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Orange County District Attorney Press Release

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Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release Case # 30-2014-00731038-CU-BT-CXC June 30, 2014

Contacts:

Susan Kang Schroeder Chief of Staff Office: 714-347-8408 Cell: 714-292-2718 Farrah Emami Spokesperson Office: 714-347-8405 Cell: 714-323-4486

CONSUMER PROTECTION LAWSUIT FILED AGAINST GENERAL MOTORS FOR DECEIVING BUYERS BY CONCEALING DEFECTS AND SELLING UNSAFE AND UNRELIABLE VEHICLES

 

SANTA ANA – The Orange County District Attorney (OCDA) filed a civil lawsuit against General Motors LLC (GM) for endangering motorists and the public by intentionally concealing serious safety defects in GM vehicles to avoid the cost of a recall or replacing defective parts. The complaint, filed June 27, 2014, states that GM endangered the public through deception regarding vehicle safety and reliability and gained advantage over its competitors by engaging in unfair business practices. 

 

Deceptive Practices

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.

 

Unfair Competition

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

“This case is about having safe cars on the road, because cars carry our most precious cargo. Orange County citizens rely on safe cars to transport and meet their families and friends, and get to work. Each driver of the road should be able to expect that the other cars on the road are safe and will not cause a harmful, preventable accident.”

 

“Our cars are the most expensive purchases we make, aside from our homes. If a consumer finds out after purchase that their car is defective, then the resale value is diminished and the consumer loses money on their investment. We must protect our consumers from businesses that put profits over people.”

 

“We must encourage all businesses to be fair and live up to safety standards, and must not allow those engaging in unfair practices to punish those businesses that don’t cut corners by compromising safety.”

 

Prayer for Relief

The OCDA filed a Complaint for Violations of the Unfair Competition Law (California Business and Professions Code § 17200) and the False Advertising Law (California Business and Professions Code § 17500) in the Superior Court of the State of California in Orange County. 

 

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.

 

The case Prayer for Relief asks that for the defendant be required to cease unlawful, unfair, deceptive, and fraudulent business practices as it pertains to both consumers and competitors.  The OCDA is seeking restitution for consumers, civil penalties, and injunctive relief. 

 

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