GM to face big class action over faulty transmissions

A federal appeals court has mandated that General Motors (GM) must confront a class action lawsuit alleging the company violated laws in 26 U.S. states by knowingly selling hundreds of thousands of vehicles with defective transmissions. This decision was handed down by the 6th U.S. Circuit Court of Appeals, which upheld a lower court judge's discretion to allow drivers to sue collectively over a range of Cadillac, Chevrolet, and GMC vehicles equipped with 8L45 or 8L90 eight-speed automatic transmissions. The affected vehicles were sold during the 2015 to 2019 model years.

The plaintiffs in the case claim that these vehicles exhibit significant performance issues, including shuddering and shaking when in higher gears, as well as hesitation and lurching in lower gears. These problems reportedly persisted even after attempts were made to repair the vehicles. Moreover, the lawsuit alleges that GM instructed its dealers to reassure customers that harsh shifts were "normal," potentially downplaying the severity of the issue.

As of the time of reporting, GM had not provided an immediate response to requests for comment on this legal development. The ruling was issued by a three-judge panel of the Cincinnati-based appeals court on the day prior to the report.

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The significance of allowing this case to proceed as a class action cannot be overstated. Class actions typically enable plaintiffs to achieve greater recoveries at a lower cost compared to individual lawsuits, making them a powerful tool for consumers seeking redress against large corporations.

The scale of this litigation is substantial, encompassing approximately 800,000 vehicles, with 514,000 of these included in the certified classes. The affected models span a wide range of GM's product lineup, including popular vehicles such as the Cadillac CTS, CT6, and Escalade; Chevrolet Camaro, Colorado, Corvette, and Silverado; and GMC Canyon, Sierra, and Yukon, among others.

GM had opposed class certification on several grounds. The company argued that most members of the proposed class had never experienced problems with their vehicles and therefore lacked standing to sue. Additionally, GM contended that there were too many differences among class members to justify group lawsuits.

However, Circuit Judge Karen Nelson Moore rejected these arguments. She ruled that the act of overpaying for allegedly defective vehicles was sufficient to establish standing for the plaintiffs. Furthermore, Judge Moore stated that the specific details of how and to what extent individual plaintiffs experienced transmission issues were irrelevant to the core allegations of the case – namely, whether GM concealed known defects and whether this information would have been material to drivers' purchasing decisions.

The appeals court also dismissed GM's assertion that many potential claims should be subject to arbitration rather than litigation. Following this ruling, the case has been remanded to U.S. District Judge David Lawson in Detroit, who had initially certified the classes in March 2023.

Ted Leopold, a partner at Cohen Milstein Sellers & Toll representing the drivers, expressed optimism about the decision, stating, "We look forward to holding GM accountable before a Michigan jury." This statement underscores the plaintiffs' determination to pursue their claims and seek justice for the alleged misconduct.

This legal development represents a significant challenge for General Motors, potentially exposing the company to substantial financial liability and reputational damage. It also highlights the ongoing issues surrounding automotive quality control and corporate responsibility in the face of alleged defects. As the case progresses, it will likely be closely watched by both the automotive industry and consumer rights advocates, potentially setting precedents for how similar cases are handled in the future.