Ford vs. The Ghost Billers: The RICO Lawsuit That Could Expose Systemic Fraud
Part 2 in the "Taxi Cab" Series
This is Part 2 of our three-part series on class action billing fraud. Part 1 exposed the scope of the problem. This installment examines Ford's groundbreaking approach to fighting back.
A Structural Blind Spot
Billing fraud in class actions has long evaded scrutiny thanks to a systemic blind spot: judges typically review billing records only within the context of individual cases. Without a broader lens, time entries that appear reasonable in isolation can conceal patterns of fraud that span firms, clients, and jurisdictions.
Ironically, the most serious challenge to that status quo isn’t coming from a sprawling class action—it’s coming from a stack of routine, single-plaintiff cases. In a first-of-its-kind lawsuit, Ford Motor Company has accused two law firms, several attorneys and a paralegal of engaging in widespread “ghost billing”—charging for work that was never performed—in dozens of individual suits brought under California’s Song-Beverly Consumer Warranty Act (that is, California’s “Lemon Law”). That statute requires manufacturers to pay the prevailing plaintiff’s legal fees, which meant the firms had to provide some form of support for the time they claimed. Those same records now form the spine of Ford’s case—with a staggering $100 million in time entries now on the line.
The RICO Effect
By suing under the Racketeer Influenced and Corrupt Organizations Act, a federal law originally aimed at organized crime, Ford has dramatically raised the stakes.
RICO allows Ford to hold each participant liable for triple damages and signals a willingness to go after anyone who conspired in the alleged fraud—co-counsel, referral sources, even potentially litigation funders. That includes players who weren’t directly involved in the core billing decisions. One of the named defendants is a paralegal who, according to the complaint, mostly handled administrative tasks like overseeing other paralegals and managing the flow of checks. Naming her may be strategic: cast a wide net early, pressure the weaker links, and flip them into cooperating witnesses. It’s a familiar tactic for plaintiffs’ lawyers looking to break apart defense coalitions. Corporations don’t usually fight that way. But Ford just might.
From Keyhole to Composite View
To support its claims, Ford’s legal team says that they aggregated billing records across numerous lawsuits—turning what was once a keyhole view of a possibly sprawling fraud into the full panorama. According to the complaint, this meta-analysis revealed patterns that would be nearly impossible to detect in isolated reviews, including:
“Physically impossible” time entries, including one attorney who allegedly billed 57.5 hours in a single day.
Simultaneous attendance at multiple trials, with lawyers billing for being in two courtrooms at once.
Over 1,500 vague billing entries with no specific dates or detail.
Ford contends that only by stitching together billing data from many cases could it expose what it sees as a coordinated, system-wide scheme. If this approach succeeds, it could fundamentally alter how billing fraud is detected and prosecuted across the legal industry.
The Fight Before the Fight
This case may be won or lost before discovery even begins. Look for the law firms and other alleged participants to try to get it thrown out early, likely on two fronts.
First, they’ll argue that Ford hasn’t met the demanding standards to plead a RICO claim. Courts regularly toss RICO suits for failing to allege a “pattern” of racketeering activity or a qualifying enterprise—requirements that are notoriously tricky to satisfy, especially when trying to frame billing abuse as wire fraud or mail fraud.
Second, expect the law firms to argue that Ford is barred from relitigating fees that were already approved by courts. Their likely position: once a judge signs off on a fee award, that’s the end of the matter—even if the fee application was misleading. Ford will counter that fraud vitiates finality, especially when the fraud wasn't discoverable at the time.
Either way, the motion to dismiss will be a high-stakes fight—and it’s likely to attract close attention from both the plaintiffs' bar and the business community.
An Existential Battle
The lemon law firms have denied the allegations and characterized Ford’s suit as retaliatory. But if Ford’s allegations hold up, this could be just the first domino to fall in exposing widespread billing fraud. Ford isn’t just alleging civil misconduct—it’s calling this a criminal conspiracy under RICO. That framing dramatically raises the stakes. If proven, it wouldn’t just threaten the firms financially—it could put lawyers’ licenses at risk and potentially trigger criminal referrals.
Ford itself has hinted that this is not an isolated battle, with a spokesperson telling the Detroit Free Press that "while this filing is by Ford, it appears that Ford may not be the only automaker that has been in the RICO defendants' crosshairs." If Ford is correct, this could pose an existential threat to these law firms and a subset of the plaintiffs’ bar more generally.
If the case survives a motion to dismiss, the discovery battles will be brutal. Ford is expected to demand billing records well beyond the identified cases, arguing that broader access is necessary to reveal the true scope of the alleged misconduct. The law firms will likely assert attorney-client privilege, but the court ought to, at a minimum, compel limited disclosures—such as aggregate hours per attorney per day—that may be damning on their own.
Just as threatening, Ford will likely try to find out exactly how these types of lawsuits are structured: Are there hidden referral firms or litigation funders? How are the fees divided up? Did the firms later have internal fights over each other’s bills? None of these are good questions for the law firm defendants.
Ripple Effects Across the Industry
This lawsuit is being closely watched by corporations, many of which may use Ford’s strategy as a blueprint for fighting back against suspected billing fraud. We may see more companies proactively sharing information and conducting meta-analyses of billing practices to challenge fee applications more aggressively.
Let’s be realistic about one thing, though. High-volume plaintiffs' firms are unlikely to change their behavior in response to a single lawsuit. The plaintiffs' bar is often too slow to react to systemic threats, frequently adopting a corporate-like "safety in numbers" mentality—if everyone is doing it, it must be acceptable. Real change is unlikely to happen until more suits are filed that result in significant judgments or other severe consequences.
In contrast, litigation funders—who are often more financially sophisticated than the firms they support—are paying closer attention. Their business model hinges on predictable risk, and the specter of RICO liability introduces a volatile new threat to their investments. Expect funders to begin scrutinizing their partner firms’ billing protocols with far greater intensity, unwilling to wait for a crisis to erupt before protecting their capital.
This litigation brings the plaintiffs’ bar closer to what was once unthinkable: firms filing class actions against other plaintiffs’ firms. Claims administrators—typically selected by lead counsel and treated as part of the same inner circle—have already come under fire in recent lawsuits alleging “double-dipping,” signaling that old norms of mutual protection are starting to break down.
Ford’s lawsuit pushes even further by targeting law firm billing practices and using aggregated data across cases to reveal patterns that would be invisible in isolation. In doing so, Ford is offering more than just a legal strategy. If corporations can use this approach to expose billing fraud, so can plaintiffs’ firms looking to hold their peers accountable. The question may no longer be whether intra-bar litigation is possible—but how soon it will happen.
Next on Left Side of the V: Our final installment in this series will be published next week. But later this week, be sure to catch the first entry in our recurring special feature: the Settlement Scorecard. We'll break down class settlements and apply our (soon-to-be patented, I'm sure) grading system.
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