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General Motors (GM) recently received a significant setback from a federal appeals court. The court has ordered GM to face a class action that alleges the company knowingly sold hundreds of thousands of vehicles with faulty transmissions. The decision is based on allegations of violations of the laws of 26 US states.
The 6th U.S. Circuit Court of Appeals ruled that the lower court judge had full authority to sue Cadillac, Chevrolet and GMC brand vehicles. The vehicles were equipped with the 8L45 or 8L90 eight-speed automatic transmission and were from model years 2015 to 2019.
Drivers have alleged that these vehicles continue to have problems with shuddering and shaking in high gears, despite repairs. In addition, hesitation and faltering have also been observed in lower gears. The complainants also accused GM of asking dealers to give assurances that these problems are normal.
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GM has not yet commented publicly on the case. The decision was handed down Wednesday by a three-judge panel of the Cincinnati-based appeals court.
Given the potential for equitable recovery from a class action, it may be more effective than individual litigation. The lawsuit covers about 800,000 vehicles, 514,000 of which fall into certified classes.
These vehicles include the Cadillac CTS, CT6, and Escalade; the Chevrolet Camaro, Colorado, Corvette, and Silverado; and the GMC Canyon, Sierra, and Yukon.
GM opposed class certification, saying most class members have never experienced transmission problems, so they don't have the standing to sue. The company also claimed there are too many differences among class members to justify group litigation.
However, Circuit Judge Karen Nelson Moore said proving customers overpaid is enough to establish standing claims. He also noted that looking at how many problems each individual plaintiff experienced is not as important as GM's concealment of information about the defective transmission.
The court also rejected GM's argument that many potential claims are subject to arbitration. The case is then sent back to U.S. District Judge David Lawson in Detroit, who certified the classes in March 2023.
"We look forward to holding GM accountable before a Michigan jury," said Ted Leopold, a partner at Cohen Milstein Sellers & Toll, which represents the drivers. The case is now set to proceed in court.
The case is known as Spearly et al v. General Motors LLC, 6th U.S. Circuit Court of Appeals, No. 23-1940.
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