Ford Must Litigate California Car Defect Claims in Open Court

Ford Motor Co. lost its bid to force dealership customers to arbitrate claims over car defects after a Thursday California Supreme Court ruling.

Ford can’t invoke an arbitration provision in the sales contract between customers and the dealerships because the agreement doesn’t extend to third parties, justices wrote in the unanimous opinion. There’s no allegation the dealers acted as agents of the manufacturer or on Ford’s behalf at all, the opinion said.

“Plaintiffs and Ford have not agreed to anything, much less to arbitrate any dispute between them,” the opinion said.

The plaintiffs, who purchased their cars between ...