Major News for Focus, Fiesta Owners!
Urgent News Regarding Defective Transmissions Claims
And Ford’s 2011-16 Fiesta, 2012-16 Focus Vehicles
Making major news impacting approximately 1.5 million owners of Ford Focus and Fiesta vehicles nationwide who claimed their transmission was defective and dangerous, the Ninth Circuit Court of Appeals on September 13, 2019 reversed approval of Ford’s 2017 (“Vargas”) class action settlement, due to procedural irregularities, and because of its fundamental unfairness to owners, prior owners and lessees of these troubled vehicles. More specifically, the Ninth Circuit vacated Ford’s class action settlement, finding that the district court should again review the settlement based upon procedural irregularities and its fairness and adequacy, given the limited value of the deal to vehicle owners as determined by an expert for the class action attorneys. The class action case is Omar Vargas et al. v. Ford Motor Co., case numbers 17-56745 and 17-56746, in the U.S. Court of Appeals for the Ninth Circuit. The appellate judges vacated “final settlement approval” after a non-profit consumer group, Public Citizen, had questioned the amount of compensation which would be awarded to deserving owners and because an overwhelming number of these damaged owners would have been paid no compensation.
Attorney Michael Kirkpatrick, who argued before the appellate court for Public Citizen, stated, “We are confident that, once the district judge takes a closer look and considers further the evidence about the value of the claims that would be released by the settlement, the district court will agree ... that the settlement is not fair, reasonable and adequate, and will not grant final approval.”
The appellate judges questioned whether the district court adequately scrutinized the calculation of the settlement amount. “The court adopted the estimate of class counsel's expert that the cash payments were worth around $35 million.” But that calculation was based on total payments to every eligible vehicle owner, while the actual claims rate was expected to be much lower, resulting in an even smaller payment by Ford, the judges noted.
In Ford’s original class action settlement, it was estimated less than 8% of owners would ever receive compensation. "Thus, only a very small fraction of the class likely stands to gain any monetary benefit," the court of appeal said. "The district court's analysis failed to analyze the settlement's fairness in light of this information." Finally, the appellate court said, the district court failed to apply the appropriate scrutiny to the deal's arbitration process and its "clear sailing" provision, under which Ford agreed not to challenge the award sought by class counsel.
In the class action settlement, Ford had also agreed not to challenge the $8,856,000 in fees awarded to the class action attorneys, which was less than the anticipated payout to affected owners, according to the court ruling. The 9th circuit “has warned district courts to be alert for certain 'subtle signs that class counsel have allowed pursuit of their own self interests and that of certain class members to infect the negotiations.' At least two of those signs are present in this settlement, which includes a fee award disproportionate to the class recovery and a 'clear sailing' provision whereby (Ford) agreed not to object to the fee award sought by class counsel.”
While many had hoped for this possible result after appellate judges aggressively questioned Ford regarding fairness issues, no one could confidently predict this result, and some uncertainty regarding the outcome still remains pending the review by the district court. Nevertheless, for owners of Ford’s 2011-16 Fiesta or 2012-16 Focus vehicles with transmission problems, this is very important news as the settlement will now be reconsidered by the district court. We will ultimately need need to await a further determination from the district court with respect to whether, how and when the settlement terms need to be adjusted, in addition to whether and when an additional opt out period will be required once any new agreement occurs.
stay informed to protect your rights!
There were clear advantages to the alternatives available by originally opting out and filing a direct legal action against Ford, as have thousands of the clients Stern Law now represents. This decision does not affect those owners and former owners that previously opted out of Ford’s class action settlement prior to the opt out deadline. For those that failed to timely opt out before the deadline, however, the district court will now determine whether a new opt out period is required, enabling additional owners to opt out of any new or revised class action settlement.
Here’s what matters right now...
An updated or revised class action settlement may soon be reached between class counsel and Ford, subject to the review and approval of the district court, with slightly different elements and technical changes to respond to the concerns of the appellate court. It’s unknown whether an opportunity will then exist for additional owners to opt out that version of Ford’s class action settlement. If the district court determines that an additional out period is required, then, as before, owners may be automatically subject to the terms of that version of Ford’s class action settlement unless they opt out timely in order to sue Ford directly to recover all the compensation they deserve. We firmly believe owners should remain in charge of their own claim, not class counsel they’ve never never met or had discussions with, based upon every owner’s unique damages and preferences. We also believe each owner should be able to file their own claim to pursue all the compensation they deserve, without the limitations, compromises and unfairness we frequently discover in class action settlements.
