General Motors Co. (GM) has been hit with another lawsuit, the biggest to date that could seek $10 billion in compensation for 27 million owners who have seen their vehicle’s value plummet due to serial recalls.
The would-be class action suit against GM seeks to represent owners who purchased or leased a recalled vehicle from July 2009-July 2014 and still own it or have sold it after mid-February when the recalls began, or had an accident that wrecked it after that date. It is estimated that over 20 million people could become part of this class action movement against GM.
According to the complaint just filed in federal court in Manhattan, “The value of all GM-branded vehicles has diminished as a result of the widespread publication of those defects and New GM’s corporate culture of ignoring and concealing safety defects,” referring to the post 2009 bankruptcy and government bailout as “New GM.” According to the filing, “New GM repeatedly proclaimed that it was a company committed to innovation, safety and maintaining a strong brand.”
GM hid more than 60 serious defects in the estimated 27 million vehicles sold in the U.S., resulting in the falling prices of the vehicles, with the latest problem being an electric wiring defect in its new Chevrolet Colorado and GMC Canyon midsize pick-ups. The U.S. Justice Department is conducting a criminal investigation involving the recall of 2.6 million GM vehicles over the ignition switch defect the automaker ignored for more than ten years.
The larger suit pertains to vehicles manufactured after the bankruptcy.
A smaller suit, focused on the defective ignition switches in cars manufactured prior to GM’s bailout, may be curtailed next year if a bankruptcy judge rules that older accident claims and economic losses will be allowed. GM is asking the judge to rule that his earlier orders, enabling the U.S. to rescue the falling company, bar most of the claims over older cars.
According to the lawsuits, model year 2010 and 2011 Chevrolet Camaros are $2,000 less than they might otherwise have been worth at trade-in and 2009 Pontiac Solstice prices fell by $2,900 as a result of the recalls.
In an emailed statement, GM said that it would “vigorously defend against plaintiffs’ claims that GM vehicles have reduced resale value.”
Based on the most recent data from GM’s compensation program aimed at settling rather than fighting the lawsuits, the number of fatalities from the ignition switch defect has more than doubled from the original estimate of 13. Kenneth Feinberg, the lawyer charged with overseeing payments to victims and their families, said 27 payouts have been approved as of October 10th in the death cases. More than 151 other fatality claims are being reviewed.
GM, the nation’s largest automaker, said in July that they were setting aside $400-600 million to pay victims. Feinberg has received 1,371 claims in total, including 1,193 for non-fatal injuries. Of those injury claims, 25 have been ruled valid so far. It is estimated that more than 20 million owners would participate.
According to the complaint, GM produced “a grossly inordinate number of vehicles with serious safety defects,” and until this year, “was successful in concealing both its disregard of safety and the myriad defects that resulted from that disregard.”
The 2014 recalls covered “virtually every safety system in GM-branded vehicles, including but not limited to the air bags, seat belts, brakes, brake lights, electronic stability control, windshield wipers, sensing and diagnostic modules, and warning chimes,” according to the complaint.
In cases where it is believed that an auto defect led to an accident or a safety feature failed to work in an accident, those hurt may have grounds to file a product liability lawsuit against the manufacturer. In cases where people are killed in these types of accidents, their families may be able to file a lawsuit.
If you or a loved one has been injured as a result of a defective product, you may be entitled to compensation for your damages. Contact one of our Gacovino Lake attorneys at 1-800-246-HURT (4878) for more information.