GM Faces Legal Battle Over Transmission Issues

Lawsuit

General Motors must defend itself in a class-action lawsuit alleging that the company sold vehicles with faulty transmissions, creating a significant legal and public relations challenge for the automaker.

At a Glance

  • GM faces a class-action lawsuit for allegedly selling vehicles with defective transmissions.
  • The 6th U.S. Circuit Court of Appeals ruled that drivers from 26 states can sue GM in groups.
  • The lawsuit involves Cadillac, Chevrolet, and GMC vehicles from model years 2015-2019.
  • Approximately 800,000 vehicles are affected, with 514,000 in the certified classes.
  • GM is accused of telling dealerships to inform customers that transmission issues were “normal.”

Class Action Lawsuit Details

General Motors is embroiled in a class-action lawsuit alleging that the company’s vehicles have defective transmissions, causing sudden jerking, hesitation, and excessive shuddering. The 6th U.S. Circuit Court of Appeals recently ruled that drivers from 26 states could proceed in groups, providing a pathway for affected consumers to hold the automaker accountable in court.

The lawsuit, impacting around 800,000 vehicles, involves Cadillac, Chevrolet, and GMC models equipped with 8L45 or 8L90 eight-speed automatic transmissions from 2015 to 2019. Vehicles cited include Cadillac CTS, CT6, Escalade; Chevrolet Camaro, Colorado, Corvette, Silverado; and GMC Canyon, Sierra, and Yukon. Alleged transmission issues encompass shaking in higher gears and hesitating and lurching in lower gears.

Court’s Stance and GM’s Response

Circuit Judge Karen Nelson Moore dismissed General Motors’ arguments against class certification. The judge emphasized that overpaying for a defective vehicle grants plaintiffs sufficient standing to sue. The court also rebuffed GM’s attempts to move claims to arbitration, solidifying the class-action approach and returning the case to U.S. District Judge David Lawson in Detroit for further proceedings.

“We look forward to holding GM accountable before a Michigan jury.” – Ted Leopold, a partner at Cohen Milstein Sellers & Toll

GM has argued that a majority of the class members did not experience these problems and therefore lacked standing to sue. Nevertheless, the court emphasized that the central issue is whether GM concealed known defects, rather than the extent to which individual plaintiffs experienced transmission problems.

Potential Consequences for GM

General Motors finds itself under significant scrutiny, both legally and publicly. The court’s decision signals substantial evidence backing the plaintiffs’ claims and shifts the focus to how the company managed these defects. If proven, this could have wide-ranging implications, not only in terms of financial penalties but also in damaging public trust.

“GM has been accused of knowing about faulty transmissions and instructing dealers to downplay the issue to customers.” – Stewart Burnett

The case aims to uncover whether GM knowingly sold defective vehicles and instructed dealerships to reassure consumers these issues were “normal.” As the case progresses, it will likely expose the company to increased public and regulatory scrutiny.

Sources

1. General Motors Under Fire for Allegedly Selling Defective Vehicles

2. GM faces class action over faulty transmissions, federal appeals court rules

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