Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

General Motors Sued in California Over Ignition Switch

March 20 (Bloomberg) -- General Motors Co., already facing lawsuits in Texas and Michigan over an ignition flaw, was sued in California on behalf of the owners of 1.4 million vehicles affected by the defect.

Seattle-based law firm Hagens Berman Sobol Shapiro LLP, which filed a complaint yesterday in Santa Ana, California, said in a statement that it’s seeking to recover about $250 for every owner in the U.S., or more than $350 million in total, plus punitive damages for the automaker’s alleged failure to disclose critical safety information.

GM Chief Executive Officer Mary Barra said March 18 that it “took too long” to recall cars linked to stalled vehicles and 12 deaths. She appointed a new safety chief to ensure defects get a more timely resolution. “Our goal is that something like this will never happen again,” she said.

The California lawsuit against GM, which may be consolidated with other cases, came on the same day as the U.S. announced a settlement with Toyota Motor Corp. for $1.2 billion to end a criminal probe into sudden unintended acceleration that led to the recall of more than 10 million vehicles. The settlement represents the largest criminal penalty imposed on an automaker in the U.S., Attorney General Eric Holder said.

U.S. regulators and officials, including the Federal Bureau of Investigation’s New York office, according to a person familiar with the matter, are probing GM after the recall of 1.6 million Chevrolet Cobalts and other small-car models linked to the fatalities. This week, GM said it’s recalling 1.76 million vans, sedans and sport-utility vehicles, citing concerns over brakes, seat belts and air bags.

The named plaintiff in the California lawsuit owns a 2007 Saturn Ion coupe that she wouldn’t have bought, or would have paid less for than she did, if she’d known about the defects, according to the complaint.

GM Spokesman

Greg Martin, a spokesman for Detroit-based General Motors, said in an e-mail that he won’t comment on specific lawsuits.

“Our immediate focus is on getting the vehicles repaired quickly as we can with as little inconvenience to the customers as possible,” Martin said. “At the same time, we are conducting a rigorous investigation to find out what went wrong and why.”

A lawsuit seeking class-action status for car owners affected by the recalls was filed March 14 in federal court in Corpus, Christi, Texas. GM may seek to have the class-action lawsuits, as well as other possible cases related to the ignition defect, consolidated before one judge rather than face different outcomes and verdicts in separate courts, said Aaron Jacoby, chairman of Arent Fox LLP’s automotive group in Los Angeles.

“Defendants want consistency,” Jacoby said in a telephone interview. “The plaintiffs will try to get it where they can get the best results.”

Michigan, Texas

It would be a big win for GM if the company can get the cases consolidated before a federal judge in Michigan, where it is based, rather than in Texas where jurors tend to be more on the side of plaintiffs and more likely to award big verdicts against corporate defendants, Jacoby said.

Hagens Berman was part of a class-action settlement, valued by plaintiff lawyers at $1.63 billion, with Toyota on behalf of American car buyers who claimed financial losses from the Japanese automaker’s 2009 and 2010 recalls for sudden acceleration-related issues. Toyota is still trying to resolve hundreds of personal injury and wrongful death lawsuits stemming from the recalls.

GM’s Barra said March 18 she first learned about an analysis of the stalling cars in December, weeks before she become CEO, and that she was informed of the decision to recall cars on Jan. 31.

What Barra, 52, and others at GM knew and when is the goal of the internal investigation into why the automaker took so long to issue a recall. The replacement of ignition switches was announced last month, years after customers started complaining that the autos could switch off if bumped or driven with a heavy key chain.

The case is McConnell v. General Motors LLC, 14-00424, U.S. District Court, Central District of California (Santa Ana).

To contact the reporter on this story: Edvard Pettersson in Federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Fred Strasser

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.