Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Arizona sues GM, saying it hid safety defects

Published 11/20/2014, 03:46 AM
Updated 11/20/2014, 03:46 AM
© Reuters. Arizona Attorney General Horne speaks about weapons and drugs seized from Sinaloa cartel during "Operation Pipeline Express" at a news conference in Phoenix

© Reuters. Arizona Attorney General Horne speaks about weapons and drugs seized from Sinaloa cartel during "Operation Pipeline Express" at a news conference in Phoenix

(Reuters) - Arizona State filed a lawsuit against General Motors Co (N:GM), claiming the automaker put the public at risk by intentionally concealing safety defects to avoid the cost of recalls.

Arizona was seeking $3 billion from GM for defrauding state consumers, the New York Times reported.

Arizona Attorney General Tom Horne said in a statement that the civil penalties could be up to $10,000 per violation. Hundreds of thousands of car owners and lessees in Arizona had been driving unsafe vehicles, he said.

The recalls in the court filing include problems with faulty ignition switches, which could slip out of position, cutting power to air bags and brakes. The case also covers numerous other parts, including airbags, wiring, brake lights and seat belts.

GM is already running a compensation program for faulty ignition switches, with the company sending letters to notify more than 5 million current and former owners of eligible vehicles.

Many of the safety issues relate to GM cars before it fell into bankruptcy but the attorney general said the new GM was liable, as it had concealed the existence of many known safety defects.

GM was not immediately available for comment outside of regular U.S. business hours. In April, it filed a court motion to enforce a bar on lawsuits stemming from pre-bankruptcy issues in cars sold before its 2009 bankruptcy.

The Arizona case argued that consumers had lost money as GM vehicles had fallen in value after the revelation of 60 serious safety defects affecting 27 million U.S. vehicles.

"The systematic concealment of known defects was deliberate, as New GM followed a consistent pattern of endless 'investigation' and delay each time it became aware of a given defect," the attorney general argued in the case complaint.

"New GM was not born innocent," he said.

© Reuters. Arizona Attorney General Horne speaks about weapons and drugs seized from Sinaloa cartel during "Operation Pipeline Express" at a news conference in Phoenix

The case is State of Arizona vs General Motors LLC, Case No. CV2014-014090, the Superior Court of the State of Arizona, County of Maricopa.

(Reporting by Rama Venkat Raman in Bangalore; Writing by Rodney Joyce; Editing by Robin Paxton)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.