June 15, 2015 / 4:24 PM / 2 years ago

GM plaintiffs add racketeering claim to recall lawsuits

A Chevy Traverse sits in the shop for service on a recall repair at Raymond Chevrolet in Antioch, Illinois, July 17, 2014.John Gress

NEW YORK (Reuters) - Plaintiffs suing General Motors Co over a series of safety-related recalls last year have accused it of working with a law firm and claims-management company to conceal an ignition-switch defect linked to 114 deaths.

The allegations came in an amended complaint filed late Friday in Manhattan federal court, where more than 200 lawsuits have been consolidated against GM over injuries, deaths and economic losses attributed to the ignition switch and other safety problems that prompted recalls of millions of vehicles.

The lawsuit seeks to include more than 20 million vehicle owners and requests more than $10 billion in damages, according to plaintiffs’ lawyers.

The complaint proposes certification of a class encompassing anyone who owned or leased a GM-branded car from when the company emerged from bankruptcy in 2009 through 2014, as well as anyone who purchased a car from post-bankruptcy “New GM.” Plaintiffs said the recalls tarnished GM’s brand and caused vehicles to lose as much as $4,000 in value.

The complaint was revised following a bankruptcy judge’s April ruling barring claims related to the pre-bankruptcy conduct of “Old GM.”

Lead plaintiffs’ lawyer Steve Berman said the amended complaint “focuses solely on New GM’s misconduct” to comply with the bankruptcy court’s decision, which plaintiffs plan to appeal.

The revised lawsuit said GM committed fraud and violated racketeering laws by covering up the ignition-switch defect. The complaint said GM, its outside law firm King & Spalding and claims-management company ESIS knew about the problem but kept it from private litigants and the public.

King & Spalding and ESIS are not named as defendants. Spokeswomen for King & Spalding and ESIS parent Ace Group declined to comment.

GM spokesman James Cain said the complaint contained no new information and that the company looked forward to “setting the record straight in court.”

GM recalled 2.6 million vehicles over the switch, which can slip and cut power to vital vehicle systems. It faces a federal criminal probe, and paid a $35 million fine over its delayed response to the defect.

The company set up an out-of-court compensation system for injuries and deaths linked to the switch, headed by lawyer Kenneth Feinberg. To date, the fund has paid claims for 114 deaths and 229 injuries.

The case is In re: General Motors LLC Ignition Switch Litigation, U.S. District Court for the Southern District of New York, No. 14-2543.

Reporting by Jessica Dye; Editing by Lisa Von Ahn

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