Big news out of Sacramento came late Wednesday afternoon. Ford Motor Co., which was facing a humungous class-action lawsuit involving a million consumers from four states, announced that a settlement has been reached and awaits approval by the court (http://www.sacbee.com/101/story/529480.html).
So what’s the deal? Consumers, who said in this class-action lawsuit that they were duped by Ford’s claims that the Explorer sport utility vehicle was a safe vehicle, will now qualify to apply for $500 discounts on a new Ford Explorer or $300 discounts other Ford vehicles. The settlement will apply to Explorers from model years 1991 to 2001. The lawsuit was brought forth by 414,000 Explorer owners in California, Illinois, Texas and Connecticut.
Thousands of deaths and injuries over the last decade have been suffered by occupants of Ford Explorers involved in rollover accidents. We have represented many of the injured and their families. As an example, on Monday, we are scheduled to start a trial against Ford in Los Angeles Superior Court. We are alleging that one of Ford’s poorly designed SUVs rolled over in an accident and the roof crushed in, paralyzing a passenger, Gloria Levesque. Gloria was a Montessori school teacher for 25 years before being catastrophically injured and permanently unemployable as a result of the accident.
So, really, who benefits from this class action lawsuit settlement? Maybe the attorneys, definitely Ford – but what about the consumers? Let’s look a little closer. How does a measly $500 or $300 discount toward another Ford vehicle compensate consumer, punish the manufacturer and prevent unsafe products from entering the American market place?
Pedro Morillas of the California Public Interest Research Group (www.calpirg.org) is quoted in a Sacramento Bee article as saying,” Five hundred million dollars does sound like a lot of money, but Ford may have gotten a better deal than they deserved.”
In some respects I agree with Morillas. If the case had not settled and the plaintiffs won, Ford, according to its lawyers, would be in bankruptcy. It may not have been able to pay the judgment. It that sense Ford may have gotten a better deal than they deserve.
This lawsuit should’ve aimed to make sure that Ford was punished for producing defective vehicles and ensure that no auto manufacturer in the future would dare market an unsafe product to the American public. To take it further, it should been a warning to every manufacturer that pushing any unsafe product into the American market place will not be tolerated and the manufacturer will be held accountable.
This lawsuit hurt Ford. It has cost them millions in attorneys’ fees. It will cost them hundreds of millions to settle. More importantly it has cost them billions in brand recognition. The perception that Ford SUVs are safe has rolled over and been crushed by the exposure of their knowing disregard for consumer safety.
Ford has spent millions, maybe billions, building its image of making safe vehicles. We now know better. How much damage has been done to Ford’s reputation? How much damage will it do to their future sales? That’s where Ford is going to pay the real price.
Every smart manufacturer who sells products in the United States is looking at this lawsuit and vowing not to make the same mistake. That is where we as consumers benefited from this lawsuit. For decades to come, products sold in America are going to be safer because of this class action lawsuit.
I applaud the attorneys who had the guts, commitment to consumers and foresight to pursue this monumental class action lawsuit. They provided a great service to us all. As consumers we benefit from attorneys who pursue class action lawsuits on our behalf.
It is true that the actual class participants, the consumers who are involved, get very little personal monetary benefit from the class action lawsuit. However, these types of class action lawsuits are designed to keep negligent and fraudulent corporations in check, to hold them accountable for their actions and to make our market place safe for all of us. It was not designed to make the class members rich.
Various federal agencies have been aware of the problems with Ford’s SUVs for years. You didn’t see any governmental agency taking on Ford on behalf of consumers. You didn’t see our government consumer protection agencies holding Ford accountable or preventing their unsafe vehicles coming into the market.
Some will say that it made the attorneys rich. It appears that the attorneys are getting a sizeable fee and I’d love to be one of them. However, I know how much work and expense my firm goes through to do a few dozen cases against Ford. There is no way we could afford to risk the tens of millions of dollars and tens of thousands of hours of work time to pursue such a class action lawsuit. If we could come up with the money and man power in the first place, we’d be bankrupt if we lost.
Bottom line, our system of justice worked. The wrongdoer is being held accountable. The harmed are getting some compensation. And America is a safer place for it.
Hooray for our system of justice!