General Motors to face class action lawsuit for selling vehicles with faulty transmissions

GM lawsuit: A federal appeals court has ordered General Motors to face a class action lawsuit alleging that it violated the laws of 26 US states by knowingly selling hundreds of thousands of vehicles, trucks, and SUVs with faulty transmissions. The 6th US Circuit Court of Appeals has ruled that a lower court judge had the authority to allow owners to sue in groups for Cadillac, Chevrolet, and GMC vehicles which were equipped with 8L45 or 8L90 eight-speed automatic gearboxes and were sold between 2015 and 2019.

Drivers have reported that the vehicles at higher speeds and hesitate and lurch in lower gears, even after repair attempts. They also accused GM of instructing dealers to make severe changes “normal.” Requests for a response from GM were not responded to quickly. A three-judge panel from the Cincinnati-based appeals court released its verdict.

Class actions can lead to larger recoveries at a cheaper cost than if complainants were to suit individually. The GM litigation affects around 8,00,000 automobiles, including 5,14,000 in the certified classes. Vehicles include the Cadillac CTS, CT6, and Escalade; the Chevrolet Camaro, Colorado, Corvette, and Silverado; and the GMC Canyon, Sierra, and Yukon, among others.

In opposing class certification, GM claimed that most class members had never experienced problems and hence lacked standing to suit. It also stated that there were too many distinctions between class members to sustain group lawsuits. However, Circuit Judge Karen Nelson Moore has ruled that overpaying for allegedly defective vehicles was sufficient to establish standing.

She also stated that "exactly how, and to what extent, each of the individual plaintiffs experienced a shudder or shift quality issue is irrelevant" to whether GM suppressed known issues, and whether drivers would have found such information important. The court also rejected GM's assertion that many potential claims should be resolved through arbitration.

It remanded the matter to US District Judge David Lawson in Detroit, who certified the classes in March 2023. "We look forward to holding GM accountable before a Michigan jury," Ted Leopold, a Cohen Milstein Sellers & Toll partner who represents the drivers, said in a statement.

(with Reuters inputs)