Ford 2014 Annual Report Download - page 30

Item 3. Legal Proceedings (Continued)
CLASS ACTIONS
In light of the fact that very few of the purported class actions filed against us in the past have ever been certified by
the courts as class actions, in general we list below those actions that (i) have been certified as a class action by a court
of competent jurisdiction (and any additional purported class actions that raise allegations substantially similar to an
existing and certified class), and (ii) likely would involve a significant cost if resolved unfavorably to the Company.
Medium/Heavy Truck Sales Procedure Class Action. This action pending in the Ohio state court system alleges that
Ford breached its Sales and Service Agreement with Ford truck dealers by failing to publish to all Ford dealers all price
concessions that were approved for any dealer. The trial court certified a nationwide class consisting of all Ford dealers
who purchased from Ford any 600-series or higher truck from 1987 to 1997, and granted plaintiffs’ motion for summary
judgment on liability. During 2011, a jury awarded $4.5 million in damages to the named plaintiff dealer and the trial court
applied the jury’s findings with regard to the named plaintiff to all dealers in the class, entering a judgment of
approximately $2 billion in damages. We appealed, and on May 3, 2012, the Ohio Court of Appeals reversed the trial
court’s grant of summary judgment to plaintiffs, vacated the damages award, and remanded the matter for a new trial.
The retrial in September 2013 resulted in a verdict in Ford’s favor. On February 7, 2014, the trial court granted plaintiffs’
motion for a new trial, but on December 11, 2014, the Ohio Court of Appeals reversed the order granting a new trial and
reinstated the verdict in Ford’s favor. Plaintiffs have sought further review in the Ohio Supreme Court.
OTHER MATTERS
Brazilian Tax Matters. Three Brazilian states and the Brazilian federal tax authority have levied substantial tax
assessments against Ford Brazil related to state and federal tax incentives Ford Brazil receives for its operations in the
Brazilian state of Bahia. All assessments have been appealed to the relevant administrative court of each jurisdiction.
For each assessment, if we do not prevail at the administrative level, we plan to appeal to the relevant state or federal
judicial court, which would likely require us to post significant collateral in order to proceed. Our appeals with one state
and the federal tax authority remain at the administrative level. In the other two states, where three cases are pending,
we have appealed to the judicial court and to date we have not been required to post collateral.
Transit Connect Customs Ruling. On March 8, 2013, U.S. Customs and Border Protection (“CBP”) ruled that Transit
Connects imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable to
cargo vehicles, rather than the 2.5% duty applicable to passenger vehicles. As a result of the ruling, CBP (1) is requiring
Ford to pay the 25% duty upon importation of Transit Connects that will be converted to cargo vehicles, and (2) is seeking
the difference in duty rates for prior imports. Our protest of the ruling within CBP was denied and we filed a challenge in
the U.S. Court of International Trade (“CIT”). A decision by CIT may be appealed to the U.S. Court of Appeals for the
Federal Circuit. If we prevail, we will receive a refund of the contested amounts paid, plus interest. If we do not prevail,
CBP would recover the increased duties for prior imports, plus interest, and might assert a claim for penalties.
ITEM 4. Mine Safety Disclosures.
Not applicable.
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