Lemon Law Blog | The Lindsey Report

Ford Focus/Fiesta Transmission Settlement

Ford is had a serious problem with these transmissions for years, and been denying it all the while. They have been selling approximately 200,000 of these vehicles per annum, at about $25,000 each. The settlement allows them to dodge liability and settle these cases out en masse, for a few hundred dollars and the vast majority of cases. For a significant number of people, this will amount to waiving all of your rights under the lemon law, for pennies on the dollar. The class counsel on the other hand will receive more than $8 million. "Ford will pay their attorneys’ fees and costs of up to $8,856,500".

Every single consumer who does not have a pending lawsuit against Ford for violation of the lemon law, and who does not opt out, will lose any right to sue them for reimbursement of the full price they paid for the car. Additionally, the settlement appears to give them the "right" to arbitrate the case with Ford. Every consumer in California has that right now. This is completely illusory. In fact it gives you even less rights. Under California law the decision of the "arbitrator" is binding on Ford, but not on you. You would still have the right to then take Ford to court if you were not pleased with the decision. This settlement takes that right away. Unfortunately, the vast majority of the consumers will be swept up into this settlement without any knowledge that it is happening. If however, you want to know more about your rights, give me a call.

In the meantime, you have very little time in which to "opt out" of the settlement. It must be postmarked by September 5, 2017. This is from the section of the class notice on how to exclude yourself from the settlement. 


If you have not filed a lawsuit against Ford based on alleged problems with your PowerShift Transmission, and you do not want to be part of the Settlement, you may exclude yourself or “opt out” of the proposed Settlement Class by submitting a request to do so in writing. In that request, you must state your name, address, and telephone number, along with the model, model year, and VIN number of your vehicle. You must also specifically and unambiguously state your desire to be excluded from the Class in Vargas v. Ford Motor Co., and you must sign and date the request. If you are represented by counsel, your counsel must also sign the Request for Exclusion. You must mail this request to the Claims Administrator at the following address:
Ford Transmission Settlement, P.O. Box 404000, Louisville, KY 40233-4000.

Your request must be postmarked no later than the date indicated. If you wish to exclude yourself from the Class, you must do so with respect to all Class Vehicles you own(ed) or lease(d). If you choose to exclude yourself, you will not be entitled to any of the Settlement benefits, but you will keep your individual right to sue Ford for problems relating to your PowerShift Transmission. See Question 48 below for additional details regarding Requests for Exclusion.

48. What if I don’t want to participate in the Settlement?
If you do not want to receive benefits from the Settlement and want to retain your right to sue Ford about problems with your Class Vehicle’s PowerShift Transmission, then you must actively remove yourself from the Settlement Class. You may do this by asking in writing to be excluded from, or opt out of, the Settlement. You must mail a letter or other written document to the Claims Administrator. Your request must include:
 Your name, address, and telephone number;
 The model, model year, and VIN number of your Class Vehicle(s);
 A specific and unambiguous statement that you desire to be excluded from the Class in Vargas v. Ford Motor Co.; and
 Your personal signature and the date you signed (and if you are represented by counsel, your counsel must sign the Request for Exclusion as well).
You must mail your exclusion request, postmarked no later than September 5, 2017, to KCC at Ford Transmission Settlement, P.O. Box 404000, Louisville, KY 40233-4000. If you wish to exclude yourself from the Class, you must do so with respect to all Class Vehicles you own(ed) or lease(d). You cannot exclude yourself from the Class with respect to some Class Vehicles and include yourself in the Class with respect to other Class Vehicles.


Certified Used Vehicles

The BMW Certified Pre Owned Vehicle Program.

“Certified preowned” does not really mean much. It’s basically a marketing scheme between the dealers and manufacturers. The dealer pays the manufacturer a fee, and the manufacturer lends its name. This allows the dealer to market a run-of-the-mill used car as "certified". BMW’s Certified Pre Owned BMW Vehicle Program is typical. All that happens is that the dealer pays a “certification fee”, certifies it, and sells it. There is nothing special about the automobile. The dealer performs basically the same "inspection" for the certified vehicle that it does for any used vehicle that comes on the lot.

For example, my client bought a certified preowned BMW from a local BMW dealer. What the dealer did not tell her was that it had a defective High-Pressure Fuel Pump. It twice failed for the prior owner and they tried to repair it but were unsuccessful. He traded it in and they turned around and certified it and sold it to my client, with the same defect. But, they did not tell her that. They also did not tell her that the dealer, BMW of San Diego had actually wrecked it themselves while it was in for repair for the 1st owner.

