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Honda Settles Suit Over Bribery Scheme

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TIMES STAFF WRITER

In a move that avoided a forced court appearance by company President Koichi Amemiya, American Honda Motor Co. has settled a lawsuit filed by a former Honda dealer who claims he was penalized for refusing to pay kickbacks to company executives in the 1980s.

The settlement disclosed Monday was reached Oct. 30 after a week of testimony in Alvin Arata’s suit against the Torrance-based car importer, a subsidiary of Honda Motor Co. of Japan.

Terms of the agreement weren’t revealed, but Arata’s attorney, Benjamin Johnson, said Monday that the former dealer, who sued for about $23 million in actual damages, is “very pleased with the amount” of the settlement. Two other suits by dealers in Florida were also settled about the same time.

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Arata’s case, filed in San Mateo Superior Court, was the last remaining U.S. lawsuit against Honda stemming from a nationwide bribery and kickback scheme that has haunted the company for more than a decade and that saw a number of former top American Honda marketing executives plead guilty to federal felony fraud charges.

The executives had demanded payments from Honda dealers during the late 1970s and 1980s in return for shipments of hot-selling Honda and Acura brand vehicles. Dealers who paid received extra allotments of the profitable vehicles, while those who refused were denied cars.

American Honda declined to comment beyond a written statement that company officials are “happy that this matter is now behind us, and that this issue is resolved.” The company cited a confidentiality agreement that prohibits further comment.

The auto maker has consistently maintained that the scheme was hatched by a cadre of rogue executives and that the company and its top management had no knowledge of it.

Johnson said in an interview earlier this year that he had subpoenaed Honda’s Amemiya in hopes of persuading jurors that the company did know about, and condoned, the bribe scheme. That same argument has been floated but never proved in other cases involving the scheme. Amemiya had been scheduled to testify in the Arata trial Nov. 1, two days after the settlement was reached.

In October, American Honda agreed to pay as much as $55 million to settle seven similar federal suits, and last year the company paid $316 million in cash and auto parts to 1,800 dealers to resolve their bribery claims.

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