Recent News from the Industry
Ford Faces First Federal Jury Over Fiesta, Focus Fracas
By Craig Clough
Law360, Los Angeles (November 5, 2019, 11:03 PM EST) — A California jury heard openings Monday in the first of nearly 1,000 consolidated federal cases to go to trial over alleged defects in Focus and Fiesta transmission systems, with the owner saying Ford should have bought the car back after numerous clutch replacements while Ford asserted the car is safe.
The federal case brought by Van Nuys resident Mark Pedante is part of multidistrict litigation consolidated in the courtroom of U.S. District Judge André Birotte and concerns Ford Motor Co. PowerShift transmissions that were used in 2011-2016 Fiestas and 2012-2016 Focuses, about 1.5 million vehicles in total.
Pedante purchased a new Focus in 2013, but despite the car only having 70,000 miles on it, it has needed eight new clutches installed due to a series of problems where the car would vibrate, lose power or have other acceleration and deceleration problems, Pedante’s attorney Bryan Altman of the Altman Law Group told the jury during openings.
Ford knew about the problems with the PowerShift long before Pedante purchased his vehicle due to its worldwide tracking system of warranties, and the PowerShift was found to have an overall failure rate of 100%, he said.
“The problem was that this new system malfunctioned often, and when it malfunctioned it was extreme,” Altman told the jury.
The federal cases were consolidated into the MDL in January 2018, and Ford agreed in March of the year to provide “substantial cash payments” and other benefits to owners of the Fiesta and Focus models that had to be repaired because of the allegedly malfunctioning transmissions. It’s a “claims made” agreement under which Ford must pay out all legitimate claims, so there’s no set value, but an expert for the drivers has estimated its value at $35 million.
The drivers who opted out opposed the settlement’s compensation structure, as those who don’t opt out would be forced into arbitration to pursue damages that they say are almost impossible for many to collect.
When Pedante approached Ford in 2016 — while on his fourth clutch — about repurchasing his Focus, he “was told to go pound sand,” Altman said, despite the state’s Song-Beverly Consumer Warranty Act, which requires manufacturers to replace or repurchase faulty products after a reasonable number of repair attempts.
Altman said Pedante is seeking relief for Ford’s violations of the Song-Beverly Act and for punitive damages. He also told the jury that after years of denials, Ford informed his legal team on Friday that the company was going to admit it broke the law.
Frank P. Kelly of Shook Hardy & Bacon, who is representing Ford, told the jury that his client acknowledges there are problems with the PowerShift and with Pedante’s vehicle, but that it is limited to a vibration felt in the driver’s seat known as a “shutter” that occurs for about one second at low speeds.
Kelly said the evidence would show that Pedante’s car “is, was, and continues to be a safe car for him to drive.”
Altman told Law360 after court that he represents about 170 of the MDL clients, but that there are also roughly 300 cases in California state court and he represents about 150 of them.
He also said that the first case in the nation to go to court over Ford’s PowerShift was a client of his, Ariel Myers, who won a nearly $700,000 judgment in July 2018 from a jury in Los Angeles Superior Court.
“It’s because of that case that you see they’ve got about 15 lawyers on this one,” he said, referring to the large size of Ford’s legal team that was in court.
Altman said that although the case is the first in the MDL to go to trial, it is not necessarily serving as a bellwether case because Judge Birotte stuck the fraud claims, a claim central too many of the other lawsuits. The jury in the Myers case found that Ford has committed fraud, although Ford has filed an appeal.
Kelly declined to comment, and Ford did not immediately respond to a request to comment.
Pedante is represented by Bryan C. Altman of Altman Law Group and Russell W. Higgins of Knight Law Group LLP.
Ford is represented by Frank P. Kelly of Shook Hardy & Bacon and Spencer Peter Hugret of Gordon Rees Scully Mansukhani LLP.
The case is Pedante v. Ford Motor Co., case number 2:17-cv-06656, and the MDL is In re: Ford Motor Co. DPS6 PowerShift Transmission Products Liability Litigation, case number 2:18-ml-02814, both in the U.S. District Court for the Central District of California.
—Additional reporting by Kevin Penton and John Kennedy.