GM is accused of failing to disclose and/or concealing known defects in millions of GM vehicles. The safety defects include power steering, airbag, and brake-related problems. By knowingly hiding the existence of defects and marketing their vehicles as safe and reliable, the OCDA is charging that GM enticed consumers under false pretenses to purchase GM vehicles.
GM is charged with continuing to sell and lease its vehicles while knowingly concealing and suppressing information about the defects from California consumers. The complaint charges GM with valuing cost-cutting over safety, and intentionally falsely represented to the public that GM-manufactured vehicles were safe and reliable, despite its knowledge of the defects, to avoid the cost and negative attention of a recall.
The complaint states that, as a result of the defective vehicles and failure by GM to disclose defects to consumers prior to lease or purchase, victims have been injured and killed, owners and lessees of GM vehicles have suffered property damage, economic damage, and many are unable to sell or trade their cars.
GM is accused of engaging in fraudulent, unfair and unlawful business practices, which put an emphasis on profits over safety. To avoid the attention of regulators and cost of a recall, GM is accused of training its personnel to never use the words “defect,” “stall,” or other words suggesting that any GM-branded vehicles are defective. They are accused of routinely choosing the cheapest part supplier without regard for safety and discouraging employees from acting to address safety issues.
Under the Transportation Recall Enhancement, Accountability and Documentation Act and other consumer protection laws, when a manufacturer learns that a vehicle contains a safety defect, the manufacturer must promptly disclose the defect. Despite failure to adhere to the law for many years, GM was required to recall 17 million vehicles in 33 recalls covering various defects during the five months of 2014.
GM is accused of deceptive practices that gave the company an unfair advantage over their competitors, who did not engage in such practices.
Statements from District Attorney Tony Rackauckas
Prayer for Relief
Civil actions under the Unfair Competition Law and the False Advertising Law may be brought in the name of the People of the State of California by the District Attorney. These laws "are the basic tools of the Attorney General and the district attorneys in combating consumer fraud.”… “[D]istrict attorneys have an independent role in the enforcement of this state's false advertising laws." Lavie v. Procter & Gamble Co. (2003) 105 Cal. App. 4th 496, 503.