We will continue to post any developments in the class action case here. It’s important that you stay informed if you did not previously opt out before the deadline.
STERN LAW— THE DIFFERENCE
We believe Stern Law represents more Focus and Fiesta owners with defective DPS6 transmissions than any other law firm in the country. Our mass action, with nearly 12,000 individual claims, has survived and overcome a wide range of efforts by Ford to limit or delay these claims. Further, during our investigation, we reviewed Ford’s non-confidential, internal documents. Doing so has uncovered important details revealing that Ford was fully aware of problems with these defective transmissions even before they were first sold to owners like you. As we’ve alleged in our complaint, we believe that’s fraud as it’s unlikely that anyone would have ever purchased these vehicles if Ford had disclosed what it knew about the defect and purposefully concealed from prospective purchasers. We are also eager to show how Ford still remains unable to permanently and universally fix the issue, more than two years after reaching their class action settlement. The Detroit Free Press and USA Today made national news by uncovering some of these facts, but the full story remains to be told.
If the district court decides to provide owners with additional time to opt out for those that didn’t timely opt out the first time, these owners may benefit from the momentum of our already-existing litigation. In that event, by providing claim information now for our review, you wouldn’t be ‘starting from scratch’ when the district court review is complete, but, instead, you’ll benefit from our knowledge in existing cases and the work we have done in preparing those claims. Most importantly, you’ll have the chance to have us review a possible path toward pursuing the compensation you deserve in a case where you’ll be in control. In certain cases with multiple repairs, Ford may still be willing to offer you a buyback, regardless of what happens with Ford’s class action settlement. We can explore that option for you today.
Make no mistake, while this appeal of Ford’s class action settlement was being pursued, Ford was losing in court; one case in particular resulted in a Focus owner receiving a verdict for over $550,000. That sort of verdict is of course exceptional, as every case is different and results may vary based on the facts. It suggests, though, that Ford is now on its heels and has good reason to be very concerned in these cases. Members of Congress have recently demanded investigations into the transmission and Ford’s decision making. Where owners were constantly being misled by Ford and their dealerships that it was the fault of owners that their transmissions were failing, or that the transmission functioned ‘normally,’ Ford should eventually explain why every owner shouldn’t be entitled to a buyback because Ford knowingly sold a vehicle with a transmission that Ford knew was defective when sold, without disclosing what it knew to every purchaser.
Former owners of these vehicles may still have options, too. If the district court decides to provide owners and former owners that didn’t timely opt out the first time with an additional opportunity to opt out, and they felt forced to sell or trade-in their vehicle, or even if it was repossessed, they may still be able to pursue a claim for damages. Our firm represents thousands of former owners who are pursuing damages for their unique circumstances. In a trade-in scenario, many former owners have taken on even more debt by transferring the debt on one defective Ford vehicle into a second new Ford vehicle and loan, creating “double negative equity,” all due to the excessively depreciated value of the first vehicle and market recognition of a defective transmission which Ford cannot permanently and universally fix.
The clock is ticking, though. A new class action settlement could soon be reached. With millions of dollars in legal fees at risk, class counsel will be highly motivated to reach a new settlement with Ford. Don’t be left out, again!
That’s why you should be motivated to get your claim review started now. And we do not believe there is a better option for owners of vehicles with defective transmissions seeking justice from Ford than with our firm, Stern Law.
Contact us today to get a claim review started for your 2011-16 Fiesta or 2012-16 Focus. Our team members have already helped thousands of people just like you initiate the review process and we know exactly what information we need to get started. We may be prejudiced, but we believe there are few if any law firms more knowledgeable than our firm and its co-counsel in dealing with issues related to the DPS6 transmission.
We’re looking forward to helping you. It’s time for you to benefit from the Stern Law experience, and to eventually put this Ford problem in your rear view mirror.