Ford Motor Co. has taken legal action against several law firms and attorneys in Southern California. The car manufacturer claims these lawyers have been involved in a large-scale fraud scheme, allegedly collecting over $100 million in "phantom legal fees" related to California’s Lemon Law.
The lawsuit was filed in Los Angeles federal court, where Ford accuses the lawyers of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. The company describes the invoices it received from these attorneys as a “magical mystery tour of fictitious billings.” Ford argues that the lawyers exploited a law meant to protect consumers with defective vehicles.
California’s Lemon Law, formally known as the Song-Beverly Consumer Warranty Act, requires automakers to cover legal fees and court costs for consumers with faulty products. Ford claims this requirement has led some attorneys to inflate their hours or falsely report being in multiple places at once.
In its complaint, Ford identifies Steve B. Mikhov as the "ringleader" of the alleged scheme, claiming he and the Knight Law Group, where he was a founding partner, orchestrated the fraud. A spokesperson for Knight Law Group has denied the allegations, calling Ford’s lawsuit an attempt to silence those holding the company accountable.
Ford’s investigation reportedly uncovered instances where attorneys billed for hours that were impossible to achieve. For example, one attorney, Amy Morse, allegedly billed over 20 hours in a single day on multiple occasions, including a staggering 57.5-hour workday in November 2016.
The lawsuit also names other defendants, including Knight partner Roger Kirnos, former paralegal Dorothy Becerra, the Altman Law Group, and Wirtz Law APC. Ford’s legal representation, Kasowitz Benson Torres LLP, has indicated that the company has been cooperating with federal authorities regarding this matter.
Ford claims that the alleged fraud not only resulted in significant financial losses but also harmed its reputation. The company is seeking damages that would cover the bogus payouts and the extensive investigation costs incurred.
This case highlights ongoing concerns about the integrity of legal practices within the framework of California’s Lemon Law. Experts have suggested that reforms may be necessary to prevent similar situations in the future. The allegations have sparked discussions about the need for changes to the law to eliminate incentives for fraudulent billing practices.