Bloomberg News

Ford Overcharged Truck Dealers, Jury Told at End of Trial (1)

September 10, 2013

Ford Motor Co. (F:US) broke pricing contracts and overcharged commercial truck dealers for years, a lawyer said at the end of the retrial of a case that previously resulted in a $2 billion judgment against the carmaker.

Ford, obligated by sales and service agreements to publish all prices, offered secret discounts to selected dealers, James Lowe, a lawyer for the dealers said in his closing argument in state court in Cleveland. That left the dealers excluded from discounts paying higher prices for vehicles, hurting their profits, he said.

“If you promise a published price to the dealer then you have to give the dealer a published price,” Lowe told the jury. The published price is “the only protection” that a dealer is “playing on a level playing field,” he said.

Cuyahoga County Judge Peter J. Corrigan awarded $2 billion, including about $1.2 billion in interest, to a class of about 3,000 dealers in 2011. A state appeals court ordered a new trial last year, finding Corrigan improperly excluded evidence that might have helped the company. The dealers are seeking $2 billion again, plus additional interest.

Ford has denied any breaches or overcharging. The company had also asked Corrigan, who is conducting the new trial, to reverse his 2005 decision allowing the dealers to pursue the claims as a group. Corrigan rejected the request today.

‘Standard Contract’

“It’s a standard contract,” he said. “All dealers are subjected to it. Ford treated all the dealers the same.”

Ford lawyers will give the company’s closing argument later today.

Ford used a competitive price assistance program that provided discounts to some individual dealers to help them make sales, James Feeney, a Ford lawyer, said in his opening statement at the trial last month. The contract didn’t bar such discounts, and all dealers had equal access to the program, he said.

The dealers sued Dearborn, Michigan-based Ford in 2002, claiming the company’s beach of the agreement to sell trucks at published prices forced them to pay more from 1987 through 1998.

The case is Westgate Ford Truck Sales Inc. v. Ford Motor Co., CV 02-483526, Court of Common Pleas, Cuyahoga County, Ohio (Cleveland).


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