Attorney General Josh Shapiro Reaches Settlement with General Motors over Defective Ignition Switches

October 19, 2017 | Topic: Consumers

LEHIGHTON — Surrounded by family members of a 21-year-old Northeast Pennsylvania woman killed in a GM car with a defective ignition switch, Attorney General Josh Shapiro today announced a $120 million national settlement with General Motors and 49 state Attorneys General over a long-running consumer protection investigation in which GM concealed safety issues relating to the ignition switches.

The GM ignition switch defect was one of the deadliest auto recalls in history. GM’s faulty ignition switches caused vehicles to lose power and turn off while driving. According to a fund set up to compensate victims there were at least 124 deaths and 266 injuries caused by the defect.

More than 9 million GM cars were recalled nationally because of this defect, including 412,000 cars in Pennsylvania.

As part of the settlement paid by GM, $4.7 million will go to the Pennsylvania Office of Attorney General to investigate and prosecute future deceptive practices that harm Pennsylvania consumers.

“Today we’re holding General Motors accountable for misleading consumers about the safety of their cars and changing their corporate behavior so public safety comes first,” Attorney General Josh Shapiro said. “This settlement will help us investigate and prosecute similar cases of corporate misconduct in order to protect Pennsylvanians.”

The settlement concludes an investigation by Attorneys General into GM’s failure to disclose safety defects associated with faulty ignition switches in numerous models of GM vehicles. Under certain conditions, the ignition switches could be moved from the “Run” position to the “Accessory” or “Off” position, causing the car to lose power to its electrical systems – including power steering and power brakes. If a crash occurred during this loss of power, the vehicle’s airbags also could fail to open.

GM was required to pay out $595 million into a nationwide settlement fund in 2015 to settle 124 death cases and hundreds of injury cases arising from faulty ignition switches and accidents in GM vehicles.

This is in addition to a $900 million fine GM was required to pay as well in connection with its misconduct. Additionally, there were other private lawsuits against GM which were filed.

The Attorneys General believe GM employees knew as early as 2001 the ignition switch posed a serious safety threat because it could cause airbag non-deployment. Despite this knowledge, GM personnel decided it wasn’t a concern and delayed making recalls. GM continued to market the reliability and safety of its motor vehicles that were equipped with the defective ignition switch.

Under the settlement announced today by Attorney General Shapiro, GM is required to improve the recall process, ensure safe vehicles and protect whistleblowers and empower employees to report safety issues. Specifically:

  • Maintain a Vehicle Safety Owner Engagement Team to improve and enhance recall awareness to car owners with open recalls – GM has to provide a report within 60 days after the one-year anniversary of this agreement summarizing their efforts.
  • Not represent that any GM car is safe unless they have complied with Federal Motor Vehicle Safety Standards as set by the National Highway Traffic Safety Administration.
  • Maintain a Global Vehicle Safety Organization that identifies and investigates safety issues.
  • Maintain a “Speak Up for Safety” program for its employees to report safety-related issues and require all U.S. employees to confirm annually that they have reported safety issues appropriately — and not faced internal reprisals as a result.

The Office of Attorney General brought its claims in this case against GM under the Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.

“This case is about much more than GM paying for their deception,” Attorney General Shapiro said. “It’s about changing corporate behavior and protecting Pennsylvanians well into the future.”

Attorney General Shapiro highlighted the case of Kelly Ruddy, a 21-year-old woman from Northeastern Pennsylvania, who died in a 2010 crash on I-81 when she lost control of her mother’s 2005 Chevy Cobalt, reportedly due to GM’s faulty ignition switch. The car flipped, Kelly was thrown from the vehicle, and later died.  Kelly was a Marywood University student who worked at the school’s library.

“General Motors took our last surviving child, everything we had,” said Mary Ruddy, who lost her oldest daughter to an illness shortly before Kelly died. “I’m glad to see Attorney General Shapiro standing up for us and our daughter and deeply appreciate this group of Attorneys General holding GM accountable for their corporate misconduct and defective vehicles.”

Pennsylvania was part of the Executive Committee for this multistate group – which also included the Attorneys General of Ohio, South Carolina, Connecticut, Florida, Maryland, Michigan, New Jersey and Texas. Other members of the multistate are Alabama, Alaska, Arkansas, California, Colorado, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, 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.

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