June 07 2007 - SUV rollovers put Ford´s future in judge´s hands
A major lawsuit set for trial next month in Sacramento claims Ford Motor Co. deceived consumers about the safety of its Explorer sport-utility vehicles and threatens more than $2 billion in profits Ford earned from Explorers built in the 1990s and sold in California. The class-action lawsuit, brought on behalf of more than 414,000 Explorer buyers, is so large that it puts the automaker at risk of collapse, a Ford defense lawyer said Wednesday, after a final pretrial hearing. The trial is scheduled to start June 4 before Sacramento Superior Court Judge David DeAlba, who will decide the case without a jury. Ford lost $12.7 billion last year, said Malcolm Wheeler, a Denver attorney who heads Ford's trial team. "This is a company that has had to lay off thousands of employees, a company struggling with a $3.5 billion negative net worth," Wheeler said. Plaintiffs' lawyers contend that regardless of the financial impact, Ford should be punished for falsely marketing the safety and reliability of the Explorer, which it knew to be prone to roll over because of its high center of gravity and other factors. Tab Turner -- a Little Rock, Ark., lawyer who pioneered SUV rollover lawsuits involving the Ford Bronco II and Explorers and has sued Ford more than 1,000 times in death-and-injury cases -- will be the plaintiffs' lead trial counsel in the Sacramento case. "This vehicle is one of most dangerous vehicles ever produced in this country," Turner said. Marketed as a replacement for family station wagons, the Explorers built in the 1990s have a tendency to flip over during evasive maneuvers at speeds over 40 mph, he said. Ford knew of the Explorer's problems but decided it was more profitable to produce the vehicle without changing its design, he said. A marketing campaign then touted the Explorer's safety and reliability for everyday use. "What this case boils down to is what did Ford tell the public and what did Ford not tell the public?" Turner said. "If the judge finds we're correct in this case, he has the right under the law to disgorge them of their profits." In their lawsuit, the plaintiff attorneys claim Ford's deception cost the state's car buyers about $500 million when the value of their vehicles fell once the alleged defects became widely known. The value of each of the 414,569 SUVs dropped from $1,000 to $1,300 beyond normal depreciation, according to experts the lawyers have retained. In addition, the plaintiffs are seeking a return of profits Ford earned from its alleged wrongdoing. According to the plaintiffs' lawyers, Ford reaped profits of $2.135 billion on $11 billion in sales of Explorers in California from 1990 to 2000. The lawsuit doesn't demand a specific amount of money, but the plaintiffs must spell out what they are seeking the morning trial begins. DeAlba has broad discretion to order Ford to pay, should he find the company violated state consumer-protection laws. The suit was filed under the state's unfair competition and false advertising statutes, which are considered among the nation's strongest. "The court exercising its equitable powers can look at the $2.135 billion and determine what amount should be returned to class members due to Ford's wrongful conduct," said Tracey Buck-Walsh, a Sacramento-based attorney for the plaintiffs. The class-action lawsuit, combining a handful of cases filed in California, is the first of its kind in the nation to go to trial and is being closely watched. Another case is making its way through the court system in Illinois. Courts in Florida and Connecticut refused to approve similar class actions, and lawsuits in several other states were dismissed by judges or dropped by plaintiffs. The Sacramento trial is expected to last two months, with more than a half-dozen top plaintiff lawyers on one side, and a team of Ford lawyers on the other. The class of plaintiffs includes California residents who bought, owned or leased a 1991-2001 model-year Ford Explorer, new or used, between 1990 and Aug. 9, 2000. To qualify, Explorer drivers must still possess their vehicles, or they must have sold them or ended their leases after Aug. 9, 2000. That's when the first recall of Firestone tires used on the Explorer was announced. The tires, which were plagued with tread-separation problems, contributed to Explorer rollovers. Bridgestone/Firestone settled nationwide consumer lawsuits against it in 2004 for $149 million, in addition to numerous personal-injury cases. Ford lawyer Wheeler said it was the tires, not the Explorers, that were the problem and plaintiffs' lawyers were simply trying to extract millions more from Ford. He said the Explorer had been deemed safe by Consumer Reports magazine and the National Highway Traffic Safety Administration. Out of 32 Explorer product-liability cases that had gone to trial, Ford had won 26 of them, he said. Turner said Ford took only certain cases to trial and had settled another 4,000 to 5,000 cases around the United States and in other countries in which it had paid injured parties. He said it's true that the Firestone tires were bad, but he argued it was a case of a bad tire on a bad vehicle. Even with a blown tire the Explorers shouldn't roll over, he said. "When you put a bad tire on the Explorer and it fails, you're pretty much guaranteed you'll have an accident because the Explorer is so unstable," Turner said. "You're supposed to be able to pull over to the side of the road when you have a flat tire. You're not supposed to flip over."