Ford rollover settlement provides more to lawyers than class members

Michelle Massey, East Texas Bureau Jul. 20, 2009, 2:00pm

In a class action involving rollovers in Ford Explorers, attorneys from Beaumont's Provost Umphrey Law Firm received about $1 million in legal fees � only a small share of the total $25 million of attorney's fees and costs � but the lawyers still received more than the class members they represented.

Originally valued at $500 million, the settlement of the class action is costing Ford approximately $27 million. Ford will pay less than a million for class members, a $950,000 donation to the Automotive Safety Research Institute for research into protecting passengers in rollover accidents and $25 million in attorneys' fees and costs.

The case, filed in the state court in California, alleged that Ford concealed a dangerous design flaw that increases the tendency of Ford Explorers to roll over, and thereby misled consumers to buy, lease or pay more for Explorers than they should. The lawsuit only included economic damages and excluded personal injuries or wrongful death claims.

Consumers from Texas, Illinois, Connecticut and California who leased or bought 1991 to 2001 Ford Explorers were included in the class. According to the settlement agreement, the class members were entitled to a coupon worth $500 toward the purchase of a new Explorer or $300 discount on the purchase of another model Ford, Lincoln or Mercury.

At the time of the 2007 settlement, parties believed the agreement would cost Ford Motor Co. as much as $500 million in future discounts on Ford vehicles. However, of the approximately one million potential class members, only 1,693 certificates will be issued, costing Ford at most $846,500. In a report filed with the California state court in June, only 75 of the vouchers have been redeemed, costing the automaker as much as $37,500 in discounts.

The settlement also provided a $10,000 incentive fee for named California plaintiffs, $5,000 for named and deposed Texas, Illinois and Connecticut plaintiffs and $2,500 for non-deposed named plaintiffs.

Ford denies the allegations and states that the handling characteristics of sport utility vehicles are fully disclosed through the vehicles' government-mandated warning labels and manuals. It also states that class members have not lost money or paid too much for the vehicles due to any alleged design defect. Ford points out that the class action is not claiming that the Explorer is more likely to roll over than other comparable vehicles

The California class action resolved the Texas class action filed by Terri Shields, which had similar allegations. The Shields case was originally filed in Judge Donald Floyd's 172nd District Court in Jefferson County.

According to court records, no attempt to certify the class was made due to changes in Texas certification law. An objector to the California settlement noted that "the case in Texas would not get this far."

Terri Shields was also the lead plaintiff in the class action against Bridgestone/Firestone, which alleged that the recalled Firestone tires had a tendency to fail. The 2004 settlement was valued at $149 million but also provided little value to members of the class.

The class included an estimated 10 million to 15 million people who owned or leased recalled or investigated Firestone tires. It did not include personal injury, wrongful death, or property damage claims.

Although the recall and replacement programs were completed prior to settlement, the settlement provided eligible class members the opportunity to replace recalled or replacement tires that were still in use on their vehicle. Firestone agreed to replace those tires without charge fit the vehicle was brought to Firestone Tire Service Center.

The settlement provided $15 million for a consumer educational program focused on improving consumer awareness about tire and vehicle safety issues and $19 million in attorneys' fees and expenses.

Another $41 million was dedicated to ensure Firestone would redesign and produce safer tires, a move Firestone had already made prior to the settlement. Aside from the named 45 plaintiffs receiving $2,500 each, class members received no monetary compensation, an issue that caused many objections to the settlement agreement.

Despite resolution to some lawsuits involving economic loss, Ford is still facing many lawsuits claiming the Explorer's tendency to roll over has caused personal injuries, wrongful deaths, and property damage.

In May, a Texas jury ordered Ford to pay $10.2 million to the family of Diane Wiles, a woman who was ejected and killed in a rollover accident. The accident occurred in July 2003 when the 1996 Ford Explorer her husband was driving flipped over after a tired failed.

The Dallas jury awarded $20.4 million but only found Ford responsible for 50 percent. The jury found Wile's husband responsible for the other 50 percent, for failing to replace a tire that he knew was not functioning properly.

A Ford representative stated that, "Mrs. Wiles was ejected from the vehicle because she was not wearing her seat belt. No other vehicle would have performed better in this accident."

In addition to the Provost Umphrey attorneys, the class was represented by Elizabeth J. Cabraser of the San Francisco law firm of Lieff, Cabraser, Heimann and Bernstein LLP and New Jersey attorney Kevin P. Roddy of Wilentz, Goldman and Spitzer PA.

Other class counsel included prominent Arkansas plaintiffs' attorney C. Tab Turner, who specializes in product liability suits against automakers and was recently fined for illegally reimbursing his employees for donating to John Edward's campaign.

Sacramento County Superior Court Judge David De Alba presided over the class action.

Coordination Proceeding Special Title, Ford Explorer Cases, JCCP No. 4266/4270

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