Ford to Appeal $2 Billion Judgment in Truck Dealer Class Action
CLEVELAND – After an Ohio judge awarded $2 billion to a class of commercial truck franchisees last Friday, who claimed the automaker overcharged them for over 10 years, Ford Motor Co. said it will appeal the decision.In hearing the news, general counsel David Leitch said in an interview with Reuter, “This is a long-term process. We’re not writing any $2 billion checks this week.”
A Ford spokeswoman also responded stating, “We believe that the trial court committed significant legal errors. The wholesale price discount system caused no harm to our dealers; rather, it brought significant benefit to the dealers.”
Cuyahoga County Judge Peter J. Corrigan on June 10 upheld a $4.5 million verdict awarded to a Youngtown, Ohio truck dealer last February by a jury. In his ruling he said Ford had to pay similar damages and interest to a class of 3,000 commercial truck dealers who bought 600 or higher series of Ford trucks. The franchisees accused the company of reneging on its contract to sell trucks at published prices, which forced the dealers as early as 1987 to pay more. In his ruling, Judge Corrigan stated, “Ford breached the unambiguous terms of the contract . . . when it failed to publish prices to all dealers.”
The original lawsuit, Westgate Ford Truck Sales, Inc. v Ford Motor Company was filed in 2002.
Besides an award for damages, the judge granted $6.65 million in interest. The $2 billion judgment includes approximately $1.2 billion in interest. According to a Bloomberg report, the total award is five times higher than the largest-ever jury award against Ford in a lawsuit. The court ruling affects 3,000 dealers and covers 474,289 trucks.
In response to the news, Ford Motor Co. stock fell four percent on Monday. But yesterday the trading shot back to $13.35, ahead of Friday’s closing prior to the verdict being reported. After Ford announced it would appeal the decision, James Lowe of Cleveland-based law firm Lowe Eklund Wakefield & Mulvihill, said Ford appealing the decision is no surprise, but he doesn’t think it will have any more success with the Ohio Court of Appeals than it did previously.
In 2005, Judge Corrigan certified the commercial truck dealers as a class, and Ford appealed that decision before the trial began. Lowe said the court of appeals ruled in 2007 and affirmed the class certification. “Nothing has changed since then,” he said.
David Sterns of Sotos LLP, one of the lead attorneys representing another class action from dealers in Canada, said, “This judgment underscores the vital importance of inventory pricing to all franchisees. Where dealers and franchisees are entitled to special pricing from their manufacturer/franchisor, those obligations will be strictly enforced by the courts. As can be seen from this judgment, the price of non-compliance can be very high.”
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- Ford to Appeal $2 Billion Judgment (Bloomberg)
- Ford shares fall after $2B judgment in dealer suit
- Ford to appeal $2 billion Cuyahoga County verdict this week
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