Law Firms
RICO billing conspiracy by law firms ‘hoodwinked’ courts, Ford alleges in suit seeking $300M
A closeup of the Ford sign is seen outside a Ford dealership store in Sunnyvale, California, in May 2022. (Photo from Shutterstock)
Three California law firms are part of a racketeering conspiracy that “ingeniously” inflated fee requests in lemon law litigation by spreading their fraudulent billing across thousands of cases against many car makers, according to a $300 million lawsuit filed Wednesday by the Ford Motor Co.
Fee claims in multiple cases reveal “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,” according to the May 21 suit, filed in the U.S. District Court for the Central District of California.
Named as defendants in the suit are three California firms, five lawyers and a paralegal.
Over the last 10 years, the suit says, the defendants submitted attorney fees requests totaling more than $100 million to the Ford Motor Co. on behalf of car buyers seeking damages because of allegedly defective cars. The Ford Motor Co. think that at least half of the requests, made under California’s lemon law, are based on inflated fees.
The suit seeks $100 million in damages for fees paid because of fraudulent billing statements and asks for triple damages.
The Ford Motor Co. alleges that the ringleaders of the enterprise are the Knight Law Group and Steve Mikhov, a founding partner and former managing partner of the firm, who now lives in Puerto Rico.
One lawyer billed more than 20 hours per day at least 66 times, including 34 times that exceeded 24 hours per day, according to the suit. One of those requests included “an ostensibly heroic but physically impossible 57.5-hour workday in November 2016,” the suit says.
Another lawyer claimed to have attended “two different trials in two different jurisdictions on a single day, totaling 29 hours of work.”
Other lawyers also “billed vast amounts of phantom legal fees,” billing for the same tasks “across a multitude of cases on the same day,” the suit says.
By spreading their fee requests across numerous matters in different courts, the defendants, “hoodwinked all of the judges and lawyers who were privy only to information presented in individual cases,” the suit contends.
The Knight Law Group gave this statement to the ABA Journal: “Knight Law denies the allegations in Ford’s lawsuit. For over 20 years, Knight Law and its attorneys have been California’s leading lemon law consumer rights advocates, winning numerous jury verdicts awarding millions of dollars in punitive damages on account of Ford’s documented fraudulent misconduct against consumers, and forcing Ford to settle hundreds of other cases to protect California consumers. This action by Ford is nothing more than a thinly veiled attempt to silence firms who would dare to hold them responsible and seek justice for consumers. This lawsuit—which makes no claim that Knight Law’s clients were harmed in any way—mischaracterizes the facts, and the claim that billing practices amount to a ‘racketeering enterprise’ is ridiculous.”
Contact information for Mikhov was not available from the State Bar of California’s attorney search page.
Law360, Reuters, Bloomberg Law, the Daily Journal, the Detroit News, Courthouse News Service and the Los Angeles Times are among the publications that covered the suit.
Ford is represented by Kasowitz Benson Torres in the suit.
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