Ohio judge says Ford must pay dealers $2B

June 10, 2011 - 6:15 PM

COLUMBUS, Ohio (AP) — Ford Motor Co. must pay nearly $2 billion in damages to thousands of dealerships in a 2002 class-action lawsuit that said the automaker violated dealer agreements, an Ohio judge ruled Friday.

Cuyahoga County Common Pleas Judge Peter Corrigan issued the ruling based on a Feb. 11 jury determination that the company overcharged dealers for commercial trucks over an 11-year period.

Damages are to be paid to more than 3,000 dealerships, said James Lowe, a Cleveland attorney for Westgate Ford Truck Sales Inc., a dealership in Youngstown that represents the class.

"In awarding the dealers the amount of money they overpaid for trucks, the jury verdict places Westgate and the rest of the dealers in the financial position contemplated by the terms of the contract," Lowe said.

Ford said in a statement that the company will appeal.

"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 statement said.

Lowe said the lawsuit stemmed from a wholesale price-discount system called the CPA program and that internal documents and testimony showed the automaker used the program to shift retail revenue from the dealerships to Ford.

Ford disputes the allegation.

"We continue to believe that the CPA program caused no harm to our dealers; rather, it brought significant benefit to the dealers," its statement said.

In Ford's annual report, filed on Feb. 28, the automaker says the jury awarded $4.5 million to Westgate and that "total damages could be substantial" if similar amounts were awarded to other dealers represented by the class-action lawsuit.

The report says the judge had approved the class action, adding all dealers who purchased a 600?series or higher truck from Ford from 1987 to 1997.

It says the lawsuit accused the automaker of "failing to publish to all Ford dealers all price concessions that were approved for any dealer."

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AP Auto Writer Tom Krisher in Detroit contributed to this report.