Lawsuit Filed Against General Motors For Defects

A lawsuit was filed against General Motors on Wednesday June 19th in federal court in California. The lawsuit relates to the newly released details behind the roughly 40 recalls of General Motors vehicles that has taken place since February of this year. The lawsuit aims to hold General Motors accountable for fraudulently and deliberately concealing over 30 known defects from the public, while at the same time it was marketing General Motors vehicles as “safe” and “reliable,” and claiming that it built “the world’s best vehicles.” The lawsuit alleges that General Motors “valued cost-cutting over safety,” and actually trained its personnel never to use the words “stall,” “defect,” or “safety issue.”

The suit seeks to recover what could potentially exceed $10 billion dollars on behalf of nationwide class members who purchased or leased certain General Motors vehicles between July 10, 2009 and April 1, 2014, who received these vehicles under “false pretenses.” Purchasers and lessors of General Motors vehicles were told that they were getting safe and reliable vehicles, and these consumers relied upon GM’s reputation. That reputation is now tarnished. Based upon “stigma” now attached to these vehicles, following the revelation of these various defects, the value of General Motors vehicles has been diminished, causing owners and lessors potentially thousands of dollars in damages. In short, the damage to GM’s brand and reputation has caused the value of these vehicles to drop, and General Motors consumers are now paying the price.

Under the Transportation Recall Enhancement, Accountability and Documentation Act (TREAD) and accompanying regulations, when a manufacturer learns that a vehicle contains safety defects, it must promptly disclose the defect. If and when it is determined that the vehicle is defective, the manufacturer may be required to notify vehicle owners, purchasers and dealers of the defect, and may be required to fix the defect. In May 2014, General Motors admitted violating the TREAD Act when it did not disclose the now infamous “ignition switch defect,” which has been linked to 54 motor vehicle accidents and 13 deaths. Under a Consent Order entered into with the NHTSA, General Motors has agreed to pay the maximum available civil penalties for its violation of this violation of the TREAD Act.

Revelations about defects in General Motors vehicles and concealment of those defects come in the wake of the company’s emergence from bankruptcy. On July 10, 2009, after receiving a landmark $50 billion government bailout, General Motors emerged from bankruptcy promising that it was committed to “create products that consumers can judge as best in class.”

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