Judge approves class-action settlement against Ford Motor Co.

Chris Rizo Apr. 16, 2008, 1:50pm

SACRAMENTO, Calif. (Legal Newsline)-A California judge has approved the settlement of a class-action lawsuit that will compensate about 800,000 Ford Explorer owners whose vehicles were alleged to have lost value because of a perceived danger of roll-over.

The settlement approved in Sacramento County Superior Court by Judge David De Alba, ends a lawsuits against Ford Motor Co. in California, Connecticut, Illinois and Texas.

The attorneys representing the class members will receive fees of up to $25 million, to be paid by the Dearborn, Mich.-based automaker.

The class-action lawsuit, filed in 2001, claimed Explorers lost about $1,000 in resale value because of negative publicity that followed a series of rollover accidents involving the mid-size sports utility vehicle.

The plaintiffs also claimed that Ford knew of a design flaw that made the SUVs prone to rollovers. In accepting the settlement terms, Ford admitted to no wrongdoing.

The settlement approved Tuesday makes car owners who purchased Explorers in model years 1991 through 2001 eligible for a $500 discount certificate to buy a new Explorer or a $300 voucher to buy other Ford or Lincoln Mercury vehicles.

The settlement was opposed by some consumer groups, including the Center for Auto Safety, which said the vouchers would be of little use to consumers who cannot afford a new car purchase.

Clarence Ditlow, executive director of the Ralph Nader-founded consumer advocacy group, told Legal Newsline the settlement is the type of resolution that "gives class-actions a bad name."

"We simply think that no more than $1 million is going to be redeemed, yet the attorneys are getting $25 million," Ditlow said. "It's just totally disproportionate."

He said unless the attorneys get "something of value for the consumer," they should not get attorneys fees "that is 50-times higher than what the total value of the class is."

In his ruling, De Alba said fewer than 70 plaintiffs had filed written objections to the settlement.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at chrisrizo@legalnewsline.com.

More News