By Andrew Ganz
Monday, Jun 13th, 2011 @ 1:14 pm
 
A spat between Ford Motor Company and thousands of commercial truck dealers prompted a judge in Cleveland to demand that the automaker make a $2 billion payment for damages as part of a settlement for a nearly 10-year-old class action suit.

The court ruled that Ford violated more than 3,000 dealership agreements in 2002 by overcharging its outlets for about 474,000 trucks. The judgment is for $781 million but it also includes a hefty $1.2 billion in interest. The automaker said in a statement last week that it plans to appeal the ruling.

UPDATE: Following a slight dip in stock prices, Ford has issued additional clarification regarding its stance and view on the judge's ruling. David Leitch, Ford's general counsel explained, "The evidence we presented at trial showed clearly that the former Competitive Price Assistance program - which was a common practice formerly used by companies selling in the extremely competitive medium- and heavy-truck market - resulted in thousands of additional sales benefiting our customers and dealers, and it did not violate our agreement with dealers."

Leitch went on to explain why Ford in particular disagreed with the way the judge went about establishing the total amount to be paid, "We believe among the most egregious errors was the decision to apply alleged damages from this one case to each and every dealer in the class without allowing any evidence of how other dealers might have been affected."

"We believe that the trial court committed significant legal errors. Ford will appeal the judgment and we are confident that it will be reversed," the automaker's statement said.

The class action suit included all dealers that purchased a Ford F-600-series truck between 1987 and 1997 and it says that Ford failed to tell its dealers that some outlets received price concessions as part of a complex wholesale discount scheme called CPA. The suit alleged that Ford used the system to unfairly benefit some dealers at the expense of others by overcharging some showrooms and secretly discounting other outlets.

The suit was filed by Youngstown, Ohio-based Westgate Ford Truck Sales, Inc., which was awarded $4.5 million in damages and $6.7 million in interest.

References
1.'Judge in Ohio...' view