Ford dealers winners in latest court battle

“The fact that Ford is appealing the decision of an appeal court indicates the lengths to which the company will go to prevent dealers from becoming a class,” said Sonja Falkenberg, the association’s lawyer and director.

The Toronto Star
May 25, 2000

Ford dealers winners in latest court battle
But auto giant to appeal decision on class action
Tony Van Alphen

Ford dealers have won the latest round in a fight over claims that auto giant is hurting their businesses by turning all Lincoln Mercury outlets into Ford stores.

A divisional court appeal panel has ordered certification of a class-action lawsuit by dealers against Ford, the country’s third-biggest auto maker.

The decision in the Ontario Superior Court of Justice overturns a lower court ruling that held it would be simpler and more efficient if one or more dealers launched their own claims.

But Bobbie Gaunt, president of Ford Motor Co. of Canada Ltd., said in a message to dealers that Ford is appealing the latest ruling to the Ontario Court of Appeal.

She did not disclose reasons for the appeal. The company has not yet filed submissions in court.

An official for the Canadian Ford Dealers Association said it is clear the company is stalling and fears the consequences of a trial.

“The fact that Ford is appealing the decision of an appeal court indicates the lengths to which the company will go to prevent dealers from becoming a class,” said Sonja Falkenberg, the association’s lawyer and director.

“We’re disappointed that Ford is in effect stalling the trial from proceeding by further appealing this crystal-clear decision.”

Ford’s dealers argue the company broke its franchise agreement

The dispute started last fall when the Oakville-based auto giant turned all of its Lincoln Mercury dealers into Ford stored in efforts to promote brand awareness.

Many existing Ford dealers said it would reduce their business.

Four dealers initiated legal action by arguing Ford breached their franchise agreements because the company allowed new Ford outlets within 15 kilometres of existing stores without market research justifying the move.

The dealers sought class-action status on behalf of all dealerships so they could seek a declaration at trial that Ford could be liable for any losses.

A favourable decision for dealers would allow them to pursue damages without needing to prove Ford’s liability in each case.

In the latest ruling, the appeal panel said a test case involving a few dealers would determine common issues if the parties would bind themselves to a decision.

Ford indicated, however, it would not make a commitment to be bound by a decision that would apply to other dealers later.

“Only a class proceeding will bind the class and Ford and avoid multiplicity of proceedings and the associated risk of inconsistent results,” said the decision written by Mr. Justice Dennis O’Leary.

Meanwhile, the Canadian Automobile Dealers Association has not set a date for a meeting of the country’s 565 Ford dealers to discuss strategy for battling the company on the name change and other complaints.


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