Lawsuit Against GM Alleges Recalls Damaged Brand Value

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GM’s ongoing recall fiasco has become a veritable bonanza for attorneys. A new lawsuit filed Wednesday, June 18th claims General Motors Company (NYSE:GM) should compensate car and truck owners across the country for lost resale value given that the ongoing series of recalls and years-long delay in recalling cars with defective ignition switches has significantly damaged the company’s brand.

General Motors Company (NYSE:GM) spokesman Greg Martin had no specific comment regarding the lawsuit. He did say that customers and analysts recognized the strength of the GM brand and that this market recognition has led to increased sales, higher prices and residual values.

GM malfeasance harmed customers

The new complaint filed at the federal court in Riverside, California today alleges GM harmed customers by concealing known defects and valuing profits over safety. The suit points out General Motors Company (NYSE:GM) has issued a record 39 recalls covering more than 20 million vehicles this year alone.

It continued to say General Motors Company (NYSE:GM)’s malfeasance has caused a broad range of late-model GM vehicles to lose roughly $500 to $2,600 of their resale value.

Law firm Hagens Berman Sobol Shapiro, filers of the lawsuit, said the case might exceed $10 billion in damages, and is the first lawsuit trying to make the automaker pay a potential 15 million GM car and truck owners for damage to its brand and reputation.

Details of the case

The plaintiff named in the case is Anna Andrews, who lives inLa Quinta, California. According to the complaint, she would not have bought her used 2010 Buick LaCrosse, or would have paid less for it, if General Motors Company (NYSE:GM) had adequately disclosed vehicle defects.

Andrews’ lawsuit is looking to claim class-action status for everyone who owned or leased GM vehicles sold between July 10, 200, and April 1, 2014, or who later sold such vehicles at below-market prices.

However, it should be noted that vehicles impacted by the earlier ignition-switch recalls are not included in this lawsuit.

The case is officially known as Andrews v. General Motors LLC, U.S. District Court, Central District of California, No. 14-01239.

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