New Jersey sues Nissan for concealing thefts from customers.

In an effort to remedy an ongoing "public safety" issue," officials representing the state of New Jersey filed suit against Nissan North America, alleging that the automaker was aware of a growing number of thefts involving one of its vehicles but failed to respond adequately to the problem. (Harvey v. Nissan N. Am., No. SOM-C-012018-04 (N.J., Somerset County Super. Ct. filed Mar. 8, 2004).)

New Jersey Attorney General Peter Harvey and the director of the Division of Consumer Affairs, Reni Erdos, filed the suit under the state Consumer Fraud Act (CFA). They allege that Nissan knew that a thriving black market existed for the costly xenon bulbs found in the headlights of its 2002 and 2003 Maximas. By failing to share this knowledge for over a year with owners of the vehicle and by charging them for an a antitheft kit, Nissan engaged in "unconscionable commercial practices and the knowing concealment, suppression, or omission of material facts, all in violation of the CFA," the complaint states.

"For us, it's a public safety issue as much as a consumer products issue," Harvey said. Owners of the targeted Maximas reported being stranded at night in parking lots after returning to their cars and then discovering that their headlights were gone. "It's dark and they can't drive home," he explained. "If they don't have someone to come and get them, it presents a major safety problem for them, let alone the inconvenience."

According to the complaint, the company sent a memo to its dealerships in September 2002 announcing that a replacement kit was available for the xenon headlamp assembly connectors that were damaged as a result of the thefts.

In early December, the company sent dealerships another bulletin, stating that a "2002-2003 Maxima Xenon Headlamp Theft Deterrent Kit" was available for customers to purchase. According to the complaint, the automaker was charging Maxima owners an additional fee--S175, including parts and labor--to protect them "from a design flaw that Nissan knew about, but did not disclose" to buyers.

"Nissan was really not treating its customers very fairly," Harvey said. "We looked at the Consumer Fraud Act and realized that at the point of sale or lease, Nissan was not disclosing facts that it knew were material to its customers' purchasing decisions."

The Division of Consumer Affairs learned that Nissan finally notified about 46,000 Maxima owners of the headlight theft problem in November 2003 and advised them that dealerships would install a "securing device" without charge. The device was different from the more effective--and costly--anti-theft kit, Harvey said.

Thieves in 19 New Jersey municipalities stole or attempted to steal the headlamps 756 times in 2003, according to police reports cited in the complaint. Since the state filed its suit, owners have reported an additional 250 thefts or attempted thefts, Harvey said.

"These headlights are stolen, by and large, in 90 seconds or less," he said. "If someone is really clumsy they can [take] three to four minutes, but if they're clumsy, they do a lot of damage to the car." The lights--which reportedly sell for about $200 a piece on the black market--cost about $2,000 to replace; if the car is damaged, the cost escalates to between $5,000 and $8,000, Harvey said.

The state is seeking restitution to Nissan's customers for their out-of-pocket expenses related to the thefts, including deductibles and increased insurance premiums.