DETROIT -- Ford dealers challenging the legality of the automaker's Blue Oval dealer certification program will get another day in court.
In what may be one of his last decisions before a possible ascension to the U.S. Supreme Court, federal appeals court Judge Samuel Alito on Monday, Dec. 19, sided with a group of dealerships suing Ford Motor Co.
Alito, a Supreme Court nominee currently sitting on the Philadelphia-based U.S. Court of Appeals for the Third Circuit, remanded the dealerships' lawsuit back to the district court level.
The 2000 challenge to Blue Oval initially had been dismissed after the district court ruled the dealerships lacked standing to sue.
The ruling means the lawsuit is right back at the beginning. But it won't necessarily go to trial. Ford could seek to dismiss it on other grounds.
But "because their complaint alleges concrete and particularized injuries that are fairly traceable to Ford's behavior and redressable in court, we reverse and remand," Alito wrote in his 13-page ruling.
The dealerships sued Ford after alleging that Blue Oval required unnecessary costs to comply with certification requirements. For instance, one plaintiff, Danvers Motor Co. in Massachusetts, says certification cost it an extra $65,000 in management expenses and $25,000 annually for another employee. Another plaintiff, Senator Ford in Delaware, claimed losses of $116,360 in maintenance, additional employee hours and other items.
Alito ruled that because the dealerships claimed specific financial damages, they indeed have standing to sue.
"Plaintiffs alleged that the (Blue Oval program) illegally caused them economic injury and a loss of control over their dealership activities," he wrote.
Alito didn't rule on whether those damages are legitimate or on the legality of Blue Oval. That's now up to the district court to determine.
Eric Chase, a lawyer who argued before the three-judge appeals court panel on behalf of the dealerships, called the ruling "a magnificent decision." He intends to seek class-action status for the case in the "near-term."
The dealerships are Danvers Motor Co. in Massachusetts; Augusta Ford in Maine; Concord Ford-Lincoln-Mercury in New York; Fette Ford in New Jersey; Senator Ford in Delaware; Roseville Midway Ford in Minnesota; Fullers' White Mountain Motors in Arizona; Condon Ford in Iowa; and Tilton Ford in New Hampshire.
A Ford spokeswoman also would not comment except to say the ruling sends the case back to the beginning.
Ford significantly revamped the Blue Oval program in April 2005. It cut dealership bonuses nearly in half by replacing the Blue Oval reward with a bonus tied to sales performance. Dealerships need not be certified to receive the new bonus.
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