$10 Billion Lawsuit Filed Against GM Claims Recall Damaged Brand

Jun 19, 2014 10:27 AM EDT | Matt Mercuro

A lawsuit filed this week claims General Motors should compensate millions of car and truck owners for lost resale value, potentially exceeding $10 billion, because of a number of recalls and deadly delay in recalling vehicles with defective ignition switches has hurt the automaker's brand.

The complaint filed on June 18 with the federal court in Riverside, California GM hurt customers by concealing known defects and valuing cost-cutting over safety, leading to approximately 40 recalls covering 20 million vehicles in 2014.

A number of late-model vehicles lost approximately $500 to $2,600 in resale value as a result, according to the complaint.

Hagens Berman Sobol Shapiro, which filed the lawsuit, is the first trying to force GM to pay a potential 15 million car and truck owners, though he expects the case to be worth closer to $10 billion.

"GM's egregious and widely publicized conduct and the never-ending and piecemeal nature of GM's recalls has so tarnished the affected vehicles that no reasonable consumer would have paid the price they did when the GM brand meant safety and success," the complaint said.

The plaintiff is Anna Andrews, a resident of La Quinta, California, according to Reuters.

Andrews said she would not have bought her used 2010 Buick LaCrosse, or would have paid less for it, had GM disclosed vehicle defects earlier.

The lawsuit is seeking class-action status for those who owned or leased GM vehicles sold from July 10, 2009 through April 1, 2014, or those who later sold such vehicles at cut-rate prices.

At least 13 deaths have been linked to the recall so far.

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