Federal Judge Could Force GM To Park All Vehicles Involved In Switchgate

April 3, 2014

The fate of 2.59 million flawed automobiles could be determined in Corpus Christi, Texas today. According to Bloomberg, that's where U.S. District Judge Nelva Gonzales Ramos is hearing a case against General Motors, and one of the outcomes could be forcing the automaker to tell customers to park their recalled vehicles until further notice.

Interestingly, this particular lawsuit didn't stem from accidents, injuries, or deaths associated with the dodgy ignition switches found on many Chevrolet, Pontiac, and Saturn vehicles from the 2003-2007 model years. Rather, this case came from Charles and Grace Silvas, who own a 2006 Chevy Cobalt. They're upset that their vehicle has diminished drastically in resale value because of the high-profile recall, and they've asked that their case be granted class action status.

Plaintiffs are seeking up to $10 billion in damages from GM. Could they succeed? Perhaps, though they're unlikely to receive such a large sum. A similar lawsuit was brought by Toyota owners after the Toyota/Lexus recall fiasco of 2010, and that case was settled last year for "a mere" $1.6 billion.

The "park it" order would be a side-effect of the Silvas' lawsuit -- a "fail-safe solution" to the problem of GM cars (and steering, brake, and airbag systems) shutting off without warning. The "park it" order would likely stay in effect until a full recall and repair of affected vehicles could be carried out.

What would a "park it" order cost GM?

1. Huge brand damage. If you think GM's reputation is tarnished now, imagine how shoppers would feel if a federal judge told 2.59 million of their friends, neighbors, and family members that their GM vehicles are so unsafe, they shouldn't be driven at all.

2. Significant monetary implications. Beyond the $10 billion sum plaintiffs seek, a "park it" order would likely force GM to supply owners with loaner vehicles until their recalled cars are repaired. Technically speaking, GM is already providing loaner vehicles, but only upon request. The "park it" order would make the offer mandatory for all 2.59 million customers, which could cost GM a very pretty penny -- especially if the recall drags on.

Will Judge Ramos grant Silvas v. General Motors LLC class action status? Will she issue a "park it" order for the cars involved in "Switchgate"? We'll keep you posted. 


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