General Motors is facing even more legal trouble after recalling roughly 26.6 million vehicles in the US this year. The latest case comes from the Arizona Attorney General and alleges that GM executives knew about the problems with its models but avoided disclosing them to the public. At its maximum, the suit could force the automaker to pay $3 billion.
"It is difficult to find a brand whose reputation has taken as great a beating as has the New GM brand starting in February 2014 when the first ignition-switch recall occurred," the suit said, according to The New York Times.
The case makes Arizona the first state to file a lawsuit against GM for the recalls, but others are working together to build a case. "We're proceeding with our own suit because it's the best way to protect the citizens of Arizona," said attorney general Thomas C. Horne to The New York Times.
The suit's valuation is based on the state's consumer penalty laws, which put a company on the hook for up to $10,000 per violation. Spread over the estimated 300,000 recalled GM vehicles in the state, and the total could be $3 billion, according to the NYT.
"We have reviewed the complaint filed by the State of Arizona. It mischaracterizes the facts, the performance of our vehicles and our work to ensure the safety of our customers. We intend to vigorously defend the case," GM spokesperson Alan Adler said to Autoblog via email.
GM is could potentially pay billions of dollars in other lawsuits related to the recalls. A case in New York could cost the company $10 billion for alleged lost resale value on vehicles. If the business' bankruptcy protection fails then it could be hit with another $2 billion, as well. Also, the automaker's compensation fund has paid out for 33 deaths and 39 injuries, and the deadline for claims was recently extended to January 31. Despite all of this controversy, business hasn't suffered. Unit sales were the best 1980 in the second quarter, and GM beat quarterly estimates with a strong showing even in the US.
"It is difficult to find a brand whose reputation has taken as great a beating as has the New GM brand starting in February 2014 when the first ignition-switch recall occurred," the suit said, according to The New York Times.
The case makes Arizona the first state to file a lawsuit against GM for the recalls, but others are working together to build a case. "We're proceeding with our own suit because it's the best way to protect the citizens of Arizona," said attorney general Thomas C. Horne to The New York Times.
The suit's valuation is based on the state's consumer penalty laws, which put a company on the hook for up to $10,000 per violation. Spread over the estimated 300,000 recalled GM vehicles in the state, and the total could be $3 billion, according to the NYT.
"We have reviewed the complaint filed by the State of Arizona. It mischaracterizes the facts, the performance of our vehicles and our work to ensure the safety of our customers. We intend to vigorously defend the case," GM spokesperson Alan Adler said to Autoblog via email.
GM is could potentially pay billions of dollars in other lawsuits related to the recalls. A case in New York could cost the company $10 billion for alleged lost resale value on vehicles. If the business' bankruptcy protection fails then it could be hit with another $2 billion, as well. Also, the automaker's compensation fund has paid out for 33 deaths and 39 injuries, and the deadline for claims was recently extended to January 31. Despite all of this controversy, business hasn't suffered. Unit sales were the best 1980 in the second quarter, and GM beat quarterly estimates with a strong showing even in the US.
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