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.