GM Sued in National Class Action Case Over Ignition Switch Fraud

Newport Beach, California (March 21, 2014) – Michaels Law Group, APLC filed a class action lawsuit today 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.

In February, GM issued a recall of 1.4 million U.S. 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.

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 $35 million. 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 March 4, 2014, Michaels Law Group founding member, Jonathan Michaels, published an article in the Los Angeles Daily Journal that 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.”

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.

The class action lawsuit 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 $300 million to pay out on recall claims. Michaels believes that the ultimate class action recovery will be substantially more, noting that the Toyota gas pedal lawsuit was settled for $1.6 billion.

About MLG Automotive Law 

Located in Newport Beach, California, Michaels Law Group is a full service business law firm, focusing on the automotive industry. Michaels Law Group has litigated cases against nearly every major automotive manufacturer, and is counsel on the 2013 class action case against Kia Motors relating to Kia’s misstated fuel economy claims. Michaels Law Group is also representing numerous terminated Chrysler dealers in a lawsuit against the United States for violation of the U.S. Constitution, related to the 2009 termination of their franchises – a case that many believe will ultimately be decided by the U.S. Supreme Court.

By |2018-07-18T17:17:04+00:00March 21st, 2014|Categories: Auto Industry Attorney, Auto Recalls, Class Action|Tags: , , , , , |Comments Off on GM Sued in National Class Action Case Over Ignition Switch Fraud

About the Author:

Jonathan Michaels has litigated some of the most important cases in the automotive industry. He is responsible for filing Ponce v. General Motors – a national class action case against GM for the concealment of a deadly defect in its vehicles for 13 years; and Spitzer Motor City v. U.S. – where he represented terminated Chrysler dealers against the U.S. for the “taking” of their franchises in 2009, a violation of the 5th Amendment. He has also litigated cases against nearly every major auto manufacturer, including GM, Audi, Maserati, Mitsubishi, Kia, Nissan, Honda, AM General, Isuzu, Toyota, Hyundai, Harley-Davidson, Ford, Chrysler, Tesla, Volvo, Volkswagen, Aston Martin, Land Rover, Mercedes and Porsche.