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General Motors was hit with a new $10 billion class action lawsuit this week over its ignition switch recall, alleging that the company’s actions hurt the resale values for millions of vehicles.
The GM class action lawsuit was filed by Anna Andrews in federal court in California on June 18. Unlike previous ignition switch lawsuits pursuing an economic loss recovery, this claims damages associated with vehicles that were not among the 2.5 recalled this year, indicating that the automaker should be required to compensate 15 million car and truck owners for diminished resale value.
The large number of members of the class are based on the company-wide loss in stature suffered by GM over the past several months, as it has been revealed that the company knew about ignition switch problems in certain Chevrolet, Pontiac and Saturn vehicles for several years, but failed to take action.
The company has taken a public beating on the issue, is under investigation in several criminal probes, and was fined $35 million by the National Highway Traffic Safety Administration. In an effort to show it has turned over a new leaf, GM has increased internal scrutiny and has recalled more than 20 million vehicles for a variety of different issues since February.
An internal investigation by former U.S. attorney Anton Valukas revealed a “pattern of incompetence” in the world’s largest automaker over the past decade.
The class action complaint alleges that GM caused damages for owners of the 15 million vehicles, which could see losses in value of between $500 and $2,600, regardless of whether they were involved in the ignition switch recall or not.
Andrews argues that she would not have bought her used Buick LaCrosse if GM’s vehicle defect problems had been known at the time. The day before the lawsuit was filed, GM announced it was recalling some 2005-2009 Buick LaCrosse vehicles due to ignition problems as well. It is unclear whether Andrews’ vehicle is affected.
GM faces a growing number of ignition switch recall lawsuits, including personal injury and wrongful death claims by people who were injured or lost loved ones when air bags failed to deploy during accidents, as well as economic lawsuits filed by investors and vehicle owners, who say that GM’s actions led to a depreciation of the value of the cars and the company’s stocks.
The company’s leadership has sworn to compensate personal injury victims and families in wrongful death cases, but said the company will fight economic damages claims.