SAN FRANCISCO (CN) - Ford must face claims that it sold cars with rear suspension defects that wore out tires prematurely between 2005 and 2011, the Ninth Circuit ruled Wednesday.
Lead plaintiff Margie Daniel sued the automaker in a warranty class action, claiming that Ford Focuses made within those model years have a defect that causes premature tire wear, leading to "safety hazards such as decreased control in handling, steering, stability and braking" as well as "the threat of catastrophic tire failure," according to the three-judge panel's opinion.
The plaintiffs claim that Ford knew or should have known about the defect and failed to disclose it to consumers.
A federal judge ruled for Ford, finding that the plaintiffs failed to show reliance or that the vehicles became unmerchantable within the duration of the implied warranty, but the Circuit reversed the ruling.
Writing for the panel, Senior District Judge Donald Molloy of Montana, sitting by designation, said that a precedent case Mexia v. Rinker Boat Co. "does not create a deadline for discovering latent defects or for giving notice to the seller," and that plaintiffs therefore can state a claim for breach of implied warranty.
As to the claims for breach of express warranty, Molloy again sided with the plaintiffs, turning to the warranty's language.
He said that Ford reads the warranty such that it "only guarantees against manufacturing defects," and the plaintiffs read it such that "the defects that are guaranteed against include design defects."
Since Ford's express warranty is ambiguous, Molloy said the district court should not have found for the company on the express warranty claims.
"Unlike the warranties in the cases cited by Ford, Ford's express warranty is not simply a 'materials and workmanship' warranty, as it references defects that are introduced during the 'design' process," he said.
Molloy also agreed with the plaintiffs on their unfair competition claims, finding that the plaintiffs "offered sufficient evidence to create a genuine issue of material fact as to the second subelement of reliance - whether they would have behaved differently if Ford had disclosed the alleged defect."
Because the plaintiffs presented evidence that they "interacted with and received information from sales representatives and authorized Ford dealerships prior to purchasing their Focuses," the evidence is "sufficient to support a factual finding that plaintiffs would have been aware of the disclosure if it had been made through Ford's authorized dealerships," Molloy said.
"Since plaintiffs have sufficient evidence to establish a plausible method of disclosure and to establish that they would have been aware of information disclosed using that method, there is a genuine issue of material fact as to whether they in fact relied on Ford's omissions in purchasing the Focus," he said.
Eric Grant, who represented the plaintiffs from the firm Hicks Thomas in Houston, said in an email that "we are pleased that the Ninth Circuit recognized the seriousness of plaintiffs' multiple claims against Ford for selling them automobiles with defective, and defectively unsafe, suspensions."
He added, "We look forward to returning to the district court and certifying a class of more than 82,000 California consumers who unknowingly purchased what Ford's own engineer called a 'tire eater.'
"Ford fixed the defect on recent models of the Focus. This ruling should impel it to do the same for earlier models like those owned by plaintiffs and their fellow class members."
Ford's attorney did not immediately respond to an email requesting comment sent Wednesday morning.
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