Litigation

Ford Explorer Rollover Coupon Settlement -- Coupons Gathering Dust

By Bruce Nye

    More than a year ago, CalBizLIt blogged -- no, not just blogged, whined and ranted -- about the coupon settlement in the Ford Explorer Cases, JCCP Nos. 4266 and 4270.  Fundamentally, CalBizLit hates coupon settlements.  CBL, which generally believes in the civil justice system,  thinks these settlements provide no social benefit and that the y are a spectaculrly cynical method of throwing crumbs to class members while paying millions to class counsel.  My point is this:  if the class action has merit, then class members should get something real.  If the class action is worth nothing more than coupons, then it likely shouldn't have been filed in the first place and the attorneys shouldn't get anything.

    So to summarize, plaintiffs claimed that Ford had failed to disclose  that Explorers had a high center of gravity, making them prone to roll over and therefore unsuitable as family vehicles.  Every single owner was allegedly damaged by the difference between the value of the vehicle if it was as advertised, and its true value (an amount estimated at $1,000 per vehicle).  The case was based on our old statutory friend, California's Unfair Competiition Law.  UCL Practitioner had more details here.

    Their lawyers got a class certified.  Trial was under way.  The parties settled.  Each class member was to get a coupon worth $300 to $500 toward the purchase of a new car.  Plaintiff attorneys were to get $25 million in fees. According to the Sacramento Bee, Clarence Ditlow of the Center for Auto Safety weighed in as follows:  "They should pay the lawyers in coupons."

    So now the AP reports on how that whole coupon distribution thing worked out.  Total value of coupons distributed to date:  $37,500.  Yep, that's somewhere between 75 and 125 coupons for all of that.  And the attorneys' defense?

    Right.  That was sure worth $25 mil.  More coverage:  Wall Street Journal and  Paul Elias.

Full post as published by CalBizLit on August 04, 2009 (boomark / email).