MacDonald v. Ford: “Catalyst” Attorney’s Fees in Automotive Defect Cases

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In a recent Northern District of California ruling, Judge Tigar found that the plaintiffs, owners and lessees of certain Ford Escape Hybrid and Mercury Mariner Hybrid vehicles, were entitled to attorney’s fees after Ford Motor Company issued a recall for the very component over which the plaintiffs had recently filed suit. See MacDonald, et al. v. Ford Motor Company, No. 13-02988 (N.D. Cal., Nov. 2, 2015) (slip op. available here) (Ms. MacDonald is represented by Capstone Law APC). The court held that the plaintiffs were entitled to “catalyst fees” for causing Ford to issue the safety-related recall, finding that Ford had failed to rebut the inference that the plaintiffs’ lawsuit motivated Ford to provide the relief. This ruling should make it more difficult for automakers to sidestep consumer lawsuits by “voluntarily” recalling products as soon as suit is filed in an effort to moot the lawsuits.

California’s Code of Civil Procedure section 1021.5 provides that a court may award attorney’s fees to a “successful party” when the action has resulted in the enforcement of an important right affecting the public interest. See Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 565 (2004). To be a “successful party,” a plaintiff need not obtain a court-ordered change in the defendant’s behavior; it is enough for the plaintiff’s lawsuit to have catalyzed, or motivated, the defendant to provide the primary relief sought. Id. at 567. “To be a catalyst, the lawsuit must have been ‘a substantial causal factor’ contributing to Defendant’s conduct, though the lawsuit need not be the only cause of Defendant’s conduct.” Slip op. at 6 (emphasis added, internal citations omitted). The plaintiff bears the burden of proving he or she catalyzed the relief.

In a first for automotive class actions, where Ford issued a recall 14 months after the plaintiffs filed a class action, the court found that “the chronology of events raise[d] an inference that the lawsuit must have been ‘a substantial causal factor’ contributing to [Ford’s] decision to recall the Class Vehicles.” Slip op. at 7. According to Judge Tigar, “[o]ne month after this Court issued the order denying in part Ford’s motion to dismiss, Ford reported that it began to look into the MECP [Motor Electronic Coolant Pump] Defect. Less than six months after the Court issued the order, Ford issued a recall on the Class Vehicles.” The court rejected Ford’s proffered explanation as to why it commenced its recall investigation just after the court denied in part its motion to dismiss. Though Ford presented testimony of a data specialist who argued that his workload happened to lighten up at the same time the court issued its order, allowing him to commence the recall, the court dryly noted, “[t]his is just too much of a coincidence to be a coincidence.”

Judge Tigar also rejected another explanation proffered by Ford for the recall. Ford argued that an email from Transport Canada, a Canadian auto safety regulator, and not the plaintiffs’ lawsuit, had triggered its investigation. However, the court found it “unconvincing that an email inquiry . . . about one car stalling in a parking lot would trigger [Ford’s investigation] and subsequent recommendation to recall the Class Vehicles, even though several complaints to the NHTSA and a class action lawsuit did not.” In short, the court concluded that Ford’s evidence failed to overcome the presumption that the plaintiffs’ lawsuit had been a substantial factor in the manufacturer’s decision to initiate the recall, and granted the MacDonald plaintiffs’ motion for fees. Additional briefing regarding the amount of attorneys’ fees that Ford will owe is currently progressing.

Authored by: 
Cody Padgett, Associate