New York, NY: A putative class action lawsuit has been filed against General Motors Co., (GM) following the latest round of GM Recalls, alleging the automotive manufacturer' 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 complaint, 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' 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' 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' 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 proposed class is represented by Elaine T. Byszewski, Steve W. Berman and Andrew W. Volk of Hagens Berman Sobol Shapiro LLP and Mark P. Robinson Jr., Kevin F. Calcagnie and Scot D. Wilson of Robinson Calcagnie Robinson Shapiro Davis Inc.
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.