An alleged hidden engine defect that resulted in excessive oil consumption and engine malfunction in 5.3-liter General Motor (GM) SUVs and light trucks has led to a $102.6 million verdict against GM.
Owners and lessees of GM trucks and SUVs acquired between 2011 and 2014 in California, North Carolina, and Idaho sued GM in late 2016 in the U.S. District Court for the Northern District of California alleging that excess oil infiltrated parts of the engine where it didn’t belong, according to a press release.
“I do expect that the GM jury award will set a precedent for the other litigation GM is currently tackling,” said Nicole Clark, CEO of legal analytics firm Trellis Law. “What’s interesting about this case is the fact that the lawsuits surrounding the defective engines are based on violations of individual state consumer protection laws, which is why we are seeing the same kind of lawsuit against GM pop-up across the country.”
A separate class action lawsuit was filed in Georgia and another federal trial is taking place in New York, while lawsuits in Ohio, Virginia, and Washington were dismissed.
“There’s no doubt that the outcomes of each of these cases will play a significant role in the settlement process in Georgia and New York, with the recent jury award raising the stakes for all the players involved,” Clark said.
Exceptionally large jury awards exceeding $10 million, known as "nuclear verdicts," are on the rise, according to the New York Civil Justice Institute's Nuisance Nuclear Verdicts, which found that California leads the nation followed by Florida and New York in high dollar verdicts handed down between 2018 and 2019.
“This is a lot for GM to litigate,” Clark said. “We can expect litigants to compare the $102.6 million jury award from the Northern District of California with the $40 to $45 million settlement GM reached with consumers over a faulty 2.4-liter Ecotec engine in 2019.”
The jury found that GM violated the breach of implied warranty of merchantability to California plaintiffs, the breach of implied warranty of merchantability to North Carolina vehicle owners, and breached the provisions of the Idaho Consumer Protection Act.
"While the $102.6 million awarded sounds big, business analysts claim the figure pales in comparison to the profits GM made from the sale of its 5.3-liter V8 vehicles during the affected years," Clark said.
As previously reported, General Motors' annual gross profit was $13.6 billion in 2020.
The jury awarded each of the 38,000 class members $2,700.
According to Autoweek, GM plans to appeal the outcome based on the dismissals in Ohio, Virginia, and Washington if post-trial relief is denied.