Westgate v. Ford: Ford Ordered to Pay $2 Billion in Class Action

An Ohio court has ordered Ford Motor Co. to pay $2 billion to a class of more than 3,000 Ford-franchised truck dealers who allege that Ford unfairly concealed wholesale price discounts from certain dealers, causing them to overpay for large commercial trucks.  See Westgate Ford Truck Sales, Inc. v. Ford Motor Co., No. CV-02-483526 (Ohio Ct. Common Pleas June 10, 2011) (ruling re: motions for summary judgment) (available here).

The dealers sued Ford in 2002, alleging that the company breached its agreement to sell trucks at published prices, which forced them to overpay for the trucks from 1987 through 1998 and resulted in lost profits.  Following a trial that adjudicated the claims of only the named plaintiff, Ford attempted to revive ten separate summary judgment motions and to decertify the class represented by the named plaintiff.  Judge Peter J. Corrigan rejected all of Ford’s post-trial motions; upheld a $4.5 million verdict awarded to the named plaintiff; and ordered Ford to pay similar damages, plus interest, to a class of approximately 3,000 other dealers, resulting in the roughly $2 billion total judgment.

In arguing for decertification, Ford contended that the named plaintiff had abandoned the damages model that had been the basis for class certification, and that the damages model actually used created conflicts within the certified class (thus warranting decertification).  See Id. at 5.  The court rejected both arguments, holding that the damages model proffered by plaintiffs was based upon the same methodology as the one relied upon at the certification stage, and in any event was not a source of conflict.  See Id. at 5-6. 

The damages model employed was quite straightforward, and likely has considerable application to consumer class actions alleging misrepresentations or omissions.  The court described a dealer’s damages as simply “the total of the differences between the discounts he should have received and the discounts he actually received.”  Id. at 6.  Likewise, where a consumer alleges that a manufacturer or retailer has omitted material information about a product, the determination of damages is easily amenable to class treatment as the difference between the amount that consumers paid and the amount by which the omitted information would have diminished the price of the at-issue product for a reasonable consumer.