Facts

Ford Explorer owners or lessees (model years 1991 through 2001) in California filed a class action suit against defendant Ford Motor Co. under California's false-advertising and unfair-competition laws.

PLAINTIFFS' CONTENTIONS:
Plaintiffs' counsel contended Ford misled car buyers with affirmative brand imaging falsely claiming the Explorers built in the 1990s were safe, all-purpose family vehicles. Plaintiffs' counsel contended Ford knew the Explorer's narrow build, propensity to over steer, its elevated center of gravity and its softened suspension made it prone to rollover in emergency maneuvers at highway speeds. These dangerous defects came to light during the Firestone tire recall in August 2000 and the value of each Explorer dropped by about $1,000. Plaintiffs' counsel contended that defendant attempted to conceal these defects by recommending all mounted Explorer tires be inflated at an unreasonably low 26 pounds per square inch which exacerbated the risk of a serious accident due to inherent tire tread separation propensity. The combination of defendant's brand imaging and its cover up of design defects resulted in millions of consumers purchasing or leasing Ford Explorers.

DEFENDANT'S CONTENTIONS:
Defense counsel have consistently maintained that Ford did nothing wrong. Ford Explorers had the best safety record in nationwide accident data maintained by NHTSA, passed Consumers Union's handling and stability tests throughout the decade, passed tests conducted by NHTSA and passed Ford's own industry-leading handling and stability tests. Ford also contended that there was no value decline beyond ordinary market declines during the relevant period.

Result

After 50 days of trial, the parties entered into settlement whereby approximately one million purchasers or lessees of the Ford Explorer model year 1991-2001 in California, Illinois, Texas and Connecticut, who still owned them as of Aug. 9, 2000 could apply for a voucher, good for one year. These vouchers will be worth up to $500 each toward the purchase of a new Explorer, or alternatively, $300 toward the purchase of another Ford or Lincoln Mercury vehicle. At the claimant's request, the voucher can be issued in the first instance to anyone in the claimant's state, but not for any compensation and can be used in addition to any other discounts or promotions Ford offers. Once a voucher has issued to a claimant, the claimant may transfer it to an immediate family member. The settlement also requires Ford to make available on its website for a specified time certain information about vehicle and tire safety. Ford Motor Co. admitted no wrongdoing in this settlement.