ASKED & ANSWERED: James P. Feeney on Westgate Ford Truck Sales Inc. v. Ford Motor Co.

By Steve Thorpe

Legal News

James P. Feeney scored a major victory for Dykema client Ford Motor Company in a jury verdict announced in the Court of Common Pleas of Cuyahoga County, Ohio, on Sept. 11. The case, Westgate Ford Truck Sales Inc. v. Ford Motor Co., is a class action suit initiated in 2002 by a Youngstown, Ohio, Ford truck dealer on its own behalf and as the representative of 3,200 Ford dealers. Westgate claimed that Ford breached the Sales and Service Agreement (SSA) with its authorized dealers through the operation of a Competitive Price Assistance (CPA) program. The original $2 billion judgment was five times higher than the largest-ever jury award against Ford in a lawsuit, according to data compiled by Bloomberg News. During the course of his nearly 40-year career, Feeney has been involved in more than 1,500 cases, 70 of which he has tried to verdict.

Thorpe: Tell us about the trial and verdict. Did it unfold as you expected?

Feeney: The trial lasted 3 1/2 weeks. A verdict in Ohio requires six out of eight jurors to agree. The jurors agreed that there was no breach of the franchise agreement and returned a defense verdict after about six hours of deliberations. The trial was very intense; every day was a full day of testimony. There are always surprises in any trial but certainly the themes that both sides presented were anticipated. One unusual aspect of this trial was jury selection, which took several days because the trial judge engaged in an extensive, individual voir dire of every juror in the venire.

Thorpe: The original case was tried in 2011 and resulted in a class-wide verdict of nearly $2 billion. Ohio's Eighth District Court of Appeals reversed that verdict and ordered a new trial. Can you tell us a bit about the original trial and reversal?

Feeney: Sure, although neither I nor our firm was involved in the first trial. Both sides had filed motions for summary judgment, arguing that the contract meaning was clear and unambiguous. It should be noted that the franchise agreement was governed by Michigan law so all of the important legal issues were decided under Michigan case law and jury instructions in both trials. On the eve of trial, Judge Corrigan granted plaintiffs motion finding that Ford had breached the agreement and ordering the case to trial on causation and damages only as to the class representative.

The jury awarded the full amount of the damages sought and thereafter the judge extrapolated the verdict and awarded approximately $784M in class damages. With interest the judgment exceeded $2B. The 8th District Court of Appeal in Ohio reversed, finding that the contract was ambiguous and remanded the case for a new trial on liability and damages.

The court also made a number of statements concerning the admissibility of various categories of evidence, all of which the court said were admissible.

Thorpe: What were the possible implications for other auto manufacturers if Westgate had prevailed?

Feeney: On the factual side, this would depend entirely upon the language of other OEMs' franchise agreements and their specific discount/pricing practices, but Ford's practice was consistent with its competitors and all of them had some form of individual deal discounting similar to the Ford program. The legal rulings at both the appeal court and trial construed Michigan contract law and would be of interest to any Michigan practitioner.

Thorpe: These big legal efforts often involve a team. Can you tell us something about yours?

Feeney: You are right about that. The lawyers were Clay Guise and Lisa Brown. We inherited a file with 300 boxes of hard copy documents, 69 depositions, a complete trial transcript , related litigation spanning a 23-year history, conduct that occurred 15 to 25 years ago and a mountain of briefs that was staggering. In nine months, Clay and Lisa dissected all of this data, developed themes and mapped our strategy. If I was the quarterback, they were my offensive and defensive coordinators. We have done it before and our ability to work together and with other lawyers was key. And we had a great legal assistant, John Regan who knew every aspect of the file. We also worked with local counsel in Ohio, Tucker Ellis and appellate counsel, O'Melveny and Meyers. Plus the outstanding support we received from inside Ford. All in all a great team effort.

Published: Tue, Oct 15, 2013