FREQUENTLY ASKED QUESTIONS
1. WHAT IS THE STATUS OF THE CASE?
After litigating the case for a significant period, Class counsel and Ford spent months negotiating a classwide settlement. Throughout the litigation and negotiation, Class counsel have worked with the participation of the putative class representatives - ambulance companies from five states. The settlement covers ambulance companies from throughout the United States.
The settlement agreement was finalized and presented to the Court which granted preliminary approval of the settlement on February 20, 2009. Official Class Notice of the settlement, which is available on this website, is now being mailed out and the mailing will be completed by May 8, 2009. The final approval hearing is currently scheduled for July 2, 2009 in Beaumont, Texas.
2. WHY HAVEN'T I BEEN TOLD ABOUT THE SETTLEMENT AGREEMENT UNTIL NOW?
We have endeavored to respond to all inquiries we have received from ambulance owners. During the course of settlement negotiations we have conferred with the 5 ambulance owners who are putative class representatives, as well as other clients, but we could not include the thousands of potential class members in day-to-day decisions in the litigation, or in settlement negotiations.
This Class Notice, available on this website, explains how you can obtain benefits from the settlement once it is approved, and how you can object to, or exclude yourself from, the settlement agreement. If you choose to object, you will be able to share your concerns about the settlement with the Court before the Court decides whether to grant final approval to the settlement. If you choose to exclude yourself from the settlement class, you will obtain no relief from the settlement but you will retain your rights to sue Ford on your own.
The Class Notice is your official notice of the settlement agreement.
3. WHAT BENEFITS DOES THE SETTLEMENT PROVIDE?
The following is a broad outline of the benefits provided by the settlement agreement:
A. Warranty Extension to Cover Future Repairs.
Ford will extend the coverage period of the 60-month/100,000-mile limited written repair-or-replace warranty that covers the engine and powertrain components in the Class Vehicles to 72 months/120,000 miles (whichever comes first). The extension to this warranty will run with the vehicles.
Each "Covered Component" - fuel injectors, EGR valve, A/C compressor, or turbo charger -- that received two or more repairs or replacements under the original 60-month/100,000 mile powertrain warranty will receive extended warranty coverage for up to 72 months/150,000 miles (whichever comes first) that will cover the cost of repairing or replacing that component. For purposes of this benefit, two repairs or replacements of fuel injectors will qualify all eight fuel injectors for the extended warranty coverage.
B. Prior and Future Engine Replacements.
If, within the first 72 months after the vehicle is placed in service, it is established that the entire engine in the vehicle must be replaced due to a malfunction caused by a defect, as opposed to customer abuse, improper maintenance, or normal wear and tear, Ford will pay (or, if such engine replacement has already occurred, reimburse) 50% of the out-of-pocket expenses of such engine replacement that occurs between 120,000 and 135,000 miles, and 25% of such expenses of an engine replacement that occurs between 135,000 and 150,000 miles.
C. Reimbursement for Prior Repairs.
Ford will establish a claims process by which Settlement Class members can seek reimbursement for out-of-pocket expenses incurred performing Otherwise Warranted repairs of malfunctions in Class Vehicles that occurred within the period covered by the warranty extensions identified above.
"Otherwise Warranted" means repairs or replacements of component parts made when the vehicle (a) was between 60 and 72 months in service (provided that it had no more than 120,000 miles at the time), or (b) had between 100,000 and 120,000 miles (provided that it had no more than 72 months in service at the time) that were deemed to have malfunctioned due to defects in material or workmanship under normal use, or (c) that were made to a Covered Component up to 72 months and 150,000 miles (whichever comes first) under the terms described above. It does not include routine maintenance or vehicle repairs necessitated by customer abuse or misuse. Proof of payment, mileage, repair on a Class Vehicle, as well as proof that it was a warrantable repair will have to be submitted by the Settlement Class member with the claim.
"Out-of-pocket expenses" includes the expenses and labor charges (including reimbursement for parts and the reasonable value of the time spent by employees performing the repair). "Out-of-pocket expenses" does not include consequential damages such as lost revenue/profits or lost employee time from loss of use of the vehicle, towing charges or other costs of transporting the vehicle to or from the place of repair.
D. Towing Charges.
For each unit that has incurred towing costs more than twice during the 60-month/100,000 mile powertrain warranty period due to engine malfunction, Ford will reimburse the actually incurred, reasonable costs of the third and all subsequent tows for that particular unit that occurred during that original powertrain warranty period. The Settlement Class Member will have the burden of presenting satisfactory proof of eligibility for, and amount of, this benefit.
E. Deductibles.
For each unit that has incurred $100 deductibles under the 60-month/100,000 powertrain warranty more than twice due to engine malfunction, Ford will reimburse the costs of the third and all subsequent deductibles paid for that particular unit under that warranty.
