 "General Motors escapes some claims from 2014 recalls")
A US judge on Friday dismissed some claims brought against General Motors by customers seeking compensation for a drop in vehicle resale values after a rash of safety recalls in 2014, including one for a faulty ignition switch.
US District Judge Jesse Furman in Manhattan federal court dismissed racketeering and some state-law claims, as well as claims from customers whose vehicles were not allegedly defective when sold.
Plaintiffs' pursuit of damages based purely on perceived harm to GM's brand following more than 70 recalls in 2014 was "unprecedented and unsound," Furman wrote.
Recognising the so-called "brand devaluation theory" would open the door to a flood of claims by consumers who bought any product from a manufacturer subsequently hit by a scandal or found to have produced an unrelated defective product, he said.
Plaintiffs' lawyers said they were seeking as much as $10 billion in damages in the proposed class actions. GM spokesman Jim Cain said that the company would continue to defend the remaining claims. "The court made it clear the plaintiffs overreached in many aspects of their complaint, and the ruling significantly curtails the scope of their potential recovery," he said. The company has paid $2 billion in criminal and civil penalties and settlements over the switch, which can slip out of place and cut power to air bags, steering and brake systems.
The part has been linked to 124 deaths and 275 injuries. GM has admitted that some employees knew about the issue for more than a decade before a recall was ordered.
