Arizona sues GM for $3 billion over recalls

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Published: November 21, 2014 12:11:51 AM

The attorney general of Arizona said on Wednesday that the state had filed suit against General Motors...

The attorney general of Arizona said on Wednesday that the state had filed suit against General Motors, claiming that the automaker had defrauded the state’s consumers of an estimated $3 billion.

The suit is the first major legal action against GM over its record number of recalls this year, most notable among them one for a defective ignition switch in 2.6 million small cars that was delayed for decades.

The complaint was harsh and unsparing in its criticism of GM, suggesting the automaker intentionally misled consumers through its advertising, website and public statements, and that some of its top leaders were complicit in the alleged misdeeds. It said “New GM,” the term used for the company that emerged from bankruptcy in 2009, “was not born innocent.”

“It is difficult to find a brand whose reputation has taken as great a beating as has the New GM brand starting in February 2014 when the first ignition-switch recall occurred,” the complaint said.

In filing suit, Arizona has broken from a group of 48 state attorneys general that has been pursuing a multistate investigation into GM for its handling of the ignition-switch defect. The state had been on the executive committee of that multistate inquiry, led by South Carolina and Ohio.

“We’re proceeding with our own suit because it’s the best way to protect the citizens of Arizona,” said Attorney General Thomas C Horne, a Republican. “GM represented that it was taking care of the safety of its cars, and in fact there were serious defects that it did not disclose to the public for years.”

The complaint offers precise calculations of the losses suffered by owners of GM vehicles, and suggests that “no reasonable consumer” would now buy a GM vehicle for the same price had “the brand continued to mean safety and success.”

“It manufactured and sold vehicles that were not safe, including hundreds of thousands in Arizona,” the complaint said.

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