$10 billion lawsuit wants GM to compensate owners over recalls

Article by Christian Andrei, on June 19, 2014

General Motors is facing a new lawsuit in Riverside, Calif., saying that the carmaker must compensate millions of owners for lost resale value of their of car and truck due to a series of recalls and a delay in calling back cars with faulty ignition switches that caused damage to the GM brand and reputation.

According to a complaint filed by Hagens Berman Sobol Shapiro for La Quinta resident Anna Andrews, GM hurt its customers by concealing the defects and preferring cost cuts over safety – leading to around 30 recalls of over 20 million vehicles so far this year.

The lawsuit claims that the recalls have caused a variety of late-model vehicles to lose between $500 and $2,600 in resale value. Hagens Berman Sobol Shapiro said the case could fetch more than $10 billion, and is the first seeking to compel GM to compensate around 15 million car and truck owners, not just those whose vehicles were recalled, for damage to its brand and reputation.

The California suit painted a "disturbing picture" of GM's approach to safety, including how the carmaker, "in truly Orwellian fashion" would urge employees to avoid words like "bad" and "failed," and use euphemisms like "issue" or "condition" rather than "problem" when talking about defects.

The lawsuit claims that GM's “egregious and widely publicized conduct and the never-ending” as well as the piecemeal nature of the callbacks has tarnished the value of the affected vehicles.

Andrews said in her lawsuit that she would not have purchased her used 2010 Buick LaCrosse, or would have paid less for it, had GM made a better job in divulging vehicle effects. The lawsuit is seeking class-action status for those who owned or leased GM vehicles between July 10, 2009, and April 1, 2014.

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