Consolidated Class Action Complaint Against New GM for Recalled
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Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 1 of 337 EXHIBIT A1 Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 2 of 337 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK IN RE: INDEX NO. 14-MD-2543 (JMF); 14-MC-2543 GENERAL MOTORS LLC IGNITION CONSOLIDATED CLASS ACTION SWITCH LITIGATION COMPLAINT AGAINST NEW GM FOR RECALLED VEHICLES MANUFACTURED This Document Relates to All Actions BY OLD GM AND PURCHASED BEFORE JULY 11, 2009 JURY TRIAL DEMANDED 1197532.12 Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 3 of 337 TABLE OF CONTENTS Page INTRODUCTION........................................................................................................................ 1 JURISDICTION AND VENUE .................................................................................................. 8 PARTIES ...................................................................................................................................... 9 I. Plaintiffs ................................................................................................................. 9 II. Defendant ............................................................................................................. 45 FACTUAL ALLEGATIONS .................................................................................................... 46 I. There Are Serious Safety Defects in Millions of Old GM Vehicles that New GM Has Continued to Conceal from Consumers. ....................................... 46 A. The Ignition Switch Defects .................................................................... 48 II. Old GM’s Fraudulent Conduct with Respect to the 2.19 Million Defective Vehicles Subject to the February/March Recall. ................................................. 49 A. Old GM Knew That There Were Failures With The Ignition Switch Design In 2001, And Concealed These Material Facts, Putting The Safety Of The Class At Serious Risk Of Harm. ................... 49 B. Old GM Approved Production Of Ignition Switches In 2002 Despite Knowing That They Had Failed In Pre-Production Testing And Did Not Meet Old GM’s Internal Design Specifications. ................ 51 C. Old GM Received Complaints And Reports On The Stalling Of Vehicles Due To The Defective Ignition Switch Turning Off And Causing Moving Stalls, And Concealed That Material Information From The Class. ....................................................................................... 51 D. Old GM Engineers Understood The Need To Correct The Ignition Switch Defect In 2004 But Failed To Act To Disclose Or Correct The Defect. ............................................................................................... 52 E. Old GM Closed Its First Internal Investigation With No Action Because Of Cost. ...................................................................................... 56 F. Complaints Continued And Serious Accidents Came To Old GM’s Attention In 2005, While NHTSA Began To Investigate Death Cases Involving Chevy Cobalts. .............................................................. 58 G. Old GM Engineers Proposed Design Modifications To The Ignition Switch In 2005 That Were Rejected By Old GM Management On The Basis Of Cost. ....................................................... 62 1197532.12 -i- Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 4 of 337 TABLE OF CONTENTS (continued) Page H. Rather Than Implementing A Safety Recall And Fixing The Known Defect, Old GM Sent An Inadequate Technical Service Bulletin To GM Dealers In Late 2005, Advising Dealers On Taking Heavy Items Off Key Rings. ....................................................... 66 I. Old GM Knew About And Authorized A Design Change To The Ignition Switch In 2006, But Masked The Existence Of The Change By Keeping The Part Number The Same. .................................. 68 J. The Fatalities Resulting From The Defects And Cover-Up Came To Old GM’s Attention As Early As 2004. ............................................. 70 K. Old GM Responded To Growing Evidence Of Fatalities By Updating The Technical Service Bulletin To Dealers About Heavy Key Chains. .............................................................................................. 72 L. Old GM Knew Of And Tracked Multiple Accidents Involving The Ignition Switch Defect By 2007 And Avoided Scrutiny By Misleading The Class, The Public, And Regulators. ............................... 73 M. Old GM Instructed Its Personnel On Judgment Words To Be Avoided. ................................................................................................... 76 N. By 2009, As Injuries And Deaths Continued To Mount, Old GM Opened Yet Another Internal Investigation, But Continued To Withhold Information From Its Customers And The Class About The Defects. ............................................................................................. 78 O. The Spreadsheet Of Accidents Involving The Cobalt Ignition Switch Within Old GM Continued To Grow, But Was Never Disclosed. ................................................................................................. 79 III. Meet The New GM, Same As The Old GM: With Knowledge of the Defects, New GM “Investigates” Further-And Continues To Conceal The Defects. ................................................................................................................ 80 IV. New GM Issues A Recall—Ten Years Too Late. ................................................ 91 V. New GM’s Recall Fails to Correct the Defect. .................................................... 93 VI. New GM Expands the February/March Recall—and Suspends Two Engineers.............................................................................................................. 95 VII. The June 2014 Recall For The “Ignition Key Slot” Defect Further Reveals New GM’s Fraudulent Concealment of Known Serious Safety Problems. ......... 96 -ii- 1197532.12 Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 5 of 337 TABLE OF CONTENTS (continued) Page VIII. The July 2 and 3, 2014 Recalls Relating to the Unintended Ignition Rotation Defect Further Reveal New GM’s Fraudulent Concealment of Known Serious Safety Problems. ...................................................................... 111 IX. The September 2014 Ignition Switch Defect Recall Is the Latest Evidence of the Extent of the Defects and New GM’s Ongoing Concealment. ................ 130 X. Even As They Concealed the Safety Defects From Consumers, Old and New GM Each Presented Their Vehicles As Safe And Reliable, and Presented Itself As An Honest Company With Integrity. .................................. 133 XI. New GM Promoted All Of Its Vehicles As Safe, Reliable, And High- Quality While It Fraudulently Concealed Numerous Safety Defects ................ 149 A. New GM Claimed To Be Turning Over A New Leaf After The Bankruptcy. ............................................................................................ 149 B. New GM’s Advertising And Literature Claimed That GM Placed Safety And Quality First. ....................................................................... 159 C. New GM Concealed And Disregarded Safety Issues As A Way Of Doing Business. ..................................................................................... 172 D. New GM Admitted Its Failure To Disclose The Defects In Its Vehicle, Attempting To Reassure The Public That It Can Now Be Trusted. .................................................................................................. 178 XII. Other Recently Revealed Information Demonstrates New GM’s Widespread Ongoing Pattern Of Concealing Dangerous Defects In GM- Branded Vehicles That Has Caused Diminution in the Value of the Defective Vehicles. ............................................................................................ 181 A. The Ignition Lock Cylinder Defect. ....................................................... 182 B. There Have Been Extensive Additional Recalls of GM-branded Vehicles With Additional Safety-Related and Other Defects. ............... 186 XIII. New GM’s Misrepresentations That It Made Safe And Reliable Cars, The Ignition Switch Defect, and Other Safety Defects Have Harmed Plaintiffs And The Classes. ............................................................................................... 229 TOLLING OF THE STATUTES OF LIMITATION .......................................................... 231 SUCCESSOR LIABILITY ALLEGATIONS ....................................................................... 235 CHOICE OF LAW ALLEGATIONS .................................................................................... 250 CLASS ACTION ALLEGATIONS ....................................................................................... 252 II. The Nationwide Class ........................................................................................ 252 -iii- 1197532.12 Case 1:14-md-02543-JMF Document 379-1 Filed 11/03/14 Page 6 of 337 TABLE OF CONTENTS (continued) Page III. The State Classes ............................................................................................... 253 REALLEGATION AND INCORPORATION BY REFERENCE ..................................... 259 CLAIMS FOR RELIEF .......................................................................................................... 259 I. NATIONWIDE CLASS CLAIMS .................................................................... 259 FIRST CLAIM FOR RELIEF ON BEHALF OF NATIONWIDE