An Ohio judge has awarded a $2 billion judgment against Ford Motor Co. to a class of commercial truck dealers. In the suit, the dealers contended Ford overcharged them for 11 years. The dealers sued Ford in 2002, alleging that the company broke an agreement to sell trucks at published prices, which forced them to pay more from 1987 through 1998 which cut into their profits. On June 10th Judge Peter J. Corrigan upheld a $4.5 million verdict that had been awarded to one Ohio dealer in February by a Cleveland jury.
Judge Corrigan also ruled that Ford had to pay similar damages and interest to a class of about 3,000 other dealers. Ford claims its wholesale price discount system “caused no harm” to their dealers. Interestingly, the Ohio Court of Appeals has already upheld Judge Corrigan when he certified the case as a class action. Ford says it will appeal. The Judge certified a class in 2005, allowing the dealers to pursue claims against Ford as a group. That decision was upheld on appeal and the Ohio Supreme Court refused to take Ford’s petition for review. Judge Corrigan has now upheld the jury’s finding that Ford breached a contract with its dealers through its wholesale pricing system and in affirming the verdict the Judge wrote:
Because every potential price was not published, each sale is affected by hidden discounts in each negotiation of the artificially inflated published price. As to all class members, it is undisputed that the franchise agreements were identical in all material aspects.
Ford was accused in the lawsuit of breaching an agreement with truck dealers by failing to publish to all of them all price concessions that were approved for any dealer, the company said in a regulatory filing. The class includes all Ford dealers who bought from the company any 600 series or higher truck over a period of about 11 years, starting in 1987. The Court also granted the dealers’ motion for summary judgment on liability.
The claims covered sales of 474,289 trucks. Judge Corrigan added $6.65 million in interest to the $4.5 million jury verdict. The total $2 billion judgment to the class includes about $1.2 billion in interest. Judge Corrigan will stay execution of the judgment pending Ford’s posting of a $50 million bond. James Lowe, of Lowe Eklund Wakefield & Mulvihill, a firm from Cleveland, represented the Plaintiffs in this case. Based on all we have learned, he did a tremendous job in the case.
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