Ford files shocking $300 million RICO lawsuit

Ford is hitting back at a surprising defendant for a nine-figure sum.

May 23, 2025 - 15:32

Ford files shocking $300 million RICO lawsuit

Back in 1970, California passed the Song-Beverly Consumer Warranty Act.

The law protects California car buyers, and other consumer types, from buying faulty vehicles.

The law ensures that every retail sale of consumer goods in the state is accompanied by certain implied warranties and limits retailers from voiding those warranties.

Song-Beverly is one of the strongest consumer protection laws in the country. Retailers sued under the law must reimburse litigation costs and attorneys' fees.

So if you buy a car from Ford that is a lemon, the car manufacturer could be required to buy back or replace your vehicle if, after a “reasonable” number of repair attempts, no solution is found.

As one might imagine, people looking to game the system can sometimes abuse such a strong consumer protection bill.

The number of Lemon Law claims filed has soared in recent years. "These numbers are even more dramatic in California due to the Song-Beverly Act and its fee-shifting provisions (which creative plaintiffs’ attorneys may use as leverage against manufacturers)," according to Manufacturing.net.

The auto industry, which comprises most of the Song-Beverly Act claims, faced nearly 15,000 warranty complaints in 2022 and even more in 2023.

This week, Ford decided to fight back against this rising tide with a shocking lawsuit.

Ford is going to court to pursue a RICO lawsuit.
Image source: Shutterstock

Ford RICO lawsuit targets lemon-law firms

On Friday, Ford filed a civil racketeering lawsuit against lemon-law firms and lawyers in California.

Ford alleges that three law firms led by the Knight Law Group LLP and six affiliated attorneys and staff members violated the Racketeer Influenced and Corrupt Organizations Act, overbilling for legal fees by submitting court timesheets recording more than 24 hours worked in a single day.

"Ford’s civil RICO suit against a number of lawyers and law firms is a result of a comprehensive investigation that uncovered what’s alleged to be a massive scheme to submit phantom invoices filled with 'ghost hours' for work that was never performed to deceive California judges, dupe their own clients and to defraud auto manufacturers, Doug Lampo, Ford counsel," said in a statement to The Detroit News.

Ford says it has identified hundreds of cases in which at least $100 million of legal bills were fraudulently charged to manufacturers by lemon-law lawyers.

In one instance, one attorney billed as many as 57.5 hours on November 30 across multiple cases. That same lawyer billed more than 20 hours on at least 66 occasions.

Ford also says The Knight Law Group routinely brought in other law firms and attorneys as co-counsel to handle trial work, often overstaffing cases with 10 to 15 lawyers.

Ford is seeking at least $100 million in damages, but RICO statutes could triple those damages.

Ford accuses law firms of abusing their positions in the court

Ford says these law firms are taking advantage of a law meant to protect consumers to fraudulently enrich themselves.

"Defendants abused their positions of trust as members of the Bar to deceive the courts," said Daniel Saunders, the Ford attorney who filed the lawsuit. Ford says that at least half of the legal fee applications on behalf of vehicle buyers over the last decade were inflated.

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The lawsuit also suggests that Ford wasn't the only victim of this scheme.

"Ford has identified hundreds of cases in which not less than $100 million of legal bills were unlawfully sought and collected," Saunders wrote, according to The Detroit News.

"A review of fee claims in multiple cases takes one on a magical mystery tour of fictitious billings, including individual attorneys who supposedly worked more than 24 hours per day or simultaneously attended different trials or depositions in geographically distant jurisdictions."