F. Enhanced Maintenance Package. Ford will:
(1) establish a hotline for ambulance owners to provide them with an efficient way of getting assistance directly from Ford when they have problems with their dealership repairing their engines.
(2) send each Settlement Class member, free of charge, an instructional DVD entitled "Ford 6.0L Power Stroke Diesel Maintenance Special Operating Circumstances," which explains the necessary maintenance procedures for ambulances containing 6.0 liter diesel engines;
(3) offer to install free of charge, at a Settlement Class member's request, an hour meter in each Class Vehicle that does not currently have one;
(4) offer to implement, free of charge at a Settlement Class member's request, a previously established computer adjustment to improve the performance of the air conditioning system on each Class Vehicle that has not already received this adjustment.
G. Disputes.
Any disputes concerning Settlement Class members' claims will be resolved by BBB Auto Line, or another mutually acceptable dispute resolution service, pursuant to the procedures described in Ford's warranty information booklet with any decision by BBB Auto Line/other dispute resolution service binding upon all parties.
4. WHAT DO I GIVE UP BY PARTICIPATING IN THIS SETTLEMENT
In exchange for the consideration outlined above, those who do not exclude themselves from the settlement will release all claims based on the 6.0-liter diesel engines in the Ford Ambulance Prep Package chassis. This release, just like the settlement benefits, will run with the vehicle if the Settlement Class Member sells the vehicle. Settlement Class Members who sell a Class Vehicle will be instructed to inform subsequent purchasers of the settlement terms -- both the benefits and release of claims. A description of the settlement terms will be printed as an insert to be affixed to the Warranty booklet of each covered Class Vehicle.
5. WHAT DO THE 5 PUTATIVE CLASS REPRESENTATIVES GET?
Under the settlement agreement, the five putative class representatives, who participated in this litigation will be entitled to the same benefits as all other members of the class. In addition, Class Counsel will ask the Court to award them a total of $35,000 to share, in recognition of the time and effort they have expended to pursue this litigation (including providing extensive documentation to Class Counsel, consulting with Class Counsel throughout the litigation and settlement negotiation, submitting key personnel to being deposed by Ford, making their ambulances available for inspection, and lending their names to this litigation).
6. HOW MUCH DO I HAVE TO PAY THE CLASS COUNSEL FOR THEIR REPRESENTATION OF THE CLASS IN THIS CASE?
You do not have to pay Class Counsel anything for the expenses they incurred in this litigation, the time they expended in representing the class, or for anything else. Class Counsel will apply to the Court for an award of fees and expenses to be paid by Ford, not by you. Furthermore, any award of fees and expenses to Class Counsel will not reduce the benefits described above. Class Counsel will apply for an award of $3.6 million. Because Class Counsel estimate that the total settlement is worth in excess of $30 million, the award would constitute less than 12% of the settlement value, which is a lower percentage than usually awarded in class actions of this type.
7. WHEN WILL THE SETTLEMENT GO INTO EFFECT?
At this point, we do not know. Before the settlement can go into effect, the Court must grant final approval to the settlement, and the final approval must become a final non-appealable order.
8. HOW CAN I OBTAIN SETTLEMENT BENEFITS
Once the settlement becomes final, you will immediately be able to (a) bring your ambulance unit to your local Ford dealership to obtain any repairs covered by the extended warranty provided by the settlement, and (b) submit your claim for reimbursement of past expenses covered by the settlement to the claim center. Details are in the Class Notice.
9. WHAT ABOUT THE DAMAGES I'VE SUFFERED THAT ARE NOT COMPENSATED BY THE SETTLEMENT?
We understand that this is not a perfect settlement and that it does not reimburse you for all the damages you have suffered as a result of these 6.0-liter diesel engines. However, as in all settlements, you can never obtain everything you want or believe you should get. We've been working hard on these negotiations and we believe we obtained all Ford was willing to offer. We had to consider what we could have reasonably expected to obtain had we litigated this case through trial and any appeals. This required us to consider the defenses Ford would have raised (including the fact that Ford's limited warranty limits the damages you can receive as a result of a defective product), the time it would have taken to obtain a judgment and go through the appeal process, the economic situation of the auto industry, and other factors. After comparing the benefits provided by this settlement to the prospects of continuing to pursue the litigation against Ford, we believe this is an excellent settlement. Of course, if you disagree, you have the right to exclude yourself from the settlement class and pursue your claims against Ford on your own. However, we suggest you consider the matter very carefully before choosing that option.
10. WHO ARE CLASS COUNSEL AND WHO CAN I CONTACT WITH QUESTIONS?
Class counsel are the firms of Caddell & Chapman; Weller, Green, Toups & Terrell; and Page, Wolfberg & Wirth. If you have questions, you can call Cory Fein, one of the attorneys at Caddell & Chapman, at 713.751.0400, or email him at csf@caddellchapman.com.
