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Ford shares fall after $2B judgment in dealer suit
Class Action |
2011/06/13 19:19
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Ford Motor Co. shares sank early Monday after an Ohio judge said the automaker had to pay nearly $2 billion in damages to thousands of dealerships who participated in a 2002 class-action lawsuit. But the shares pared their losses as several analysts downplayed the news and said Ford can absorb the damages even if loses a planned appeal.
Cuyahoga County Common Pleas Judge Peter Corrigan in Cleveland issued the ruling based on a Feb. 11 jury determination that the company overcharged dealers for commercial trucks over 11 years. The $2 billion award covers more than 3,000 dealerships and about 474,000 trucks. It includes a judgment of about $781 million and about $1.2 billion in interest.
Ford is appealing the decision. Ford chief counsel David Leitch said Monday that it will likely take several years for the case to wind its way through the Ohio appeals system.
Standard and Poor's reiterated its "Buy" rating on Ford Monday afternoon, saying that if Ford loses the appeal it would be "costly but absorbable," with Ford taking a hit of around 47 cents per share. Barclays Capital analysts also reiterated a "Overweight/Neutral" rating and said they don't expect a significant impact to Ford's cash position in the near term because of the length of the appeals process.
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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