Arizona Sues Over GM RecallsNovember 20, 2014
Arizona Attorney General Thomas C. Horne announced that the state would sue the automaker due to the recent GM recalls. The suit claims that the manufacturer defrauded the state’s consumers out of $3 billion. The lawsuit separates Arizona from almost every other state in the Union, as 48 other state attorneys general have been engaged in a multi-state investigation into the company’s practices. The Arizona Attorney General’s office had served on the executive committee of that investigation, along with their counterparts in Ohio and South Carolina.
Ignition Switch Defect Prompts GM Recalls
While the company has issued nearly 70 GM recalls since January, the largest one so far was related to a faulty ignition switch. The switch would move from the “ON” to the “ACC” position when the switch assembly was bumped or when a heavy key chain pulled on the ignition key. The switch movement would cause the vehicle to lose power to its major safety systems, including the power steering, power brakes and airbag deployment system. The GM recall covered more than 2.6 million vehicles, mostly small sedans manufactured in the early to mid 2000s.
Lost Value Spurs GM Recall Lawsuit
The Arizona GM recall lawsuit stems largely from the lost value that the state’s customers have seen in their vehicles due to the ignition switch defect. Arizona law specifies that the penalty for consumer fraud is $10,000 per violation. With 300,000 of the vehicles affected by the GM recall registered in Arizona, the state is seeking $3 billion in penalties. In his complaint, Mr. Thorne cited that the 2010 and 2011 versions of the Chevrolet Camaro had lost $2,000 in value, while the 2009 Pontiac Solstice had lost nearly $3,000.
Lawsuit Over GM Recalls Cites False Advertising
In his GM recall complaint, Mr. Thorne alleges that GM used its advertisements, websites and press releases to lie to its customers about the quality and safety of its vehicles. The complaint also claims that the company’s top officials, including Chief Executive Officer Mary Barra, were involved in the cover-up prior to the massive GM recall. In an interview, Mr. Thorne claimed that GM “represented that it was taking care of the safety of its cars,” but failed to disclose “serious defects” such as the ignition switch flaw.
Other GM Recalls Drive Lawsuit
Although the GM recall for the faulty ignition switch is one of the largest for the company, the Arizona complaint also cites several others. The complaint lists numerous GM recalls on defective parts, ranging from seatbelts and brake lights to transmission cables and headlights. The suit includes excerpts from consumer complaints about the widespread nature of the problems, as well as how the pre-bankruptcy leadership of GM attempted to cover up those problems.
Source: New York Times
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