June 18, 2014 at 5:29 pm

Class-action lawsuit filed against GM over recall

A national consumer rights law firm said Wednesday it has filed a class-action lawsuit against General Motors Co., alleging the company’s recall of more than 20 million vehicles this year has hurt the GM brand and owners have suffered economic loss with lower resale values.

Hagens Berman Sobol Shapiro said it filed the lawsuit in federal court in the Central District of California. The suit, which alleges misrepresentation, concealment and non-disclosure of “piecemeal” safety defects,” seeks compensation based on the car company’s damaged brand perception. It cites some economic studies that show some select non-recalled GM cars and trucks have dropped in resale value.

The firm says that if certified, the class could represent as many as 15 million GM vehicle owners and GM’s exposure could be more than $10 billion.

The class action would seek to include vehicles sold after GM’s 2009 bankruptcy, between July 10, 2009, and April 1, 2014, and include anyone who owns, owned or leased a new or used GM vehicle during the period, as well as people who sold vehicles at a “diminished price.”

The firm, in its lawsuit, says it has measured decreased value from $500 to more than $2,600 a vehicle.

“Had a purchaser of a 2010 Camaro known that the manufacturer had gone to such great lengths to hide safety defects on other GM cars, there is no way that purchaser would have paid full price,” said Steve Berman, managing partner of Hagens Berman, in a statement. “The economic reality is that all GM owners are bearing the costs of GM’s actions.”

GM said it would not comment on pending litigation.

“However, and more broadly, I would say that many customers and independent analysts recognize that GM is delivering the strongest product lineup in its history,” GM spokesman Greg Martin said in an email. “The result of this market recognition has been increased sales, transaction prices and residual values.”

The Detroit automaker faces several dozen other economic loss related lawsuits filed by vehicle owners of cars that are part of its ignition switch recall. GM earlier this year recalled 2.59 million Chevrolet Cobalts, Saturn Ions and other small cars for faulty ignition switches that can move out of the “run” position while driving, turning off the engine and disabling power steering and air bags. GM has linked 13 deaths and 54 crashes to the defect.

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