Chicago Business Litigation Lawyer Blog
When buying a car, there are many aspects to consider before deciding what to buy. Aside from cost, car buyers tend to be most concerned with safety and performance. No one wants to drive a car they don’t feel safe in. The reputation of the company making the car is also a factor, but when a car company sacrifices the safety of its vehicles to maintain its reputation, it can lose big in the long run.
Such is allegedly the case with GM, which, according to a recent class action lawsuit, allegedly failed to recall faulty vehicles the company allegedly knew were unsafe to drive. The lawsuit accuses GM of being overly concerned with cutting costs and making a profit, a factor that allegedly resulted in the neglect of the safety of its cars. GM denies the claims.
The lawsuit is petitioning the court for consolidation of 68 cases from around the country on behalf of owners of newer-model GM cars. The lawsuit is seeking compensation for car owners for the lost value of their cars that allegedly resulted from the safety issues coming to light. According to the complaint, the “new GM” that emerged after the 2009 bankruptcy “produced an inordinate number of vehicles with serious safety defects,” which it allegedly ignored until 2014, when it recalled about 27 million vehicles in the United States.
The lawsuit only covers cases of alleged economic loss involving cars bought or leased after July 10, 2009, the day GM emerged from bankruptcy, because the company’s restructuring agreement protects it from liability claims that stem from incidents before that date. GM is currently petitioning Judge Robert E. Gerber, who presided over the company’s bankruptcy proceedings, to enforce that provision by dismissing the pre-bankruptcy cases.
Judge Gerber is carefully considering the petition before making a ruling. If GM failed to disclose potential liabilities from the ignition defect during the bankruptcy proceedings, the company could be found guilty of fraud. That would render the restructuring agreement invalid and the court would be able to allow the pre-bankruptcy cases to proceed.
While the judge decides whether the ignition cases can proceed, the current class action against the new GM alleges that the company is guilty of neglecting numerous safety concerns, including axle shafts that could break and a defect in a shift cable that could cause cars to roll out of park. GM claims that only low-level engineers knew about these defects, and thus top-level executives should not be held responsible, but the plaintiffs have been able to provide evidence to the contrary. One email to Mary Barra, GM’s CEO, shows that she was made aware of a safety defect in the electronic power steering of several models as early as 2011.
As evidence that the car company allegedly committed fraud, the lawsuit has provided multiple examples of GM emphasizing its attention to safety. The lawsuit also referred to a filing GM made to the Securities and Exchange Commission in 2010, in which the company allegedly admitted that, “Product recalls can harm our reputation and cause us to lose consumers, particularly if those recalls cause consumers to question the safety or reliability of our products.”
GM points out that the court has not yet decided to certify the class. The company also insists that it “intends to vigorously defend against plaintiff’s claims that G.M. vehicles have reduced resale value.”
Our Chicago class action lawyers near Lombard and Elmhurst bring class action, product defect, privacy law and individual consumer rights lawsuits. We bring suit for many types of class action lawsuits for consumer fraud issues and for unpaid overtime, junk fax, privacy rights violations, property damages due to pollution, false advertising and other claims. Super Lawyers has selected our Kane, DuPage and Cook County class action lawyers as among the top 5% in Illinois. Our Chicago class action attorneys only collect our fees if we win or settle your case. For a free consultation call us at our toll free number 630-333-0333 or contact us on the web by clicking here.