Ford accuses Lemon Law firms of $100M fraud in sweeping federal lawsuit

Ford Motor Co. filed a sweeping federal lawsuit accusing multiple prominent California Lemon Law attorneys and their firms of orchestrating a "massive and years-long" fraudulent billing scheme that allegedly extracted more than $100 million in inflated legal fees from the automaker and other car manufacturers.

In a 27-page complaint filed by Kasowitz Benson Torres LLP in the Central District of California on Tuesday, Ford alleges that attorneys with Knight Law Group LLP, Altman Law Group and Wirtz Law APC submitted thousands of fictitious time entries in Lemon Law cases over the past decade.

Knight Law denied the allegations.

"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 consumer," a representative of the firm said in an emailed statement.

Ford's complaint stated, "The scheme was carried out through a sophisticated criminal enterprise of attorneys and law firms that ingeniously spread their fraudulent billings across thousands of cases against many auto manufacturers so that their fraudulent scheme would go undetected."

"This criminal enterprise would have continued unabated," the complaint continued, "but for the tremendous expense incurred by Ford to audit and detect the fraud."

However, Knight Law's statement said, "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."

Knight Law Group managing partner Roger Kirnos, partner Amy Morse, and former founding partner Steve B. Mikhov, along with a former paralegal for the firm, are named as defendants.

Attorneys Bryan C. Altman, now a partner at Quill & Arrow LLP, and Wirtz Law founding partner Richard M. Wirtz are also named.

Emails were sent to all of the attorneys except Mikhov, whose contact information is not publicly available. A voice message was left for Wirtz. Representatives for Quill & Arrow could not be reached for comment.

The lawsuit claims discovery is required to determine culpability for others who were involved in any alleged overstaffing. Ford Motor Company v. Knight Law Group LLP et al., 2:25-cv-04550 (C.D. Cal., filed May 21, 2025).

Ford claims the attorneys used a variety of deceptive practices, including billing for more than 24 hours of work in a single day, double-booking appearances at trials in different jurisdictions, and fabricating task entries that were never performed. The automaker is seeking treble damages under the federal RICO Act, as well as attorney fees and declaratory relief barring the defendants from collecting further payments.

Among the most explosive allegations:

• Attorney Amy Morse purportedly billed more than 57 hours in a single day and exceeded 24 billable hours on at least 34 occasions.
• Multiple attorneys allegedly claimed attendance at full-day proceedings in courts hundreds of miles apart--on the same day.
• Defendants are accused of generating inflated billings through vague, repetitive task descriptions across hundreds of cases, including no-date entries exceeding 1,200 hours.

The lawsuit describes an alleged coordinated, fraudulent "association-in-fact enterprise" aimed at exploiting California's Song-Beverly Consumer Warranty Act.

"These and other similar fraudulent time entries have continued to be used to make claims for legal fees, including as recently as September 2024," the complaint stated. "Indeed, in a single email on Sept. 6, 2024, Knight Law Group sent ten fee statements to Ford's outside counsel, seven of which contain time entries as far back as 2018."

Attorneys for Ford, led by Kasowitz Benson partner Daniel A. Saunders, claim that the fee-shifting mechanism under the Lemon Law was manipulated to secure unearned payouts - often via settlement checks or court-ordered judgments - based on falsified billing records.

Ford's general counsel, Doug Lampe, said in a statement: "Ford's civil RICO 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. In Ford's case, these fraudulent and inflated billings are alleged to total at least $100 million dollars over five years."

Ford's lawsuit alleges the scheme was designed to fly under the radar by dispersing inflated time entries across thousands of individual cases involving different auto manufacturers and courts.

California's lemon law is a term which refers to portions of two state laws, the Song-Beverly Consumer Warranty Act and Tanner Consumer Protection Act. It is designed to protect people who buy or lease a car with serious defects that cannot be repaired at a reasonable price.

Both consumers and car dealers have complained about the lemon law over the years. Last year, Gov. Gavin Newsom signed AB 1755, a bill with provisions designed to please both sides. It was written to streamline notices and other procedural requirements to help buyers receive compensation more quickly. At the same time, AB 1755 also put in a new statute of limitation requiring buyers to file lawsuits within a year of a car warranty expiring and within six years of taking delivery of a vehicle.

The law was intended to help curb a rash of new lemon law cases. According to an Assembly analysis of AB 1755, there were 23,000 lemon law filings in California in 2023, up from just 4,500 in 2015. However, an odd coalition of automakers and consumers groups opposed the bill, for different reasons. Car companies argued the bill was rushed and would not reduce litigation, while consumer advocates warned it would let carmakers escape liability for some vehicles.

Daily Journal staff writer Malcolm Maclachlan contributed to this report.