A new lawsuit filed in federal court in Riverside, California says that General Motors should compensate owners of GM products for loss of resale value due to massive recalls and negligence in handling a recall for defective ignition switches. The $10 billion lawsuit was filed by Hagens Berman Sobol Shapiro on behalf of Anna Andrews of La Quinta, CA for $10 billion.
Anna Andrews said she would not have bought her secondhand 2010 Buick LaCrosse, or would have paid less for it, had General Motors been up front about vehicle defects. Her class-action lawsuit is for people who have owned or leased GM vehicles sold between July 10, 2009, and April 1, 2014, or who later sold such vehicles at cut-rate prices.
In the lawsuit, the firm intends to force GM to pay around 15 million car and truck owners for damage to its brand and reputation. This includes owners not directly affected by the recall of cars with defective ignition switches. “GM’s egregious and widely publicized conduct and the never-ending and piecemeal nature of GM’s recalls has so tarnished the affected vehicles that no reasonable consumer would have paid the price they did when the GM brand meant safety and success,” the complaint says.
GM spokesman Greg Martin has declined to comment on the lawsuit. He says that many customers and analysts recognized the strength of the GM brand and that the market recognition has resulted in increased sales, transaction prices and residual values.
According to The Economic Times, the lawsuit pains a “disturbing picture” of GM’s approach to safety, including how “in truly Orwellian fashion” the largest US automaker would encourage employees to avoid words such as “bad” and “failed,” and use euphemisms such as “issue” or “condition” rather than “problem” when discussing defects.
This lawsuit comes at a time when General Motors claims new- and used-car sales have not been hurt by the recall crisis.
Comments
In the end, these people will be lucky if they wind up with a coupon for $1000 off their next GM vehicle. I would much rather see GM’s executives sent to work in a Chinese labor camp. Past and present execs that is.
http://www.businessweek.com/articles/2014-06-18/gm-recalls-whistle-blower-was-ignored-mary-barra-faces-congress
So let me get this right. Even people who were not affected by the ignition recall feel they should be compensated because of a lower public image of what their cars will be worth for resale value?
This lady who said she’d have paid less if she knew her car was affected by a recall; why would a car be worth just because it has a recall that GM is paying to fix? Every manufacturer lots of recalls on vehicles. But I bet she would argue like crazy that just because her car has a $10,000 accident claim it should not lower her resale value because insurance fixed it good as new.
We all know at least one money hungry law firm; the one listed above. This would set a pretty dangerous precedent because owners could sue a manufacturer every time their vehicle has a recall.
Good luck with this law suit.
This is a BAD lawsuit because if these blood thirsty lawyers win… It could set a precedent for all future recalls affecting car value… Not Good…!!!
These lawsuits are the bane of our legal system.
First off it is a bogus claim.
Second only the lawyers will get anything of value here as GM will try to get it tossed but the liberal courts in CA may force GM to settle that the owners will see little or nothing off as the law firms will claim expenses.
Third the rest of us will be the ones who pay for this with increased prices.
GM sales have increased and just how much are people going to lose on a car because of this? The lacrosse was not even one included in this original deal to begin with. You would think they would have tried to get one of owners of the effected cars.
My cash has lost a lot of value over the last 40 years. Should I sue the government?
Funny my love local paper has article in it tonight stating people are not shying away from used GM cars and the prices are not falling.