Automotive News - October 27, 2008 - (Page 25) OCTOBER 27, 2008 • 25 Court overturns class-action status in Blue Oval suit Eric Freedman freedma5@msu.edu Class warfare Issue: Should a lawsuit filed by dealerships claiming that Ford’s defunct Blue Oval program violated federal and state laws retain class-action status? Where it stands: U.S. Court of Appeals says no, finding insufficient similarities among Ford franchisees to warrant class status. The stores have asked the court to reconsider. Court in Newark, N.J., that gave class status to potentially thousands of Ford and Lincoln-Mercury dealers. That means the dealerships that A U.S. appeals court has denied class-action status to a lawsuit filed in 2000 by nine dealerships, which claimed that Ford Motor Co.’s performance-based Blue Oval program violated federal and state laws. The 3rd U.S. Circuit Court of Appeals unanimously found insufficient similarities among Ford franchisees to warrant class status. The new ruling overturns a January 2007 decision in the U.S. District sued can litigate only their individual claims in the New Jersey federal court case, Ford spokeswoman Marcey Evans said. “We’re pleased that the court agreed that class certification is not appropriate with a program that affected dealers in different ways,” Evans said in an interview. She added that the suit is the only pending litigation challenging the program. The Blue Oval program ran from 2000 to 2005 to promote dealer performance and customer satisfaction. It offered cash bonuses and other benefits, including higher after-warranty adjustment allowances, transportation assis- tance, a 401(k) program for dealers’ employees and reduced tuition for finance and insurance courses. The suit by nine dealerships from nine states accuses Ford of violating federal dealer rights and state franchise laws, along with price discrimination, breach of contract and bad faith. In an opinion written by appeals Judge Jane Roth, the court emphasized differences among Ford franchisees that would be included in a class-action suit, as well as differences among state franchise laws. “Some dealers benefited, while others were harmed,” the court said of the program. For example, some certified dealers were eligible and others were ineligible for incentives, and some certified dealers lost sales to other dealers. Although all claims arose from the same program, they involve a “variety of actions” by Ford, the court said. The plaintiffs’ lawyers did not return phone calls seeking comment, but Evans said the dealerships have asked the appeals court to reconsider its decision. The dealerships in the Blue Oval suit are in Arizona, Delaware, Iowa, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey and New York.c 2 major lemon-law lawyers lose right to practice in Md. Eric Freedman freedma5@msu.edu ACS Tops NADA Survey The founding partners in one of the country’s most prominent lemonlaw firms, Kimmel & Silverman, have lost the right to practice in Maryland for failing to properly supervise the attorney who mismanaged their office in that state. The decision by the Maryland Court of Appeals prohibits the firm from operating in that state under the firm’s name or representing clients in the state, according to the state Attorney Grievance Commission. The ruling sheds light on the operations of Kimmel & Silverman, of Ambler, Pa., a high-volume firm representing plaintiffs in automotive warranty and lemon-law cases. The firm has offices in Delaware, Massachusetts and New Jersey and also services cases in Ohio, Vermont, Rhode Island, New Hampshire and Washington, D.C., according to its Web site. Melvin Hirshman, the commission’s counsel, told Automotive News that each state in which the Kimmel & Silverman partners are licensed has been notified of Maryland’s punishment. It is up to individual states to determine whether the lawyers should be sanctioned there, Hirshman said. Robert Silverman and Craig Kimmel issued a statement that said in part: “We have always accepted that the acts of our associate were the responsibility of the firm. What we may respectfully disagree with about the court decision is based upon the record. Because it has been more than three years since these events occurred, and it would be counterproductive to challenge the ruling, we will not do so.” Missed deadlines The decision reveals much about the firm’s internal workings, including quotas for the cases each staff lawyer handles, the amount of fees each must generate and the fact that Kimmel & Silverman settles about 99 percent of its cases filed against manufacturers. The court said some senior lawyers have “up to 1,000 or more cases