
The Honda case was tried in New Hampshire because it grew out of a civil suit filed in federal court there by a former Acura dealer who contended his business suffered when competitors got increased car allotments after paying bribes.
In his suits, Silver has included a 33-page list of bribes that the former Honda marketing officials admitted to receiving.
Federal investigators have said that an Orange County man, Stanley James Cardiges, masterminded the bribery ring. The Laguna Hills resident, who allegedly pocketed more than $5 million over the years, was Billmyer’s protege and successor as vice president of sales--a post he held until forced to resign after American Honda mounted an internal probe in 1992. Cardiges pleaded guilty to multiple felony charges on the morning his trial was to have started. He then became a government witness.
