— A Ford Focus and Fiesta transmission lawsuit settlement has been reached after an appeals court ruled the previous settlement may not have been good enough for Ford customers.
Ford and the plaintiffs had reached a settlement agreement in 2017 and a federal judge preliminarily approved the deal. But certain Ford customers objected to the settlement agreement by claiming many Fiesta and Focus customers were getting nothing while the attorneys for the plaintiffs were receiving nearly $9 million.
The 9th Circuit Court of Appeals agreed with the objectors and found the attorney fee award of $8.8 million was "disproportionate to the class recovery and a 'clear sailing' provision whereby defendant [Ford] agreed not to object to the award sought by class counsel."
Two of the three appeals court judges ruled district courts have been warned to watch for “subtle signs that class counsel have allowed pursuit of their own self interests and that of certain class members to infect the negotiations.”
The appeals court also determined very few customers would receive any benefits from the settlement even though the federal judge had found it to be fair and adequate.
Only 8% of Fiesta and Focus customers filed claims by the deadline, and in the end two of three appeals judges ruled to “vacate final settlement approval and remand so that the district court may conduct a more searching inquiry."
This sent the PowerShift class action back to the district court where the case was argued. Now both Ford and the plaintiffs have reached another settlement agreement, although the judge must still give final approval.
Owners and lessees of 2011-2016 Ford Fiesta and 2012-2016 Ford Focus cars claim the dual-clutch PowerShift transmissions have been defective from the time the cars were sold. Drivers complain their cars jerk, lunge, hesitate and suffer downshifting problems that finally cause complete failures of the transmissions.
The National Highway Traffic Safety Administration investigated PowerShift transmission problems but didn't find an unreasonable risk to safety and found that a recall was not necessary.
Ford Fiesta and Focus Transmission Settlement Terms
The Fiesta and Focus transmission settlement will offer cash payments to Ford customers who had three or more qualifying visits to Ford dealerships to replace certain transmission components.
Payments begin at $200 for the third dealer visit and a customer may receive an additional $275 for the next dealer visit and $350 after that. The most a customer can receive is $2,325 after the eighth dealer visit.
In place of reimbursements, a customer may choose a certificate valued at twice the amount of cash payment to be used toward the purchase or lease of a new Ford vehicle.
Ford Fiesta and Focus customers who don't qualify for cash payments may qualify for payments for the third dealer visit to update the transmission control modules. A customer may receive $50 starting with the third software flash up to a total of $600 with a 7-year/100,000 mile limitation.
Based on the current settlement agreement, Fiesta and Focus customers who visited dealers once or twice will not receive any cash payments.
If a customer complained to a dealership about transmission problems but was denied repairs, Ford will pay $20 if the customer agrees to those facts under penalty of perjury.
According to the PowerShift transmission settlement, a Fiesta and Focus customer may have Ford repurchase the car if they qualify under their state's lemon law. If the customer qualifies, Ford may refund the amount paid for the car less a "reasonable allowance for use."
The settlement also creates a standard for claims that don't qualify under state lemon laws, but only under certain conditions. In this situation, the arbitrator may award a repurchase if four or more transmission hardware replacements were performed within 5 years/60,000 miles yet the vehicle continued to malfunction.
If a customer hires an attorney to handle arbitration and the customer wins, Ford will pay $6,000 toward expenses for the attorney.
The Fiesta and Focus transmission settlement may be able assist customers who have paid for repairs they believe should have been covered under warranty. The customer can enter warranty arbitration with the automaker on Ford's dime, and the arbitrator may award reimbursement, a free repair, an extension of the warranty by Ford or any combination thereof.
A Fiesta or Focus customer who owns or leases a vehicle manufactured after June 5, 2013, and who had two clutches replaced during the 5-year/60,000 mile powertrain warranty is entitled to reimbursement for out-of-pocket costs for a third clutch replacement made within 7 years/100,000 miles from the time the vehicle was originally sold.
The replacement clutch will also be covered by a two-year warranty, and a customer will also have access to Ford’s customer satisfaction program 19N08 issued in August 2019. Under program 19N08 and the previously issued program 14M01, the clutches on most vehicles are covered by an extended warranty of 7 years/100,000 miles.
Attorneys for the plaintiffs will receive $8.8 million.
The Ford Fiesta and Focus transmission lawsuit was filed in the U.S. District Court for the Central District of California: Vargas, et al., v. Ford Motor Company.
The plaintiffs are represented by Capstone Law APC, Berger & Montague P.C., and Zimmerman Law Offices P.C.
CarComplaints.com has driver complaints about transmission problems in the Ford Focus and Fiesta cars: