Arizona Files Its Own $3 Billion Lawsuit Against GM Claiming Fraud

Breaking away from a multi-state investigation, Arizona has filed a lawsuit against General Motors for $3 billion. The lawsuit claims GM’s many recalls defrauded Arizona residents by devaluing their vehicles which resulted in millions in lost assets.

Arizona’s lawsuit is the first major legal action filed against GM over its record number of recalls this year. The harsh complaint directly points to the notable defective ignition switch recall as the primary source of devaluing Arizona residents’ vehicles.

Using dramatic wording like the “new GM was not born innocent,” Arizona claims that for years the company misled consumers through its advertising, public statements and hid the problem.

“It is difficult to find a brand whose reputation has taken as great a beating as has the New G.M. brand starting in February 2014 when the first ignition-switch recall occurred,” the complaint said, according to a New York Times article.

Prior to filling the suit, Arizona’s attorney general was part of a group of 48 state attorney generals conducting a large-scale investigation.

“We’re proceeding with our own suit because it’s the best way to protect the citizens of Arizona,” Attorney General Thomas C. Horne (R), said in an interview. “General Motors represented that it was taking care of the safety of its cars, and in fact there were serious defects that it did not disclose to the public for years.”

Arizona determined GM is responsible for approximately $3 billion worth in damages. The figure was calculated by taking the nearly 300,000 GM vehicles recalled in the state this year and applying the Arizona consumer penalty statute stipulating $10,000 per violation.

GM isn’t taking the lawsuit lightly.

James R. Cain, a GM spokesman, said the complaint “misrepresents the facts, the performance of our vehicles and our work to ensure the safety of our customers. We intend to vigorously defend ourselves.”

Other attorney generals may opt to join in instead of waiting for a larger suit.

“That’s completely their decision, it’s up to other states,” said Attorney General Horne. “I need to protect Arizona citizens, and this is the best way to do it.”

That could also be read as: “we smell a lot of money, and suing GM to get it is the best way to do it.”