Dec. 20, 2002 – The territory will benefit from a $51 million lawsuit settlement by Ford Motor Co., according to Attorney General Iver Stridiron. The settlement, announced Friday, includes all 50 states, Washington, D.C., Puerto Rico and the Virgin Islands.
Each state and territory will get $300,000 as its portion of the settlement, Stridiron said.
The lawsuit claims stemmed from thousands of rollover accidents involving the Ford Explorer sport utility vehicle and defective Firestone tires. The tires were recalled in August 2000.
At least 271 traffic deaths on the mainland were linked to the failed tires. Stridiron said there have been no such deaths in the Virgin Islands, but several non-fatal rollovers on St. Croix, where traffic moves faster than on St. Thomas, St. John and Water Island, may have stemmed from blowouts of faulty Firestone tires.
The suit alleged that:
– Ford practiced deceptive trade practices in selling and advertising the company's line of sport utility vehicles.
– Ford failed to disclose a known safety risk concerning tire failures with certain Firestone ATX and Wilderness AT tires that were part of the original equipment on some SUV's.
– Ford's advertising misled consumers as to the safe use of the sport utility vehicles.
– Ford claimed that certain aftermarket tires sold through its "Around the Wheel" program were the same as the tires that came on Ford SUV's, when that was not true.
Ford Motor Co. denied any wrongdoing in its settlement of the case.
"This investigation was about fair advertising and consumer safety," Stridiron said. "Ford recognizes the value of consumer education and has now accepted the responsibility of raising consumer awareness about SUV safety."
In a statement on Ford's Web site, Dennis Ross, vice president and general counsel, said the automaker was pleased to work with the jurisdictions to resolve any lingering concerns from the tire recall.
"As a result of the agreement, Ford will lead the industry with new consumer information initiatives and funding for consumer education by the states with respect to all SUV's, not just those built by Ford," Ross said.
Stridiron said the territory also will be included in a $30 million educational outreach program to teach people how to drive SUV's safely. Ford must provide safety information about cargo loading and vehicle handling to each person who buys a Ford SUV. It also must provide Spanish-language owners' guides upon request.
While this major suit is settled, individuals still have the right to sue Ford.
Stridiron said about $40,000 to $50,000 of the territory's $300,000 will go into the Attorney General's Crime Prevention Prosecution Fund. That money is used for such things as transporting witnesses and defendants, extraditing prisoners, and seed money to join national suits such as this one. The remainder will go into the territory's General Fund, he said.
The Ford settlement comes about a year after the states and some territories entered into a $41.5 million settlement with Bridgestone/Firestone Inc., the company that manufactured the defective tires. That suit alleged that Ford continued to use the tires even after the company knew they had an unacceptably high failure rate and that using them made Ford SUV's more likely to roll over.
Stridiron said the Virgin Islands got $550,000 from that settlement, with $50,000 of it going into the Crime Prevention Prosecution Fund and the rest into the General Fund.
Ford spent $2 billion to replace tires in 53 states and territories.
Stridiron said the territory was a party to these suits because of his membership in the National Association of Attorneys General. What's more, he said, it was his membership in the organization as well as its executive committee that bumped the territory's share of the national tobacco settlement several years ago up to $50 million from between $25 million and $30 million.
Guam, American Samoa and the Northern Marianas, all U.S. territories, did not get any money from the Ford settlement because their attorneys general do not belong to NAAG, he said.
He said his membership costs the territory $9,000 a year.
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