assigned to them.” And it cites a firm memo: “Every lawyer shall make certain that when he or she is on vacation or holiday, the settlements for the weeks before and after are not forgotten. The attorney must make up the missing week/days settlements so the average income per week is still expected.” The disciplinary case arose from the 2004 hiring of what the court characterized as a “relatively inexperienced” associate, Robin Katz, as the sole lawyer in a new office in Owings Mills. She was given a “weekly benchmark” of filing at least 15 new suits and generating at least $10,000 in fees from settlements. But Katz quickly found herself in over her head. The decision quotes a supervisor’s e-mail to Katz that said, “No excuses, don’t call, no need to talk, just get on it and only call me with good positive news of settlements or demands you are going to make.” But Katz, among other shortcomings, failed to meet pretrial discovery deadlines in dozens of cases against Nissan and Toyota, leading to dismissal of 47 client cases, the appellate decision said. At one point, Kimmel complained that Katz wasn’t settling cases with manufacturers other than Ford and Chrysler and ordered her to send at least 30 “substantive letters,” not form letters, to opposing counsel. Katz abruptly quit the firm after less than a year and was disbarred for misconduct, including fabricating correspondence. The grievance commission charged the partners with violating ethics rules requiring adequate supervision of their staff and adequate communication with clients. And the court said, “The harm suffered by clients was egregious.” In their statement to Automotive News, Silverman and Kimmel said all affected cases were resolved soon after they learned of the problem, and “most clients were made whole far faster than if their cases continued in litigation.” “Numerous warning or alert indicators should have informed the partners and managing attorneys of the need for more heightened supervision,” appeals Judge Glenn Harrell Jr. wrote. The Maryland court cited other factors requiring heightened oversight, including the high-volume firm culture and the fact that Katz worked in a distant office and was a new employee. Silverman and Kimmel said remedial changes make it unlikely that such problems will recur. Because Kimmel and Silverman are out-of-state lawyers and not licensed in Maryland, the suspension denies them all privileges associated with practicing there, the court said. The decision lets them apply for reinstatement after 90 days. Silverman and Kimmel’s statement said current clients in Maryland can choose other lawyers during the suspension period.c # Overall Dealership Satisfaction 1-800-227-8187 1 800 227 8187 Prompt 5 www.ACSaccess.com ACS ACCESS® – The Complete DMS Automotive Computer Services, Inc. Mobile, AL WARNING! November 1 Red Flag Deadline. Sign up with MenuVantage! You get Unlimited FREE RED FLAG checks! • • • • • • • Compliance with 26 Identity Theft Guidelines 24/7 monitoring of federal & state regulations Continuous compliance updates Free e-contracting Integrated Service Menu Integrated Bi-weekly program Route One integration Join more than 9,000 users nationwide (Plus over 60 major providers!) using our web-based menu sales tools to add hundreds of millions in worry-free Sales, F&I and Service profits! Lack of oversight In upholding the misconduct allegations, the Court of Appeals acknowledged that the firm eventually resolved the problems and mitigated the impact on its clients. But the court concluded that the partners had failed to carry out their responsibility to oversee Katz before her resignation. MVAN-022_6x5RedFlagAdAN.indd 1 PROFITS DELIVERED CALL TOLL-FREE TODAY! 1.877.MENUVAN (1.877.636.8826) sales@menuvantage.com • www.menuvantage.com 9/19/08 10:03:16 AM http://www.ACSaccess.com http://www.ACSaccess.com http://www.menuvantage.com http://www.menuvantage.com
Table of Contents Feed for the Digital Edition of Automotive News - October 27, 2008 Chrysler dealers under GM? States would rule Survey: Worried dealers flee GMAC Va. dealers turn to local credit unions Anxiety over Chrysler: Deal or no deal? Ford, GM execs join panels looking at eco-friendly options Big pickups, SUVs gain share Chrysler will cut 4,300 salaried jobs by year end BMW seeks joint vehicle electronics effort Runkle: Give tiny suppliers a chance VW goal: 80% N.A. content for Tenn. plant April Wortham China's BYD plans U.S. hybrids Lucky Icahn lost Lear Mahindra's U.S. launch to get $60 million ad drive Toyota may renew no-interest loans Hesterberg, Thomson will address congress Desperate industry begs feds for help Hyundai dealers want