Newport Beach, California based Michaels Law Group said it filed a class action lawsuit against General Motors, relating to the massive recall of the company’s vehicles for ignition switch failure.
The lawsuit, filed in federal court in Los Angeles, alleges that GM knew of the safety defect in 2004 but continued to build and sell the cars to the public.
Go deeper with GlobalData
Lawyers said GM last February issued a recall of 1.4m US vehicles that used the faulty part. The ignition switch is prone to shutting off unexpectedly, leaving the driver without power to the car, and cutting off power steering, power brakes and airbags. GM has admitted that the faulty ignition switch has caused consumers to die. The company claims that the defect is responsible for 12 deaths, but other reports put the number at over 300.
Michaels Law Group said that, under National Highway Traffic Safety Administration (NHTSA) regulations, a manufacturer has five days to report a known safety defect, or face a fine of up to US$35m. In a recent letter to NHTSA, GM admitted that it opened an internal investigation in 2005 and designed a fix for the part, but “after consideration of the lead time required, cost, and effectiveness of each of these solutions, the [investigation] was closed with no action.”
On 4 March, 2014, Michaels Law Group founding member, Jonathan Michaels, published an article in the Los Angeles Daily Journal that, he claimed, helped expose the scandal.
“This is an unfortunate chapter in our nation’s history,” said Michaels. “It is unconscionable that the company allowed products to be put in the stream of commerce, knowing that people would die.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe law firm noted that federal prosecutors are now looking into whether GM executives should be criminally prosecuted. This comes on the heels of announcements by both the Senate and the House that congressional hearings will be conducted.
In a case with some similarities to some filed against Toyota following the ‘unintended acceleration’ recalls several years ago, this class action lawsuit against GM seeks to recover damages for all owners of the recalled vehicles for the loss of use of their vehicle, repairs and diminished value.
GM has preliminary reserved US$300m to pay out on recall claims. Michaels believes that the ultimate class action recovery will be substantially more, noting that the Toyota accelerator pedal lawsuit was settled for $1.6bn.
Just last week, Toyota settled with the US Department of Justice for $1.2bn in connection with its recalls.
