Amended complaint with racketeering claim filed in class action lawsuit against General Motors

Amended complaint with racketeering claim filed in class action lawsuit against General Motors

A class action lawsuit filed last year against the General Motors Company (GM) on account of their faulty ignition switches, was amended with an added complaint of racketeering on June 10, 2015. The plaintiffs are accusing GM for working with a law firm and claims-management company to conceal an ignition-switch defect linked to 114 deaths. Attorneys Hagens Berman and Lieff Cabraser representing plaintiffs filed this expanded class-action complaint bringing RICO (Racketeer Influenced and Corrupt Organizations) claims in the Manhattan Federal Court. The existing lawsuit consolidated more than 200 separate claims against GM over injuries, deaths and economic losses due to faulty ignition switches. These newly filed accusations are based upon the information revealed during the discovery phase of the ongoing lawsuit. The information shows that GM committed mail and wire fraud in connection with the ignition switch defect that causes cars to stall unexpectedly and disables the airbags.

The complaint also tends to propose certification of a class who owned or leased the company’s car from 2009 to 2014, through which the company remained bankrupt, as well as those who purchased from post-bankruptcy “New GM”. The complaint was revised based on the bankruptcy judge’s April ruling that barred claims related to the pre-bankruptcy conduct of “Old GM.” More than 20 million vehicle owners and about $10 billion in damages are included in the amended complaint.

The amended lawsuit claims fraud and violation of racketeering laws by covering up the ignition-switch defect committed by GM. It further accuses GM, law firm King & Spalding and claims-management company ESIS for concealing their knowledge about the defect and hiding it from private litigants and the public. King & Spalding and ESIS are however not the named defendants.

According to the plaintiffs’ lawyer, Steve Berman, the amended complaint “focuses solely on New GM’s misconduct” to comply with the bankruptcy court’s decision, which plaintiffs plan to appeal.

Approximately 2.6 million vehicles have been recalled by GM over the defective switch. GM has paid $35 million fine over its delayed response to the defect on a federal criminal probe. Further, the company’s compensation fund has paid claims for 114 deaths and 229 injuries, as an out-of-court settlement.