During the 2 years that my client owned the car it was in the shop 12 times. the High-Pressure Fuel Pump failed 3 times, leaving her stranded on the freeway. She had to call and have it towed in. Even though BMW issued a warranty as part of the certified preowned program, when we brought a lemon law claim, BMW tried to deny the warranty. It claimed that the car was the subject of a mass class action lawsuit called Nguyen v. BMW, Case No. CV10-2257, for the same problems that left her stranded on the side of the road 3 times. Clearly BMW knew about the defect, and had hundreds if not thousands of complaints before it certified the car and sold it to my client.
We filed a lawsuit under the California lemon law and were successful in getting the car repurchased and forcing BMW and its dealer to pay a substantial civil penalty.

BMW does little or nothing to supervise the certification process, and its dealers do not follow BMW’s own policy guidelines;

It is BMW NA policy that the selling center must provide the purchaser of any BMW, whether New, CPO or pre owned with full disclosure (see Forms page 76) of any known information about the vehicle. Strict adherence to this full disclosure policy is a sound business practice that will contribute to customer satisfaction. More importantly, full disclosure is a legal requirement in most states in the United States, as well as a BMW Group policy requirement. This disclosure must include (but not be limited to) previous paint and body damage repairs, prior repurchase/trade assistance, or any other such relevant information available to the selling center. (Emphasis added.)

BMW Certified Preowned Center Operations Manual

Under their own policy, this car should never have been certified. BMW of San Diego leased the vehicle to the prior owner, serviced it, wrecked it, and repaired it. The car broke down on the original owner 3 different times for the same problem that my client had, i.e., failure of the High Pressure Fuel Pump, leaving her stranded by the side of the road. They had full knowledge of the times the car broke down, and the repairs they made to it, before they certified it and resold it.

Research shows that used vehicle buyers overwhelmingly prefer purchasing "certified" pre owned cars and trucks sold by new vehicle retailers. BMW's goal is to satisfy this demand with a premium class of pre owned BMW passenger cars and SAV/light trucks, (collectively referred to hereinafter “vehicles”). The Certified Pre Owned BMW Vehicle Program provides the tools necessary for centers to expand their pre owned vehicle business and to generate additional revenue to their Service and Parts operations. (Emphasis added.)

BMW Certified Preowned Center Operations Manual. (Obtained through discovery.)

However, when my client notified BMW by letter of the problem and asked them to correct it, their response was to deny everything, including the warranty that they issued as part of the certification. The Certified Pre Owned BMW Vehicle Program belongs to BMW, but it leaves the certification to the dealers, and BMW conducts very little oversight. What it does do is collect fee ranging from $1250 to $2950 per vehicle.

24 Q. About how many certified used vehicles does BMW
25 of San Diego sell a month?
1 A. Fifty to sixty.
2 Q. How much does BMW of San Diego pay to BMW per
3 vehicle for certification?
4 Objection, relevance. You can still
5 answer.
6 THE WITNESS: From twelve hundred sixty dollars to
7 twenty-nine hundred fifty depending on the model.
Deposition of General Manager, June 11, 2014, 5:24 - 6:7.

Assuming a low average of $1500 per vehicle, and assuming 50 vehicles per month, that means BMW makes $75,000 per month in certification fees, approximately $900,000 per annum, from BMW of San Diego alone. Just for lending its name. Multiply that by BMW’s approximately 338 dealerships in the United States, and it is more than $300 million per annum. BMW is profiting hugely for little or nothing. This is the same business model followed by nearly every manufacturer with a "certified preowned" used car program.

How to Buy a Car

NEVER buy from a corner used car lot.

NEVER lease a car. Its more expensive and your rights are fewer. It is like the difference between owning your house or renting.

San Diego Lemon Law Center | The Law Office of Michael E. Lindsey
Tel: (858) 270-7000 Fax: (858) 270-7710 | 4455 Morena Blvd., Ste. 207 San Diego, CA, 92117 (see map)

General Information Only

The information in the San Diego Lemon Law Center pages is for general information only and is not intended to be taken as legal advice. If you have a specific legal question or problem, please feel free to contact us or you should promptly consult with an Attorney handling such matters in your area for advice.