The Ohio Court of Appeals overturned a ruling from last year that the Ford Motor Company must pay $2 billion to commercial truck dealers who claim they were overcharged by the company for more than a decade. The appellate court ordered a new trial for the class-action case after ruling the trial court judge had erred in excluding evidence presented by Ford.
The lawsuit, filed in 2002, claims that Ford cheated the dealers out of some $800 million in profits from 1987 through 1998 by offering secret discounts in violation of its agreements to sell commercial trucks at published prices. Last June, the trial court upheld a $4.5 million verdict that a Cleveland jury awarded to one Ohio dealer and ruled that Ford also must pay damages and interest to about 3,100 other dealers.
“Ford was entitled to show that offering all dealers across-the-board discounts on every truck it sold would have been economically unfeasible,” Court of Appeals Judge Kenneth A. Rocco wrote in the decision. The opinion also described the contract that the dealers said Ford had breached as “ambiguous.”
The plaintiffs had hired experts who examined 475,000 transactions and calculated that dealers paid an average of $1,650 more than the price that Ford should have charged them. In some cases, the dealers were overcharged by up to $15,000, while in others they paid less than the experts said they should have, they argued. The dealers said Ford set wholesale prices on the trucks, which included tractor-trailers, that were higher than what buyers were willing to pay for them. Ford then kept each dealer in the dark as to how much Ford was discounting trucks to other dealers and as a result the prices that dealers paid for identical trucks varied widely.
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