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Federal judge says proposed MyFord Touch settlement is 'problematic' and likely won't be approved.

Posted in News

MyFord Touch Settlement Agreement Has Serious Problems: Judge
Federal judge says proposed MyFord Touch settlement is 'problematic' and likely won't be approved.

— A MyFord Touch and MyLincoln Touch infotainment system lawsuit may not be settled as soon as initially believed after the federal judge overseeing the class-action lawsuit found multiple problems with the proposed settlement.

Ford and attorneys for the plaintiffs agreed to settle the lawsuit that alleges the infotainment systems are defective. But U.S. District Court Judge Edward M. Chen says he has "serious concerns" the "problematic" settlement can ever be approved because it doesn't look like it's “fair, reasonable, and adequate" for Ford customers.

Judge Chen sees so many problems with the proposed settlement that he says Ford and the plaintiffs need to be prepared to offer new trial dates.

Saying the plaintiffs have disregarded legal guidelines set by the court, the judge lays out numerous problems he sees with the agreement, starting with the maximum value of owner claims.

While the proposed settlement talks about what owners may receive, the plaintiffs offer no estimate of the “potential recovery if plaintiffs were to prevail on each of their claims.” Furthermore, the plaintiffs never provided evidence of how many owners may be included, the maximum and minimum value of class claims, etc.

Although the proposed terms talk about MyFord Touch software upgrades, the judge says attorneys for the plaintiffs never submitted any information about the actual value of the software update.

Would Ford update the software without need of a lawsuit? And if not, what would be the normal cost to a consumer for an update of the MyFord Touch software? The judge says answers to these questions are not provided in the proposed settlement.

The judge also points out two huge problems concerning the software updates that would be offered to customers.

Attorneys for the plaintiffs don't show if the update will even fix the alleged defects named in the lawsuit. And secondly, the plaintiffs offer no information to show they have tested the performance of a software update to know if it will work.

According to the proposed agreement, Ford agreed that for one year after installation of the software update, dealers will address any software problems by confirming that the most current compatible update of the software (version 3.10 or later) is correctly installed and working properly.

"What does this mean? Does this provision require Ford to do anything beyond make software updates available for 1 year after the upgrade to v. 3.10? What happens if v. 3.10 does not cure all defects?" - Judge Chen

According to the judge, he also has questions about the value of the settlement which provides three options for customers to receive reimbursements. Ford customers can either receive compensation for MyFord Touch repairs, reimbursement for post-warranty repair costs or compensation for infotainment system problems.

However, the plaintiffs don't give any information about how many owners could be expected to recover the benefits under each category and there is no estimate of total recovery.

The judge says because of the "relatively onerous claims process," attorneys for the plaintiffs provide no expected response rate of customers filing valid claims. In addition, the judge says it appears there is no settlement fund and no guaranteed minimum payout to affected customers.

The settlement requires each class member to submit a claim with varying documentation requirements depending on the type of claim. However, the the judge says he was under the impression that Ford had good enough records to identify at least some eligible claims.

Ford earlier estimated that nearly 70 percent of California and Washington owners never sought any MyFord Touch repairs, 20 percent sought one repair, about 5 percent sought two repairs and approximately 2 percent of owners sought three repairs.

Considering what Ford had earlier said about those owners, the judge wants to know the reason these known class-action members with valid claims must jump through hoops to submit forms.

According to Judge Chen, he is being asked to rule on the fairness of the settlement with no or little information about the total number of claims deemed valid. Additionally, the judge says he is expected to make rulings without information about the total value of the settlement.

"How can the Court evaluate whether the settlement is fair, reasonable, and adequate if it does not have that information? Moreover, how can the Court evaluate the reasonableness of Class Counsel’s fee award [$22 million] without any information about the concrete benefits actually received by the Class?"

Adding to questions for the plaintiffs, the judge says they should explain why a monetary recovery of $100-500 is limited to Ford and Lincoln customers who proactively sought infotainment system repairs.

According to the proposed settlement, customers who neither sought compensation for MyFord Touch or MyLincoln Touch repairs or reimbursement of post-warranty repairs may only seek a payment of $35 if they claim they experienced at least two instances of MyFord Touch problems.

The judge wants to know how both parties arrived at a $35 valuation and the requirement that there be two unsatisfactory experiences with the systems.

"How is this settlement formula related to the damages sought in litigation? Additionally, is there a reason to require a claimant seeking this relief to submit a physical signature rather than an electronic attestation?"

Judge Chen further needs details about a customer choosing the $200-$1,000 "discount option" off the value of a future purchase of a Ford or Lincoln vehicle equipped with the newer SYNC 3 information and entertainment system.

The judge says this “discount” appears to be a “coupon settlement” that requires “class members to hand over more of their own money before they can take advantage of the coupon, and they often are only valid for select products or purchases.”

The judge also questions the attorneys' fees for the plaintiffs, as some Ford and Lincoln customers may receive as little as $35 while attorneys have requested $22 million for fees and expenses.

According to the proposed settlement, Ford says it doesn't have a problem with paying that amount, but the judge wants to know what the negotiation process was with respect to attorneys’ fees in relation to the benefits offered to customers.

Both parties must explain under oath how the amount of $22 million was reached and if the fees were negotiated simultaneously with owner benefits.

And finally, the judge has concerns with the claims process considering Ford’s total liability is contingent on the number of claims filed and the number of claims deemed valid. According to the proposed settlement, Ford will cover the costs and apparently supervise the claim administration process.

This means Ford has a financial incentive to cut costs by minimizing the number of valid claims. The judge wants to know why attorneys for the plaintiffs are just fine with receiving $22 million in fees but then allowing Ford to call the shots about the number of customers who can file a valid claim for benefits.

The MyFord Touch lawsuit was filed in the U.S. District Court for the Northern District of California, San Francisco Division - In Re: MyFord Touch Consumer Litigation.

The plaintiffs are represented by Hagens Berman, Baron & Budd, DiCello Levitt & Casey, and Chimicles & Tikellis. will update our website with results of the legal battle.


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