Arizona State filed a lawsuit against General Motors, claiming the automaker put the public at risk by hiding safety defects to avoid the cost of recalls.
The state was looking for an estimated $3 billion from GM, the New York Times reported.
Arizona Attorney General Tom Horne said civil penalties could reach up to $10,000 per violation, according to Reuters. Hundreds of thousands of "unsuspecting" vehicle owners and lessees have been driving "unsafe vehicles," he said.
GM said in a statement on Thursday it hasn't had the chance yet to read and access the complaint. The automaker did say it was committed to recalling vehicles proactively whenever a safety issue is identified.
GM has been hurt by a number of different lawsuits in 2014 since it announced the recall of 2.6 million vehicles over a problem with the ignition switches could cause it to slip out of position, cutting power to steering, air bags and brakes.
Recalls have grown to include a number of issues affecting millions of vehicles worldwide. Nearly 300,000 of the vehicles recalled this year were registered in Arizona, according to a report by the New York Times.
The attorney general said the case is the first by a U.S. state against GM for its supposed role in hiding knowledge of defects and not recalling vehicles sooner.
Arizona cited ignition switches and a number of other car parts, like airbags, wiring, brake lights and seat belts, in its suit.
Though many issues relate to vehicles made before GM went bankrupt, Horne said new GM was liable since it had concealed known safety defects, according to Reuters.
"New GM was not born innocent," he said in the filing this week.
GM claims it shouldn't face lawsuits based on safety issues on vehicles made before its 2009 bankruptcy.
The automaker is running a compensation program for the faulty ignition switches.
Arizona claims consumers lost money since GM vehicles fell in value. It also said GM Chief Executive Mary Barra, while she was head of product development, was notified in 2011 of a safety defect in the electronic power steering of more than a few cars.