THE ETHICAL DIMENSION Suppose that the defendant automaker had opposed this action solely to avoid paying for a car that had proved to be a “lemon.” Would this have been unethical? Explain.

THE LEGAL ENVIRONMENT DIMENSION What does the interpretation of the law in this case suggest to businesspersons who sell products labeled with statements mandated by federal or state law?

In 2004, Gaetano Paduano bought a new Honda Civic Hybrid in California. The information label on the car stated that the fuel economy estimates from the Environmental Protection Agency (EPA) were forty-seven miles per gallon (mpg) and forty-eight mpg for city and highway driving, respectively. Honda’s sales brochure added, “Just drive the Hybrid like you would a conventional car and save on fuel bills.” Paduano soon became frustrated with the car’s fuel economy, which was less than half of the EPA’s estimate. When American Honda Motor Company refused to repurchase the vehicle, Paduano filed a suit in a California state court against the automaker, alleging deceptive advertising in violation of the state’s Consumer Legal Remedies Act and Unfair Competition Law. Honda argued that the federal Energy Policy and Conservation Act (EPCA), which prescribed the EPA’s fuel economy estimate, preempted Paduano’s claims (preemption was discussed in Chapter 4). The court issued a summary judgment in Honda’s favor. Paduano appealed to a state intermediate appellate court.