Ford Sues California Law Firms Over Alleged Lemon Law Fraud

In some U.S. states, lemon laws exist as a way to help consumers in the event that they purchase a vehicle and it winds up having defects serious enough that they can’t be rectified following a reasonable number of attempts. The terms of these laws do vary state by state, but generally, provide a little peace of mind for those that wind up getting stuck with, well, what one might consider to be a “lemon.” However, Ford is now suing a series of California-based law firms, alleging that they were using these lemon laws in an illegal manner for their own financial gain.

According to the Los Angeles Times, Ford is suing a number of prominent law firms, alleging that they engaged in a sophisticated fraud scheme to collect upwards of $100 million in “phantom legal fees” via the Song-Beverly Consumer Warranty Act, or California’s specific lemon law. Ford claims that the lawyers named in the lawsuit violated the Racketeering Influenced and Corrupt Organizations (RICO) Act by working in unison to commit this fraud over a period of years.

In the lawsuit, Ford alleges that these lawyers claimed to have worked more hours on these types of cases than they actually did, which is notable given the fact that California’s lemon law requires automakers to cover those expenses. It claims that one of those firms – Knight Law Group – “billed more than 20 hours per day on at least 66 occasions, 34 of which exceeded 24 hours, including an ostensibly heroic but physically impossible 57.5-hour workday in November 2016.”

“When you look at any single legal bill for a single case it might show only one or two hours for a given lawyer on a given day – nothing to draw suspicion,” said Edward McNally, a former federal prosecutor and lawyer for Ford at Kasowitz Benson Torres. “However, when Ford searched across public filings, as alleged in the complaint, the conduct in this case was carried out through a sophisticated and unlawful enterprise of attorneys and law firms that spread their fraudulent and inflated bills across thousands of cases and against many auto makers.”