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Exclusive: GM Class Action Lawyer Discusses Recall Suit

Exclusive: GM Class Action Lawyer Discusses Recall Suit

Earlier this year Hagens Berman, the law firm that won a $1.6 billion class action suit against Toyota (NYSE: TM) for the company’s wave of 2009-2011 recalls, was appointed interim lead counsel of the class action lawsuit against General Motors (NYSE: GM) .

Unless the court appoints another firm, Hagens Berman will lead the case.

In an exclusive interview with Benzinga, Hagens Berman partner Rob Carey discussed the case.

Carey began by describing one of the key differences between Toyota’s and General Motors’ situations; that Toyota’s recalls dealt with complex code that would be difficult for the average jury to understand. The General Motors case, on the other hand, deals with “mechanical engineering that somebody with a third grade education can understand.”

This does not, however, mean a settlement should be reached more quickly; the 2009 bankruptcy filing could be a major complication.

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Carey described the atmosphere after GM had already begun recalling vehicles.

“No one had filed yet and that tells you a lot about the field of the bankruptcy,” he said, particularly since lawyers typically do not sit on their hands when a situation of this nature arises.

General Motors has implied that it is not responsible for economic loss before the company filed for bankruptcy. “Now, I think there has been so much of a firestorm beyond that point," Carey notes, "that its going to be hard for anyone to say at some point that GM shouldn’t answer for some of the harm.”

The economic loss lawsuit (i.e., lost resale value due to the recalls) will have much more of an impact on the company than the death and serious injury cases, according to Carey. A few hundred people may be affected by injury, but “almost 30 million vehicles have been recalled and it's only halfway through the year," he said. "The previous record [of cars recalled in a year] was 10 million, held by the GM... I can’t tell you how astounding this recall number is.”

Almost every car recalled is also affected by a drop in resale value. This is especially true for consumers of General Motors’ entry level vehicles. The Chevy Cobalt, for example, has given up roughly $1,000 of value on a $5,000 car, according to Carey.

This is the first of a two-part series. Up Next: Carey’s thoughts on the value of a settlement.

Posted-In: General Motors General Motors lawsuit General Motors recall Hagens BermanNews Legal Top Stories Interview Best of Benzinga


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