GM Accused of Racketeering in Lawsuit Over Defective Cars

GM Accused of Racketeering in Lawsuit Over Defective Cars

by / Friday, 19 June 2015 / Published in Defective Products

The ongoing saga surrounding General Motors and their use of faulty ignition switches in vehicles continues to get more complicated. Lawyers handling a lawsuit against the automaker have now amended their suit to accuse General Motors of racketeering.

It’s important to note these racketeering charges are not the criminal charges from the U.S. Justice Department, which have recently been speculated to be coming. These charges stem from a lawsuit representing over 200 consumers who were impacted by the defective ignition switches that spurred the now-infamous recall of 2.6 million vehicles in 2014. The consumers are seeking more than $10 billion in damages for things such as medical expenses, wrongful death, and even diminished value of cars. Some claim the massive recall tarnished the image of vehicles made by General Motors and therefore diminished the resale value of their cars by up to $4,000.

The lawsuit was amended to include the racketeering claims on Friday, June 12, 2015. They claim General Motors violated the Racketeer Influenced and Corrupt Organizations (RICO) Act because they were aware these vehicles had defective ignition switches and worked with a law firm and a claims management company to hide that information from the general public and from private litigants.

In 2014, General Motors commissioned a report written by former U.S. Attorney Anton Valukas, which claimed there was no deliberate effort made to hide information about the faulty ignition switches. Instead, it focused on a “pattern of incompetence and negligence,” which led to GM Chief Executive Mary Barra firing 15 employees in connection with the case. Last year, General Motors paid a $35 million fine to the National Highway Traffic and Safety Administration (NHTSA) for failing to alert the agency to the defective product in a timely manner.

The problem with the ignition switches is that they could potentially slip out of the “Run” position and into the “Off” position while the car was being driven, sometimes under the weight under a heavy keychain or because the ignition was bumped by the driver’s knee. When this happened, it would cause important safety features such as power steering and brakes to fail, making the car more difficult to control, and airbags to fail to deploy.

The defective ignition switches had been used in vehicles manufactured by General Motors for over a decade before the recalls began in early 2014. General Motors began accepting claims from victims of accidents believed to be caused by the ignition switches in August 2014 and accepted them through January 2015. Injuries and deaths found to be definitely caused  by the ignition switches will be paid through a victim compensation fund. Claims are expected to be investigated through the summer. Currently, they have found 114 deaths and 229 injuries to be caused by the faulty ignition switches.

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