General Motors Recalls Result In $10 Billion Lawsuit

A new lawsuit filed today at the federal court in Riverside, California asserts the General Motors recalls, which have plagued the automotive company this year, may make the manufacturer liable for compensating car and truck owners for an amount in excess of $10 billion.

The lawsuit over the General Motors recalls is backed by a law firm called Hagens Berman Sobol Shapiro, and it is slightly different than some others that have been filed because of specific defects. Instead, this one is unique because it doesn’t focus on individual General Motors recalls, but instead alleges the company has caused its older model vehicles to lose anywhere between $500 to 2,600 in resale value.

The law firm wants General Motors to not just pay damages to individuals who were directly hurt by the recalls, but also a potential 15 million other people who own cars and trucks made by General Motors and are now suffering the aftermath because of damage to the brand and the automotive maker’s reputation.

Language used within the lawsuit paperwork is especially damning when it discusses the General Motors recalls and the way they were handled. It argues the approximately 40 recalls issued for over 20 million vehicles this year are indicative of General Motors’ desire to keep costs down, even if it means sacrificing safety and concealing known problems.

General Motors is the largest American automaker, and when discussing the recalls, the lawsuit alleges the company leaned on euphemisms and coached employees to use words with less negative connotations such as “failed” or “bad” to try and make the recalls seem less serious than they were.

The plaintiff in this multibillion dollar General Motors recalls lawsuit is named Anna Andrews. She resides in La Quinta, California and owns a 2010 Buick LaCrosse. However, the woman says if General Motors had done a more thorough job of disclosing the defects in its vehicles, she would have either paid less money for it, or perhaps, not purchased it at all.

This General Motors recalls lawsuit seeks class action status that involves people who either owned or leased GM vehicles sold between July 10, 2009 and April 1, 2014. It also includes people who later were forced to sell their vehicles at prices below market values.

Last year, General Motors made $3.8 billion in net earnings. That amount, compared with the potential financial impact of these legal troubles, spotlights just how damaging the General Motors recalls could be for the automaker that has already had a nightmare of a year.

[Image Credit: The Car Connection]