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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Ford Must Defend Suit |Over Advertising Claims

(CN) - WHITE PLAINS, N.Y. (CN) - A class-action accusing the Ford Motor Company of lying to consumers about the fuel economy of two of its hybrid cars will proceed, a federal judge ruled.

The class action, which has since been consolidated with other cases, was filed in the Manhattan Federal Court in February 2012. It alleges purchasers of Ford's C-MAX and Fusion model vehicles were enticed to do so by an advertisement campaign that falsely claimed the two cars had higher fuel efficiency than they actually did.

In 2013, Ford launched an advertising campaign for its Fusion and C-MAX automobiles, boasting of the hybrid cars' 47-mile-per-gallon fuel efficiency on both city and highway roads.

The campaign, featuring Ryan Seacrest and Ford's CEO, included 47-day challenges to engage with Ford's social media help promote what the auto company called "the most fuel-efficient midsize sedan in America."

Partly as a result of the campaign, Ford increased its market share of hybrid cars to 16 percent. But the plaintiffs allege the campaign was "highly misleading," as soon thereafter various news organizations found the C-MAX and Fusion could achieve, at best, only 40 miles per gallon.

In addition to damages, the lawsuit seeks to enjoin Ford from selling the two cars, reimburse current owners, and cease the advertising campaign. The suit also alleged that Ford's software upgrades, intended to further improve the MPG of the cars, did not work as advertised.

Ford responded by arguing that fuel efficiency standards are regulated by the Environmental Protection Agency, and that the advertising of such is overseen by the Federal Trade Commission. Federal preemption would thus make private lawsuits redundant, Ford had argued.

But U.S. District Judge Kenneth Karas largely shot down that argument Nov. 12.

"The question of whether advertisements related to [fuel efficiency] were misleading is a question conventionally left to the courts to answer," he wrote in an 82-page opinion.

"It stands to reason that Congress did not intend to protect car manufacturers that may have falsely advertised facts about their vehicles," Karas continued, noting that Ford went beyond mere disclosure when advertising the vehicles' supposed 47 MPG.

Ford argued -- correctly, the court found -- that the federal Environmental Policy and Conservation Act preempted private right of action when it came to MPG.

It also argued that the plaintiffs' false advertisement claims should have been preempted because of judicial precedent, which found federally mandated disclosure language could not be used as the basis of false advertisement lawsuits.

On this point Karas agreed only in part, ruling that Ford's advertising blitz went beyond merely showing the EPA-mandated MPG for the two cars. "Any allegations that go beyond the mere disclosure-with appropriate caveats-of the estimated fuel economy of the vehicles go beyond the scope of the EPCA," he said.

Ford went on to argue that plaintiffs had failed to prove they bought their cars based on the Ford advertising campaign. On that point, the court sympathized somewhat with Ford, dismissing claims that did not rely specifically on the advertisements. The plaintiffs have 30 days to amend the complaint with regard to that issue.

Ford's ad campaign was designed to carve into the market share owned by the Toyota Prius, which has a range of 44 miles per gallon.

"Ford knows that fuel efficiency sells vehicles, particularly hybrid vehicles, and they simply went too far with their advertising in order to sell cars," said plaintiffs' attorney Mark Dearman in a statement.

He added that the ruling confirms automakers cannot use EPA estimate disclaimers to immunize themselves from false advertising lawsuits.

Ford's attorney, Joel Dewey of DLA Piper, did not immediately respond to an emailed request for comment from Courthouse News.

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