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Class Action Lawsuit against General Motors for loss of value due to ignition problems

            A class action lawsuit was filed in federal court in Texas on Friday against General Motors (GM) claiming that customers’ vehicles have lost value due to ignition problems blamed for a series of fatal crashes. The complaint alleges that GM knew about the problem since 2004 but failed to fix it, creating unreasonably dangerous conditions for drivers of the affected models. Plaintiffs are seeking damages from GM for the loss of use of their vehicle and repairs and diminished resale value. “Everyone who owns of these recalled vehicles needs to part it now,” said Bob Hilliard, the lead attorney in the action. “Driving a recalled GM vehicle is like carrying a stick of dynamite with a slow-burning fuse.” Plaintiffs are not claiming they were injured in accidents stemming for the ignition problems. GM announced the recall in February, although the company learned of the problems with the ignition switch in 2001. GM has had that when the ignition switch was jostled, a key could turn off the car’s engine and disable airbags, even while traveling at high speed. There have been a reported 12 deaths and 34 crashes in the recalled cars.

            The defect caused GM to recall 1.6 million cars, which led government criminal and civil investigations, an internal probe by GM and preparations for hearing by Congress. GM, however, is not expected to have to pay as much as Toyota did in 2010 if it seeks to resolve economic loss claims. In 2011 a federal judge tentatively ruled that Toyota could appeal the ruling in a class action law suit filed over alleged sudden-acceleration defects. In December 2010 Toyota settled US federal investigations by agreeing to pay a record $32.4 million in extra fines for product defects and poor handling of a recall. The fines stem from two investigations conducted by the National Highway Traffic Safety Administration (NHTSA). The first, a fine of $16.375 million, concerned nearly five million vehicles with accelerator pedals entrapped by floor mats, which caused at least one fatal accident in California. The second, a fine of $16.050 million, resulted from Toyota’s failure to notify the NHTSA of a safety defect in several Toyota models’ steering relay rods. Toyota has been under federal scrutiny since December 2009, and has conducted several recalls.



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