ads to pitch favorable loans Toyota, GM top global r&d spending After Detroit 3 take back design, supplier sitting pretty Germany's Preh supplies F-150 ventilation part Buehler is Volt supplier Freescale: New infotainment chip Are they too big to fail? A goal for GM: Buy back full control of GMAC Tax credit would move domestic cars GMAC loan bonus is a bad idea Take a good look: Toyota is losing its halo What flexibility is and what it isn't Toshiba joins battery battle Personnel Hyundai slows Ala. output of Sonata, Santa Fe Picture this LaNeve: GM marketing budget faces '09 hit Hyundai counts on luxury, hybrid hopes Keogh: Audi belongs with top luxury brands Dealers Court overturns class-action status in Blue Oval suit 2 major lemon-law lawyers lose right to practice in Md. Auctions offer more online for just-in-time dealers Used-truck prices higher in September Lack of used Minis limits certified program Wood trim maker expects to avoid worst of woes VW: U.S. may get Scirocco after all Ford's new F-150 is built for jobs, not jaunts Think of it as GPS for tools Feds look at China-made valves on Ford tires Shareholder value tumbles in 3rd quarter Shareholder value tumbles in 3rd quarter Ford truck marketing exec: Hybrid pickup 'publicity stunt' Survey: Ford Motor reliability improves Chrysler heir: Get back to basics Farley has bright idea to boost auction action Kerkorian speeds away from autos Names familiar? NADA leadership is a family affair Mitsubishi bucks trend on profits New trade debate in the works? Beware the 'vital' deal Automotive News - October 27, 2008 Automotive News - October 27, 2008 - (Page Intro) Automotive News - October 27, 2008 - (Page Bellyband1) Automotive News - October 27, 2008 - (Page Bellyband2) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 1) Automotive News - October 27, 2008 - Va. dealers turn to local credit unions (Page 2) Automotive News - October 27, 2008 - Chrysler will cut 4,300 salaried jobs by year end (Page 3) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 4) Automotive News - October 27, 2008 - VW goal: 80% N.A. content for Tenn. plant April Wortham (Page 5) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 6) Automotive News - October 27, 2008 - Hesterberg, Thomson will address congress (Page 7) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 8) Automotive News - October 27, 2008 - Toyota, GM top global r&d spending (Page 9) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 10) Automotive News - October 27, 2008 - Freescale: New infotainment chip (Page 11) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 12) Automotive News - October 27, 2008 - GMAC loan bonus is a bad idea (Page 13) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 14) Automotive News - October 27, 2008 - What flexibility is and what it isn't (Page 15) Automotive News - October 27, 2008 - Hyundai slows Ala. output of Sonata, Santa Fe (Page 16) Automotive News - October 27, 2008 - Picture this (Page 17) Automotive News - October 27, 2008 - Picture this (Page 18) Automotive News - October 27, 2008 - Picture this (Page 19) Automotive News - October 27, 2008 - LaNeve: GM marketing budget faces '09 hit (Page 20) Automotive News - October 27, 2008 - Hyundai counts on luxury, hybrid hopes (Page 21) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 22) Automotive News - October 27, 2008 - Keogh: Audi belongs with top luxury brands (Page 23) Automotive News - October 27, 2008 - Dealers (Page 24) Automotive News - October 27, 2008 - 2 major lemon-law lawyers lose right to practice in Md. (Page 25) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 26) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 27) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 28) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 29) Automotive News - October 27, 2008 - Lack of used Minis limits certified program (Page 30) Automotive News - October 27, 2008 - VW: U.S. may get Scirocco after all (Page 31) Automotive News - October 27, 2008 - Feds look at China-made valves on Ford tires (Page 32) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 33) Automotive News - October 27, 2008 - Ford truck marketing exec: Hybrid pickup 'publicity stunt' (Page 34) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 35) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 36) Automotive News - October 27, 2008 - Survey: Ford Motor reliability improves (Page 37) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 38) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 39) Automotive News - October 27, 2008 - Beware the 'vital' deal (Page 40)
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