AG Fox Reaches $120 Million Settlement with GM Company Over Defective Ignition Switch

Attorney General Tim Fox announced today a $120 million settlement with General Motors Company (“GM”) over allegations GM concealed safety issues related to ignition-switch-related defects in GM vehicles.

The settlement, reached between the attorneys general of 49 states and the District of Columbia and General Motors Company (“GM”), concludes a multistate investigation into the auto manufacturer’s failure to timely disclose known safety defects associated with unintended key- rotation-related and/or ignition-switch-related issues in several models and model years of GM vehicles.

“General Motors hid this ignition switch defect for several years and marketed their cars to consumers as safe, reliable vehicles.  Instead, people died or were injured when their ignition quit, their power steering went out, or their airbags didn’t deploy,” Attorney General Tim Fox said.  “The company’s decision to hide this information from the public came at a steep price, both in terms of lives lost and in settlement monies paid out.  Let’s hope, for the sake of all its consumers, that GM will be more accountable and transparent in the future.”

In 2014, GM issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over 9 million vehicles in the U.S. The recalls involved a defective ignition switch which, under certain conditions, could move out of the “Run” position to the “Accessory” or “Off” position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes.  If a collision occurs while the ignition switch is in the “Accessory” or “Off” position, the vehicle’s safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

As the states alleged, certain employees of GM and General Motors Corporation (which went through bankruptcy in 2009), knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. However, despite this knowledge, GM personnel decided it wasn’t a safety concern and delayed making recalls. GM continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition switch.

The states alleged that these actions were unfair and deceptive and that the automaker’s actions violated state consumer protection laws, including Montana Code Annotated 30-14-103.

Under a consent judgment, which will be presented to the First Judicial District Court, GM shall:

• Not represent that a motor vehicle is “safe” unless they have complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue.
• Not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall.
• Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the U.S. and included in a recall is eligible for certification and, if there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a customer.

GM also agreed to pay the participating attorneys general a total of $120 million, of which Montana’s share is $1,137,804.  Montana’s settlement monies will go its Office of Consumer Protection to be used for operational expenses and consumer education.

In addition to Montana, the multistate group – led by Ohio, South Carolina, Connecticut, Florida, Maryland, Michigan, New Jersey, Pennsylvania, and Texas – includes  Alabama, Alaska, Arkansas, California, Colorado, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Click here to view the complaint document.