In addition to claims for personal injury, GM is faced with other suits related to the faulty ignition switches in 2.6 million recalled vehicles. Plaintiffs in various states have sued the company for the devaluation of their cars caused by the recall.
Since the claims arise from various states and jurisdictions, they have been consolidated in a multidistrict action in the United States District Court for the Southern District of New York. GM’s position is that it cannot be held liable when there has been no manifestation of the problem. In other words, if the switch did not malfunction, no claim of damage may be made.
Vehicle owners, on the other hand, contend that their cars have lost value because of the defect, even after they have been repaired, invoking the benefit of the bargain principle of contractual misrepresentation. Under that theory, the car buyers suffered because the vehicles being purchased were misrepresented as to their value—that is, the presence of the faulty switch made the cars worth less than the purchase price.
At issue currently in the case is whether a previous order by the court had dismissed the devaluation claim. In that order, the plaintiffs were given leave to file a fourth amended complaint. The devaluation claim was included in the fourth complaint, but GM contends that the court had dismissed that claim with prejudice, meaning it could be further raised. Plaintiffs contend it was not dismissed with prejudice, permitting the claim to be revised and narrowed.
Depending on the court’s ruling in this latest round of arguments, GM could be in for even more litigation over the devaluation of recalled GM vehicles. The notoriety of the problem, particularly GM’s inadequate recognition and remediation, could set these claims apart, and thus subject them to a benefit of the bargain analysis.
If you have been injured in car wreck, or if you believe you have a claim against GM because of the ignition switch recall, contact the Alexander Law Group, LLP online, or call 888.777.1776. We know that big business tries to avoid being held liable for its negligence, and we know how to stop that from happening.
