CALIFORNIA : Judge Considers Criminal Probe of Honda Unit : Courts: U.S. division is accused of concealing evidence from car dealers that were suing it in kickback case.

Allegations that American Honda Motor Co. concealed evidence from car dealers that sued the company over an illegal kickback scheme have prompted a federal judge to consider a criminal investigation of the matter, the Torrance-based auto importer acknowledged Wednesday.

If proved, the charges could void a $316-million settlement reached in October of a class-action suit by 1,800 dealers against American Honda, the U.S. arm of Honda Motor Co. of Japan. That would open the gates for those dealers and for others that have not settled with the company to seek larger payments.

U.S. District Judge J. Frederick Motz said in a recent closed hearing in Baltimore that the allegations “could become the subject of a criminal investigation” of American Honda, its general counsel and two of its outside attorneys.

The judge’s remarks were published Wednesday by Bloomberg News, which said it had just obtained a copy of the Aug. 5 hearing transcript.

All of the dealer suits center on a bribery scandal that has plagued American Honda since the late 1980s. The dealers contended they were hurt financially in the ‘80s and early ‘90s when some company executives demanded and received more than $15 million in cash and goods from dealers in exchange for extra shipments of hot-selling Accords and Preludes or the granting of franchises for additional dealerships.

The dealers that sued Honda contended they were penalized for refusing to pay the bribes because they could not obtain sufficient supplies of cars to compete effectively with their bribe-paying competitors.

Now, a group of dealers that has not settled with Honda charges that company lawyers obstructed justice by hiding for more than five months an affidavit the dealers had sought for use in their civil suit, which followed a lengthy criminal trial in which more than a dozen former Honda marketing executives and Honda dealers pleaded guilty or no contest to a variety of federal fraud, bribery and perjury charges.

The affidavit was prepared in 1993 to show prosecutors in the criminal trial that Honda had taken steps to squelch the bribery activities. But Honda lawyers in the civil case denied that the affidavit existed when asked to produce it last year.

A copy was discovered in Honda’s records in March and was turned over to lawyers for the dealers that didn’t settle their cases. Motz said in court papers that it was “absolutely inexplicable” that Honda’s attorneys didn’t remember the affidavit.

In a statement Wednesday, American Honda said the affidavit was “immediately provided to the court and the plaintiffs” when it was finally discovered this year. The company said it “openly apologized [in court] for failure to provide these documents sooner.” Honda declined to comment further because of continuing litigation.

Lawyers for the dealers asked Motz to impose financial sanctions and to hold Honda automatically liable for damages in four pending dealers’ suits over the bribes. Some dealers said they lost more than $50 million in sales by being denied cars.

In a case that would seem to expose Honda to more litigation, a federal appeals court ruled last month that growers who settled claims against DuPont Co. over a defective fungicide could throw out the agreement after they found that DuPont had hidden evidence.

The U.S. 9th Circuit Court of Appeals said the growers could keep the $2.5 million already paid out in the settlement and still bring new suits to recover their losses.

Bloomberg News was used in compiling this report.