Ford Lacks ‘Avenue’ to Compel 3G Telematics Claims to Arbitration, Say Plaintiffs

Despite Ford’s best efforts to “shoehorn” its demand for arbitration into one of several vehicle purchase or lease agreements signed by the four plaintiffs in the class action against the automaker, “the overwhelming weight of precedent and the plain language of the agreements do not permit it.” So said the plaintiffs’ opposition Monday (docket 3:22-cv-01716) in U.S. District Court for Southern California to Ford’s June 30 motion to compel their claims to arbitration and stay the case pending the outcome of that arbitration (see 2307030014).

The four plaintiffs allege Ford built its vehicles with obsolete telematics equipment and didn’t tell consumers, causing them to lose functionality of their FordPass roadside assistance and other connected services when major carriers like AT&T discontinued 3G wireless in 2022. Ford contends the four “repeatedly agreed” to arbitrate claims against the automaker.

Ford can’t enforce arbitration through sale or lease contracts with dealers and financiers “to which it was not a party to,” said the plaintiffs’ opposition. Numerous courts in California already considered, and rejected, Ford’s arguments “that agency, equitable estoppel, or the third-party beneficiary exception should apply to allow a car manufacturer to enforce the arbitration clause in dealer purchase and lease agreements,” it said. All three exceptions are “inapplicable” in this case because the plaintiffs’ claims are unrelated to their purchase or lease agreements, it said.

The FordPass agreement is the one contract that Ford cites where it did directly contract with the plaintiffs, said the opposition. But the “plain terms” of that agreement don’t provide “any avenue for Ford to compel arbitration,” it said. Contract interpretation starts with the plain language, and there’s no “explicit” provision in the FordPass agreement to arbitrate any disputes, it said.

The plaintiffs, like all U.S. consumers, “have a constitutional right to bring civil disputes to a judge and a jury of their peers,” said the opposition. Those rights can be waived by agreement, it said. But Ford “must provide evidence of an arbitration agreement it can enforce that covers this lawsuit” before it can cut off the plaintiffs’ access to the court, it said: “Ford has produced no such evidence. That should end the debate.”

Ford’s written manufacturer’s warranty contains “extensive boilerplate, spanning more than 40 pages,” said the opposition. “Ford’s lawyers and executives clearly thought long and hard about these terms,” it said. But the warranty terms don’t contain any clause purporting to require the plaintiffs “to waive their rights to a jury trial or to participate in arbitration for their claims against Ford,” it said.

The warranties instead “briefly describe a dispute resolution process” that’s required for claimants seeking remedies under the Magnuson-Moss or their applicable state’s lemon law, said the opposition. The process is optional for claimants seeking remedies under other laws or statutes, it said. Ford’s new vehicle warranty “states in no vague terms that the optional arbitration is not final and binding,” it said.

Ford “unilaterally drafted” its own nonbinding arbitration language, said the opposition. Yet now it seeks to enforce the arbitration provisions from third-party dealership agreements “without ever mentioning its own arbitration agreement,” it said. That omission is an “obvious concession” that its own arbitration provision “offers no support” for its motion to compel, it said.