GM spanked in $102M class action lawsuit – Should RVers go after Elkhart?

A federal jury in California has hit General Motors with a whopping verdict. The US District Court for the Northern District of California says GM must pay out $102.6 million to folks who owned GM-built rigs with 5.3-liter V8 engines that had excessive oil consumption. The class action lawsuit was filed on behalf of 38,000 owners and lessees. It begs the question raised by so many of our readers who feel shafted by the RV industry: Why not bring class action suits against RV manufacturers?

No recalls issued

class action

The California case, Raul Siqueiros, et al. v. General Motors LLC, was filed in 2016. The suit claimed that GM had hidden an engine defect that caused excessive oil consumption. In addition to the costly and irritating oil-sucking, if owners weren’t paying attention to oil levels, hesitation, stalling, and even engine damage resulted.

The Generation IV Vortec 5300 LC9 engines first went into production in the 2011 model year. It wasn’t long before the complaints came rolling in. Court records indicate the GM initially told mechanics to simply clean the piston rings. That didn’t work, so a ring redesign was next up. That and other “ineffective” remedies finally led the Big Auto Giant to shut down production on the engine after 2014. No recalls were ever issued.

“Successful” case?

But where did this leave owners of Chevy Avalanche, Silverado, Suburban, Tahoe, and GMC Sierra, Yukon, and Yukon XL vehicles with the bum engines? Unhappy enough to look for solutions in the courts. In California, the firm DiCello Levitt filed the class action lawsuit that proved to be successful.

But hang on … just for whom was there success? Each of the 38,000 owners or lessees covered in the class action is to be awarded how much? The jury order is for $2,700 each. But how much money did owners put into trying to keep their vehicles going? Pumping additional quarts of oil into the engine is one thing. Fighting with fouled plugs is maddening. But what about other damage that can come from loss of oil or oil breakdown? Can you say, “broken rods,” “worn crankshaft,” and other horrific internal engine damage?

Class action suits—both good and bad

Class action lawsuits have some good things to be said about them. Plaintiffs involved in a class action suit don’t have to worry about having a lot of time and energy invested. Don’t “opt out” of the case, and it’s all handled for you. And the old “strength in numbers” adage works here, too. A class action suit is more likely to bring a settlement to its members, as opposed to each individual filing suit on their own.

On the other hand, as is shown in the California GM Vortec suit, just because you “won” the case doesn’t mean you’re going to be “made whole.” For some in this case—maybe many—they won’t be “made whole,” but may well still be “in the hole,” when considering how much money they may have spent trying to get their vehicles fixed. And once you sign on to a class action suit, your right to individually sue the offender is gone. For the California plaintiffs, $2,700 is as much as they’ll ever see. And even that could well be in question—GM says it will appeal the decision in the case.

Should RV owners consider class action litigation?

So what about class action litigation for RV owners? There are plenty of horror stories about “new” rigs coming out of Elkhart, and elsewhere, where RV owners have been stuck waiting months and months to use their rigs due to seeming shoddy workmanship. “File a class action suit!” is a refrain we often hear from disgruntled RVtravel.com readers.

While the verdict in the California GM case did make plenty of headlines, and could eventually result in the company having to cut some checks, what will it do for the “winners”? Maybe a warm, fuzzy feeling that in David v. Goliath, Goliath was shown up for the bully. The same might be said for the RV industry. If a really big judgment were to be ordered against an RV manufacturer, it could well cause the company some trouble when would-be-buyers hear the news. But if the settlement is a pittance, compared to the loss, it’s mighty cold comfort. And how long might you have to wait for a judgment? In the GM case, it’s been six years since the suit was filed. Some class actions suits have dragged on for decades.

Class action lawsuits are great for some things. If the amount you’re out is small, and not worth hiring an attorney, then that’s one thing. But when big bucks are on the line, think twice. With many states having lemon laws that could apply to faulty RVs, a lemon law case might offer a far-happier ending. And even in states where lemon laws aren’t favorable toward RV disputes, the federal Magnuson–Moss Warranty Act can work to the advantage of consumers who find warranty providers are trying to dodge their responsibilities.

Editor’s note

If you’re having unresolved issues with the RV industry, consult an attorney. Ron Burdge, an attorney with experience in RV lemon laws, may be able to help.

##RVT1074b

Comments are closed.