Ford Motor settles lawsuit with Tennessee over misleading advertising

FILE - In this April 25, 2021 file photograph, the blue oval logo of Ford Motor Company is shown in east Denver. Ford plans to open a battery development center near Detroit by the end of next year. The company said the 200,000-square-foot facility will have equipment to design, test and even do small-scale manufacturing of battery cells and packs. (AP Photo/David Zalubowski, File)

The Ford Motor Company, whose forthcoming electric truck plant in West Tennessee was landed by state leaders with $900 million in taxpayer incentives, has just settled a lawsuit brought by the state over claims the auto company engaged in misleading advertising that falsely inflated mileage claims for some of its vehicles over the past decade.

Ford agreed to pay Tennessee $317,000 in a settlement filed May 31 in Davidson County Chancery Court. The settlement is part of a $19.2 million deal struck with 40 states and the District of Columbia, who conducted a multistate investigation into Ford's advertising practices. The investigation was led by Oregon, Texas, Illinois, Maryland, Vermont and Arizona.

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The distribution of the settlement funds is at state Attorney General Herbert Slatery's discretion. The settlement says the funds may be used for consumer protection enforcement, consumer education or any other purpose permitted by state law.

A spokesperson for Slatery did not respond to a request for information on how the funds will be distributed.

In Tennessee, the claim filed against Ford noted the automaker made misleading advertising claims that its 2013 and 2014 C-May Hybrid could achieve a fuel economy of 47 miles per gallon in city and highway driving, but in 2013 restated the mileage at 45 miles per gallon in the city and 40 on highways.

By 2014, Ford had restated the mileage again, lowering its estimate to 42 miles per gallon in the city and 37 miles per gallon in the highway. Consumers ultimately received compensation for the higher fuel costs, according to the petition, and Ford stopped making the vehicles in 2018.

Ford, in its agreement, specifically denied it violated any federal or state laws. As part of its settlement, Ford agreed to not make false or misleading advertising claims about the fuel economy or the payload capacity of any new vehicle.

Gov. Bill Lee last year announced the state had landed a new $5.6 billion Ford electric truck plant that will be in rural West Tennessee at the long dormant Memphis Megasite. A special session of lawmakers meeting last October approved the $900 million in incentives, paving the way for the company's new plant. The new plant, known as Blue Oval City, is one of the largest manufacturing investments in state history and is expected to bring 26,000 new jobs.