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Ford Settles F Series Truck Class Action
As with all relationships, business partnerships can sometimes turn out to be more trouble than they are worth. Such was apparently the case in the relationship between Ford Motor Co. and Navistar. Beginning in 1994, Ford had Navistar build every Power Stroke engine used in Ford’s F-Series. However, the diesel engines produced by Navistar resulted in dozens of class action consumer lawsuits against Ford for cars it sold with allegedly defective engines.
Ford has now agreed to settle the lawsuits outside of court, which include all of the 2003-2007 Super Duty pickups and E-series vans sold by the car company. At the center of the lawsuit is the diesel 6-liter V-8 engine which allegedly had multiple problems with the fuel system, turbochargers, and other major components. The settlement covers any consumer in the United States who purchased or leased any 2003-2007 Ford vehicle which was equipped with a 6-liter Power Stroke diesel engine and had to replace, repair, or adjust the vehicle’s exhaust gas recirculation (EGR) cooler and EGR valve, oil cooler, fuel injectors, or turbocharger before the vehicle reached 135,000 miles or six years of age.
The settlement will reportedly cover half of the full value of all of the claims made by class members in addition to $150,000, which the car company will pay to the 16 named plaintiffs of the case. The total amount of the settlement will depend upon the number of potential class members who decide to file a claim. Each component of the diesel engine has a reimbursement limit. If a class member paid at least a $100 deductible multiple times for repairs under the five-year/100,000 mile engine warranty, Ford will reimburse the consumer $50 for each deductible paid, beginning with the second deductible and going through the fifth. They will pay up to $200 covering no more than four deductible payments. All told, each consumer will be able to claim between $50 and $825 in reimbursements for repairs to their engine and engine components as a result of this settlement.
Despite the long relationship between Ford and Navistar, poor engine quality, high repair costs, and lower customer satisfaction led to the demise of that relationship. Beginning in 2010, Ford replaced the Navistar diesel engine with a new 6.7 liter diesel V-8 which the company designs itself.
Some of the failures of the Navistar 6-liter diesel engines were so severe that Ford was forced to replace entire engines. Ford also had to issue recalls which resulted in the company buying back hundreds of trucks with engines that required extensive and costly repairs. Due to all of these problems, the relationship between Ford and Navistar grew to be more costly to Ford than beneficial. They dramatically increased the warranty costs on Ford vehicles and resulted in litigation with Navistar. However, Navistar was eventually removed from the class action lawsuit which Ford has recently agreed to settle. This leaves Ford with the full burden of costs of the class action lawsuit. Because consumers grouped together in a class action they were finally able to achieve some damages for their defective trucks.
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Ford Sued in Class Action Claiming Unintended Acceleration
While Toyota’s problems with unintended acceleration in their vehicles have garnered much media attention, Toyota is hardly the only car company to experience these problems. Audi experienced similar issues in the 1980’s from which it took them a decade to recover in the American market. Honda, Jeep, Mercedez-Benz, Hyundai and Kia have all had reported issues over the years.
Most recently brought before the court with alleged unintended acceleration issues is Ford. In fact, according to the Transportation Department’s inspector general, a 2011 report revealed that Ford actually had the same number of deaths and injuries from these acceleration issues as Toyota: 374 from 2003 through 2009. Ford alone received 22% of all of the complaints regarding unintended acceleration during that period. That’s more than any other single car manufacturer.
The National Highway Traffic Safety Administration’s (NHTSA’s) data shows that complaints regarding Ford vehicles increased dramatically from 2005 to 2007. Injuries from acceleration issues peaked between 2004 and 2006.
A spokesperson for Ford though, has released a statement that the NHTSA has investigated many cases of alleged unintended acceleration over the years and has found that driver error is more commonly the cause of these accidents. They also stated that the NHTSA is much more “scientific and trustworthy than work done by personal injury lawyers and their paid experts”.
The NHTSA also could not find evidence of electronic malfunctions in Toyota vehicles in a 2011 report it did with the National Aeronautics and Space Administration. Nevertheless, Toyota recently settled a class action lawsuit for $1.1 billion to put the matter to rest. Toyota, as well as BMW, Mercedez-Benz, Audi and Volkswagen, have all begun installing brake override systems into every vehicle they make. These brake override systems will stop the car when the brake and the gas petal are activated at the same time. Ford also began installing these “brake override accelerators” into its vehicles in 2010.
Despite the fact that the NHTSA concluded that most of the Toyota alleged acceleration issues in Toyota vehicles were due to driver error, the recall of nearly 10 million vehicles and the publicity as well as the congressional hearings, have prompted the NHTSA to propose a rule which would require all vehicles to have a brake override system.
The case recently filed against Ford was filed in the U.S. District Court for the Southern District of West Virginia and includes 20 Ford owners in 14 states. The case covers Ford vehicles made between 2002 and 2010 and alleges a “design defect” in the electronic control of the gas pedals which made the vehicles susceptible to sudden, unintended acceleration. The lawsuit alleges that the vehicles should have had a brake override system and is seeking damages for the reduced value of the vehicles.
Audi Settles Class Action Claims for Allegedly Defective Transmission
Car manufacturers provide warranties for their vehicles, promising to pay for most repairs and replacements that the vehicle requires within a certain number of years of purchase of the car or up to a certain mileage. However, if enough cars experience failures of a particular variety after the warranty expires, the manufacturer could still find themselves in trouble.
Audi has found itself in that situation when a class-action lawsuit was filed against it on behalf of U.S.A. consumers who leased or bought a 2002-6 A4 or A6 model with a continuously variable transmission (CVT). The lawsuit, which was filed in January 2011, alleges that the CVTs had manufacturing and design flaws that caused them to fail and left owners with thousands of dollars in repair bills. The lawsuit also alleges that Audi knew about these flaws and intentionally concealed them from consumers.
In the preliminarily approved settlement, Audi denied the allegation that the CVTs were defective and insisted that it had “acted properly and in compliance with applicable laws and rules.” However, they also said that the expense of extended litigation “may not be in the best interests of their consumers.” Hence Audi’s settlement offer.
The settlement includes reimbursement “for certain C.V.T. transmission repairs” that occurred or will occur within 10 years or 100,000 miles of the original sale or lease of the vehicle. The original warranty covered only four years or 50,000 miles. The owners will be reimbursed for the replacement of various parts, depending on which model year they had.
The transmission control module is covered for 2003, 2004, 2005 and 2006 model year A4s and A6s. The valve body is covered for 2003-4 model A4 and A6. Replacement of the transmission without the valve body and transmission control module “is covered for the 2002, 2003, or 2004 model year Audi A4 or A6.” The settlement does not say whether it includes reimbursement of another transmission part or replacement of the entire transmission.
Some of the 2002 and 2003 models are probably beyond even the extended warranty by now, but the settlement will still reimburse the owners if the specified repair occurred within 100,000 miles or 10 years. The settlement further provides a “trade-in reimbursement cost” to make up for lost value of a 2002, 2003, or 2004 A4 or A6 that needed “a complete replacement of a C.V.T. transmission” after the normal warranty expired but the vehicle was sold or traded without repair.
The settlement does not specify whether owners in that group who had a major component fail, but did not need to replace the entire transmission, are eligible for reimbursement. It also did not indicate why the 2005-6 model year was not included in this part of the settlement.
The settlement, which covers about 64,000 Audi vehicles, was preliminarily approved on March 11 by Judge A. Howard Matz of the United States District Court for the Central District of California. The hearing for final approval has been scheduled for September.