GM ignition switch recall now may face a $10B lawsuit

Discussion in 'Off-Topic' started by Carnage, Oct 20, 2014.

  1. Carnage

    Carnage SRT Hellcat Supercharged Moderator Staff Member Hellcat Car Club Gold Supporting Member HCC Charter Member

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    Source caranddriver

    GM Ignition-Switch Deaths Up to 29, Automaker May Face $10-Billion Class-Action Lawsuit
    [​IMG]

    A group of lawyers wants to sue General Motors for more than $10 billion in what will likely become the largest class-action lawsuit against the automaker for ignition-switch defects that have claimed at least 29 lives.

    Hagens Berman, the law firm that in 2012 won $1.1 billion in economic damages against Toyota for its unintended-acceleration recalls, has essentially scrapped a $350-million class-action suit against GM it filed in March. That filing, released a month after GM issued the first ignition-switch recall in mid-February and later expanded it, sought $250 per owner for approximately 1.4 million cars. The amended lawsuit, filed last Tuesday with two other firms, includes every new and used GM car sold between July 11, 2009—the day after GM emerged from bankruptcy as a new company—until July 3 of this year. The all-reaching document lists 68 plaintiffs, including two used-car dealers, from 40 states and Washington, D.C., as examples alleging how GM models have lost more value than they would have had GM not tried to “falsely assure” buyers that their cars were “safe and reliable.”

    A second suit from Hagens Berman filed the same day, which did not specify expected damages, is after many of the older vehicles—sold before the 2009 bankruptcy—that GM recalled this year for ignition-switch problems. A total of 151 claims allege that GM violated warranties and committed fraud in all 50 states along with intent to prove the automaker had deliberately “concealed the existence of the defects.”

    Much of the evidence comes from GM marketing materials touting safety and quality, the damning internal audit by Anton Valukas, complaints filed to the National Highway Traffic Safety Administration, and GM’s stream of 76 recalls this year. Several significant points are up for contention. One is whether the roughly 10 million other cars GM recalled in the U.S. for various ignition-switch problems are directly related to the initial 2.2 million cars that set off this chain of events. GM has only admitted switch failure on those cars; on the rest, it has either cut new keys, plugged keychain holes, or refitted existing key fobs. Hagens Berman, according to their filings, thinks GM is trying to patch a single, more serious problem.

    “New GM’s supposed fix does not address the defect or the safety risks that the defect poses,” the suit says. “The real answer must include the replacement of all the switches with ones that have sufficient torque to resist foreseeable rotational forces.”

    [​IMG]

    The filings also allege that GM’s more recent recalls are further evidence that the company knew of older problems and actively tried to hide them from the public. That kind of judgment, however, is rather weak unless NHTSA levies additional civil fines against GM for those particular recalls; so far, GM has already been fined the maximum $35 million and is addressing so many problems at once that it’s likely to escape case-by-case scrutiny, if only for the sheer volume of recalls it has put out this year.

    But Hagens Berman has a larger problem: All used cars depreciate regardless of what a manufacturer does or doesn’t do. One of the suits lists examples of GM vehicles that dropped by hundreds of dollars over a six-month period, yet there’s no indication that this isn’t a normal rate. Beyond that, used-car prices continually fluctuate according to region, available trims, a vehicle’s condition, whether it was involved in a crash, how many similar models come off lease—the list of variables is extremely long and difficult even for industry experts to quantify. A recent study from Black Book [which, like C/D, is owned by Hearst] on popular vehicles affected by large recalls, including some GM models in the present ignition-switch recalls, found little drop in values.

    Also at issue is the present validity of GM’s bankruptcy shield, which the company has invoked to essentially toss out any lawsuit involving cars built under the “old GM.” A U.S. bankruptcy judge has been mulling over the argument for months and has yet to reach a conclusion. If GM’s victim-compensation fund ends up paying more victims—so far, settlement negotiator Kenneth Feinberg has approved 29 death claims in connection to ignition-switch-related accidents—the judge may find GM’s defense too thin to stand.
     
  2. Bane

    Bane Silver Member

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    My 15-year old niece was killed in 2006 due to a faulty ignition switch in the Cobalt she was riding in. She is one of the 29 deaths related to this story. I will never buy a GM product and if we have to rent a vehicle while on travel, we always specify that we want a Chrysler product.
     
    • Agree Agree x 1
  3. Carnage

    Carnage SRT Hellcat Supercharged Moderator Staff Member Hellcat Car Club Gold Supporting Member HCC Charter Member

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    Sorry to hear that Bane :(:(:(
     
  4. Tammie

    Tammie SRT Hellcat Moderator Staff Member Gold Supporting Member

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    Wow!! That is terrible. I am so sorry for your family's loss! It is a shame they would ignore something like this until they got called on it. I don't blame you, I rent a lot of cars each year when I travel. I am going to insist on the same thing from now on.
     

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