Week Adjourned: 6.20.14 – GM, Petco, Best Buy

Top class action lawsuits and settlements for the week! Top stories include GM, Petco and Best Buy

GMTop Class Action Lawsuits

What’s your GM Vehicle Worth these Days? Less than it was a few months ago—according to a new class action lawsuit filed against General Motors Co., (GM) this week. The GM lawsuit follows the latest round of GM Recalls, alleging the automotive manufacturer’s reputation has been so badly damaged that even vehicles not included in the recalls have depreciated in value. The lawsuit is seeking in excess of $10 billion on behalf of all GM vehicle owners. The recalls allegedly constitute 25 percent more than what would be seen in a normal year, and almost 20 times more than the number or recalls issued during the same period in 2013, the lawsuit claims.

According to the GM lawsuit, GM marketed its vehicles as safe and reliable which mislead consumers into purchasing or leasing their cars, because the company was, at the same time, intentionally concealing known defects and valuing cost-cutting over safety, eventually leading all GM vehicles to depreciate in value due to its now-ruined brand.

“GM enticed … all GM vehicle purchasers to buy vehicles that have now diminished in value as the truth about the GM brand has come out, and a stigma has attached to all GM-branded vehicles,” the lawsuit states.

The lawsuit claims that the forced recalls of over 17 million vehicles has severely damaged the company’s reputation. According to the lawsuit there are about 40 different recalls covering 35 separate defects. All the recalls took place in the first few months of 2014.

“GM’s now highly publicized campaign of deception in connection with the ignition-switch defect sent shockwaves throughout the country, and jump-started the ever-burgeoning erosion of consumer confidence in the GM brand,” the complaint states.

The suit alleges that the 2010 and 2011 Chevrolet Camaro models have both been diminished between February, before the recalls began, and now, depreciating $2,000 in value. Further, the 2009 Pontiac Solstice went down $2,900 in value during that time, according to the lawsuit. According to the complaint, GM’s vehicles have depreciated in value because “no reasonable consumer” will pay the price they would have paid when the GM brand meant “safety and success.”

If certified, the class will represent GM consumers nationwide who own or lease a new or used vehicle sold between July 10, 2009, and April 1, as well as consumers who sold their GM vehicles at a “diminished price” on or after April 1. The class excludes consumers who own or lease certain Chevrolet Cobalt, Chevrolet HHR, Pontiac G5s, Saturn Ions and Saturn Sky vehicles.

The suit also seeks to certify a California subclass of GM vehicle owners and lessors, in addition to those who sold their cars at depreciated value.

The suit is Andrews et al v. General Motors LLC, case number 5:14-cv-1239, in the U.S. District Court for the Central District of California.

PetCode Problems? Heads up…Petco customers—they got zapped with Zip code class action this week. According to the proposed Petco class action lawsuit the animal supplies retailer is in violation of Massachusetts state law through their collection of customers’ zip codes.

According to lead plaintiffs Jeffrey Scolnick and Leah Crohn,Petco would not allow them to complete credit card purchases without their first providing the retailer with their ZIP codes, even though the store is not required by credit card issuers to collect this information from customers. Consequently, the plaintiffs allege they have received unwanted marketing materials from Petco. Further, they allege the store has sold their information to third parties without their consent and for marketing purposes.

“Petco recorded plaintiffs’ ZIP codes into an electronic credit card transaction form,” the complaint states. “Petco continues to store plaintiffs’ personal identification information, including plaintiffs’ name, ZIP code and credit card number, in its databases.”

The lawsuit, entitled, Scolnick et al. v. Petco Animal Supplies Store Inc., case number 1:14-cv-12547, states that Massachusetts’ high court has determined that ZIP codes constitute personal information under the Massachusetts Unfair Trade Practices Act, which prohibits the collection of personal information by retailers. Consumers place a high value on the privacy of their personal identifiable information, the lawsuit states.

The lawsuit seeks to represent all customers from whom Petco requested personally identifiable information when making a credit card purchase in Massachusetts, according to the complaint. The plaintiffs said they do not yet know the potential number of class members. 

Top Settlements

Best Buy done for less than Best Practices. Plaintiffs in a Telephone Consumer Protection Act TCPA class action lawsuit against Best Buy have finalized a $4.55 million settlement deal. The lawsuit, with a Washington state class of 439,000 members, and a national class of 42,000 members, was initially filed in April 2010 by Michael Chesbro who alleged Best Buy automatically signed customers up for its Rewards Zone program without their knowledge when they purchased electronics under a payment plan. Best Buy then made unsolicited phone calls to those consumers with information about that program.

According to the terms of the Best Buy settlement, filed June 9 in the U.S. District Court for the Western District of Washington, class members will receive their pro rata share from the settlement fund, once court-awarded fees, litigation and administrative costs and the class representative incentive award have been deducted. This will leave an estimated $3.2 million for distribution among class members, equally between $50 and $100 per call.

Michael Chesbro is to receive a $5,000 service award for services he has rendered to the classes by stepping forward to bring this case, according to the settlement papers.

Ok – Folks  – we’re done here – have a great weekend and we’ll see you at the bar!