Recently, several aggrieved customers filed a class action lawsuit against Ford Motor Company in federal court, the Southern District of West Virginia. They claimed that the Ford vehicles that they purchased, in the years between 2002 and 2010, had problems with sudden acceleration, with no means of overriding to prevent crashes.
The customers, represented by West Virginia vehicle accident attorneys and attorneys in other states, argue that the Mustang, Explorer, and Mercury Cougar lacked a braking system to override the electronic throttle control system. Ford began installing such a system from 2010 onward. The customers claim that between 2002 and 2010, Ford could have, and should have, taken action to prevent accidents that were foreseeable. Furthermore, Ford allegedly engaged in unfair and deceptive business practices, in that it deceived reasonable customers into believing that Ford vehicles were safe and reliable. The customers relied upon Ford’s representations, and as a result, suffered damage. They seek both compensatory and punitive damages.
There are two notable aspects of this case: not only is it a class action lawsuit, but it is also a federal lawsuit. In order for this lawsuit to proceed in court, it had to meet certain requirements. As a class action, the lawsuit must have numerous injured parties (usually 40 or more); the injury must be sufficiently common to all of the parties; the “class representative” must adequately protect the interests of the class; and there are no conflicts of interest between class members. As a lawsuit qualifying for federal court, the issue must involve either a federal question (such as a violation of federal law or a treaty), or it must have (1) diversity (no plaintiff occupies the same state as the defendant) and (2) an amount in controversy above $75,000. It appears that this case is in federal court for the second reason.
In some ways, it is almost surprising that this case could even be litigated. Many large companies have become savvy at inserting arbitration clauses into consumer contracts, which state that if the consumer has a problem, the consumer waives the right to litigation and agrees to have the matter heard at an arbitration proceeding in the company’s chosen forum. Most arbitrators are chosen supposedly for their “expertise” in the field, but they are not former judges or even lawyers, so they may not have much knowledge of the law. Moreover, the desire for business might make the arbitrator subconsciously biased toward the company. Yet arbitration awards, once handed down, are difficult to appeal in court.
Over the years, the United States Supreme Court has been very insistent that the Federal Arbitration Act of 1925 (FAA) preempts any state laws governing contract arbitration clauses. If that is the case, what can be done to give the consumer, usually at such a great disadvantage, any relief? One small exception carved out of the FAA is when an agreement is found to be the product of unconscionability (unequal parties or “surprise”), duress, or undue influence. So many courts will void an arbitration clause in situations deemed to be unconscionable.