After Supreme Court denies request, Arkansas class action against GM continues

Michelle Massey, East Texas Bureau Feb. 11, 2009, 11:24am

TEXARKANA, Ark. � The U.S. Supreme Court denied a request by General Motors to review a class action pending against the auto maker in the Miller County Circuit Court of Arkansas. The decision denying the petition for writ of certoriatia was released Jan. 12.

The class action accuses GM of selling four million pickup trucks and sport utility vehicles with defectively designed parking brakes.

Named class representative, Boyd Bryant, argues that General Motors knew of the parking brake defect in 2000 but, in an effort to avoid paying millions of dollars in warranty claims, alleges GM did not release the information until 2003.

The Arkansas class action will include "owners or subsequent owners of 1999-2002 1500 series pickups and utilities originally equipped with an automatic transmission and a PBR 210 x 30 Drum-in-Hat parking brake system utilizing a high-force spring clip retainer that registered his vehicle in any state in the United States."

Shortly following the January decision by the U.S. Supreme Court, the plaintiff received a stay of the Arkansas Supreme Court's mandate which allows the case to proceed toward trial.

However, shortly before the case was allowed to continue, the plaintiff filed for sanctions alleging General Motors' conduct with regard to ongoing proceedings in California was "deceitful."

A similar litigation pending in a California County Court, Hunter vs. GM, was recently brought to the attention of Miller County Judge Jim Hudson.

In addition to the allegations asserted by the Arkansas case, the California litigation involves a parking brake system found in heavy duty trucks and a broader range of GM vehicles with potentially faulty parking brake systems. Although the case is four years old, the proposed nationwide class has not been certified by the California Court.

Responding to the request for sanctions, GM argues the plaintiff failed to state sanctionable conduct, by not detailing a single statement made by GM regarding the Hunter litigation. Further, GM states it favors coordination of the Arkansas and California cases.

At a hearing discussing class communication held on Feb. 6, Judge Hudson granted a request to give California GM owners notice of the pending class action. The notice will provide for the potential class members to choose whether to proceed in the Arkansas or the California class action.

The Arkansas lawsuit argues General Motors is liable for breach of express warranty, breach of implied warranty of merchantability, violation of the Magnuson-Moss Warranty Act, unjust enrichment, fraudulent concealment and failure to disclose.

The parties are ordered to negotiate with mediator John Mercy until resolution or trial.

General Motors continues to deny the plaintiff's allegations. Further, General Motors argues that all laws of the 51 jurisdictions will apply at a class wide trial.

With dramatic decline in sales, General Motors is restructuring and reducing its workforce to retain billions of dollars in government loans.

In early February, General Motors announced it would cut 10,000 salaried jobs worldwide with 3,400 of those U.S. jobs. Those who remain could receive up to a 10 percent pay cut. Three months ago, General Motors cut 5,100 salaried jobs.

The company is also offering early retirement and buyout packages to all its unionized workers. The United Auto Workers said eligible workers are being offered $20,000 in cash and a $25,000 voucher to buy a car.

The auto maker plans to eliminate 31,500 hourly and salaried employees.

Case No CV-2005-51-2

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