SAN FRANCISCO — One year ago, attorneys emerged from a California judge’s chambers and announced a historic, pro-consumer settlement of a lawsuit accusing Ford of producing millions of defective vehicles prone to stalling.
But not one consumer has benefited from the accord, which at the time of its Oct. 25, 2001 signing was thought to have ended seven years of combative litigation between the Dearborn, Mich., automaker and lawyers hellbent on suing Ford and protecting the public.
Instead of reimbursing its customers who paid or will pay about $200 to replace thick film ignition or TFI modules that fail, as the agreement requires, Ford and plaintiffs’ attorneys are defending their settlement before a state appellate court here.
Attacking the settlement, which could cost Ford more than $2 billion, are attorneys who did not participate in the case but are nevertheless objecting to the deal on the grounds it jeopardizes public safety and should be redrafted.
Among other complaints, the objectors say the deal allows some 12 million Ford vehicles — that could stall at any time — to remain on the nation’s roads.
Yet Ford and the attorneys suing the company aren’t budging on their deal.
They say the deal was the best result given that Ford has repeatedly denied it sold defective vehicles, and was willing to challenge in the courts any findings that its vehicles were defective.
A California judge ordered that 12 million Ford vehicles be recalled after concluding they were defective.
Last year’s settlement, which nullified the recall, came two months after it was reported that at least 11 deaths and 31 injuries were blamed on stalling Ford vehicles and the disclosure of internal Ford memos showing the automaker had evidence its ignition design could make hot engines suddenly fail.
The lawsuit challenged Ford’s placement of the TFI module, which regulates electric current to the spark plugs.
From 1983 to 1995, in 29 models, including the popular Taurus, Mustang, Escort and Ranger, the ignition module was mounted on the distributor near the engine block, where it was exposed to high temperatures. According to internal documents, Ford had designed it this way to save up to $2 per vehicle and increase fuel economy.
Without the agreement, Ford would have appealed the unprecedented recall order, and each side was not willing to wait years for a final decision that would make or break their case, lawyers connected to the case say.
Jeff Fazio, the lead attorney here who sued Ford and agreed to settle, has defended the deal since it was signed as a compromise a year ago.
He said the real motivation behind the objecting lawyers is they want a piece of the $22 million in attorneys fees the deal awards to Fazio and the other lawyers who sued Ford.
“It’s shakedown time,” he said. He is urging the 1st District Court of Appeal to promptly dismiss their objections, and he has refused to settle with the objectors out of court.
No hearing has been set.
Berkeley attorney Lawrence Schonbrun asserts the deal leaves intact the same safety hazard that Fazio and other attorneys were fighting to get rid of — 12 million alleged faulty vehicles on the roadways.
Fazio at one time fought to have the vehicles recalled and Judge Michael Ballachey obliged. Ballachey declared Ford was living in an “Alice in Wonderland” dreamland for denying the hazards its vehicles posed.
In the end, both sides capitulated on fears that Ballachey’s unprecedented recall order might be overturned by the courts or take years to be affirmed by them.
The backroom deal, in which Ballachey labeled a “reasonable compromise,” requires Ford to reimburse current or former Ford owners who paid or will pay for a new TFI ignition device if the car stalls and was under 100,000 miles.
Schonbrun said it’s only time before somebody else is killed or maimed by a stalling Ford.
“It makes no sense to me to leave these cars on the road in light of all that class counsel has said about them without having these modules replaced,” Schonbrun said.
Ford said it isn’t willing to revisit the settlement. Richard Warmer, Ford’s attorney, said the objectors ignore that Ford denies the TFI modules are defective and, therefore, would never agree to recall them.
“Their arguments derive from an imaginary world in which plaintiffs’ allegations are not in dispute,” Warmer said.
If the appellate court nullifies the settlement, protracted litigation may begin anew.
To avoid that uncertainty, public safety groups have signed off on the accord.
“Would we have liked to get a recall? Sure,” said Clarence Ditlow, who heads the Center for Automotive Safety in Washington, D.C. “It’s not a perfect world.”