General Motors sued in Texas over ignition defects

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General Motors Co. was sued on behalf of vehicle owners over an ignition flaw in some small-model cars that the automaker has linked to 12 deaths as it faces regulators’ questions about its recall of them.

GM has known about the defect since 2004, according to the complaint filed Friday in federal court in Corpus Christi, Texas. Bob Hilliard, a lawyer who filed the complaint, said he seeks to recover for owners the lost value of about 2 million cars covered by the recall, plus damages of $6 billion to $10 billion.

“These vehicles, all they have to do is get on the road for this defect to manifest,” Hilliard said in a phone interview. “This is a true safety defect.”

GM has said it identified 12 deaths in connection with the recall of 1.6 million models made in the mid-2000s, including some Chevrolet Cobalts and HHRs and other Opel, Pontiac and Saturn models. GM has said it’s continuing to review data and information related to the recall.

The GM recall and the multiple U.S. investigations that it has spurred come as the company has sought to shed the “Government Motors” stigma tied to its bankruptcy and $49.5 billion U.S. bailout.

“GM is focused now on ensuring the safety and peace of mind of our customers involved in the recall,” Greg Martin, a company spokesman, said in e-mail. “Our principle throughout this process has been to the put the customer first, and that will continue to guide us.”

Since the U.S. sold its last GM shares in December, the company has named Mary Barra as CEO, making her the first woman to lead a major automaker. A lineup of new vehicles helped improve GM’s reputation among consumers and boosted quality to record levels, according to reviewers including J.D. Power & Associates and Consumer Reports magazine.

Hilliard is seeking class-action status for his case to represent all vehicle owners affected by the recall.

The lawsuit is reminiscent of claims faced by Toyota Motor Corp., which recalled more than 10 million vehicles starting in 2009. Toyota last year received approval for a settlement valued at $1.6 billion to resolve economic loss claims and is currently negotiating the settlement of hundreds of personal-injury lawsuits.

GM announced the recall in February, despite learning of problems with the ignition switch in 2001 and issuing related service bulletins to dealers with suggested remedies in 2005.

GM said that when the ignition switch was jostled, a key could turn off the car's engine and disable airbags, sometimes while traveling at high speed. GM has said it received reports of 12 deaths and 34 crashes in the recalled cars.

Carl Tobias, a professor at the University of Richmond School of Law who specializes in products liability, said he did not expect GM would have to pay as much as Toyota did if it seeks to resolve the economic loss claims.

The GM recall applied to older models and was significantly smaller than the Toyota recall, although that could change as the investigations against GM continue, he said.

GM also has offered owners of recalled vehicles $500 toward the purchase of a new GM vehicle, a factor that could mitigate any liability, he said.

Bloomberg and Reuters contributed to this report.

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