Products Liability Law Daily $120M settlement reached with GM in multi-state ignition switch investigation
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Friday, October 20, 2017

$120M settlement reached with GM in multi-state ignition switch investigation

By Susan Lasser, J.D.

Attorneys general in 49 states and the District of Columbia have reached a $120 million settlement agreement with General Motors Company (GM) concerning their investigations into the automaker’s alleged concealment of known safety defects in its vehicles’ ignition switches. The settlement concluded the states’ investigation into GM’s failure to disclose in a timely manner known safety defects in several models of GM vehicles. According to press releases by the many attorneys general, the defects not only increased the risk of serious injury or death in certain types of crashes, but also resulted, in some cases, in serious and deadly accidents.

Ignition switch defect. The defective ignition switches could move out of the "Run" position and to the "Accessory" or "Off" position under certain conditions. In many cases, the ignition switch occurrence resulted in the driver experiencing a loss of electrical systems, including power steering and power brakes. Moreover, in cases of a collision occurring while the ignition switch was in the "Accessory" or "Off" position, the vehicles’ safety airbags at times failed to deploy, increasing the risk of injury or death. In 2014, GM issued seven vehicle recalls in response to unintended key-rotation- and ignition-switch-related issues that affected more than nine million vehicles in the United States.

The states allege that certain employees of GM and General Motors Corporation—GM’s predecessor which went through bankruptcy in 2009—knew as early as 2004 that the ignition switches in its vehicles were dangerous to drivers because they could cause airbag non-deployment. However, in spite of this knowledge, GM personnel delayed issuing recall notices about the defect, and, at the same time, marketed the safety and reliability of its vehicles equipped with the defective ignition switch.

District of Columbia complaint and consent judgment. As an example, in its complaint filed yesterday in the Superior Court of the District of Columbia, the District of Columbia alleges that GM’s actions violated the District’s Consumer Protection Procedures Act (CPPA) and Lemon Law by (1) misrepresenting that the company’s motor vehicles and motor vehicle equipment were safe and reliable; (2) failing to disclose to consumers and regulators safety risks that it knew about and that were associated with the operation of GM motor vehicles and motor vehicle equipment; (3) selling motor vehicles and motor vehicle components that were unsafe; and (4) not diagnosing and repairing in a timely manner the motor vehicles and motor vehicle equipment that were the subject of consumer complaints relating to the defective ignition switch. The District of Columbia asks that the court enter a judgment in its favor and enjoin GM from engaging in conduct that the court determined to be in violation of the CPPA; that it order the payment of statutory civil penalties in the amount of $1,000 per violation for each and every violation of the CPPA; and that costs and reasonable attorney fees be granted.

The consent order and judgment, agreed to by GM and the District of Columbia, would prohibit GM from claiming that a motor vehicle is "safe" unless GM has complied with the Federal Motor Vehicle Safety Standards applicable to the motor vehicle at issue; and claiming that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall. The judgment would also require GM to instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the United States can be certified as having passed GM’s 172-Point Vehicle Inspection and Reconditioning Process. Pursuant to the agreement, the District of Columbia is scheduled to receive $1,076,141.47 from the $120 million settlement, which was joined by attorneys general of Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. The attorneys general of these states in contemporaneous filings entered into settlement agreements with GM. Other examples are Florida and Texas. Only Arizona did not join the settlement.

Some settlement amounts. Some of the other amounts to be received by states from the settlement, as noted in attorneys general press releases, are: Delaware will receive $1.12 million; Illinois expects its share to be approximately $3.1 million; Massachusetts will receive $2,122,942.79—half of which will go to the General Fund and half to the attorney general’s Local Consumer Aid Fund, which funds the office’s Local Consumer Programs and Face-to-Face Mediation programs; Pennsylvania will receive $4.7 million; Texas’ share will be $7,353,446; Florida will receive over $6 million; New York will receive $4,331,339.27; South Dakota and Montana will each receive over $1.1 million; and California will receive over $7 million.

Companies: General Motors Co.

MainStory: TopStory SettlementAgreementsNews MotorVehiclesNews MotorEquipmentNews

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