A federal jury in California has hit General Motors with a whopping verdict. The U.S. 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
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.
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Class-action lawsuits were designed by lawyers specifically for the benefit of lawyers. If you want justice, go to a house of ill-repute. If you want to get screwed, go to a courthouse. Both points are sage advice from a lawyer friend of mine.
It appears to me class action suits occur around a single individual event. The Rv industry, as a whole of many manufacturers seems to have numerous little, unrelated events – not one single thing common to many as in this GM case. I could see a possible link up with the downtime and the on-going payments, insurance etc – which represents a loss – but there again it would entail a common time period for everyone in the suit and against one co.. As Mary noted below their 5th wheel had no brakes – if several of those units had no brakes – new ballgame involving one co. and a “single event”!
IMO the lemon laws could be imposed on individual units and companies much easier as less costlier. Recovery of lost payments, etc would probably have to be individually litigated.
Yes!! RV Mfr’s need to grasp “Quality is JOB 1” It is only a matter of time b/4 they get a Class Action filed against them. Consumer’s are getting ticked!! BIG TIME!!
Just Sayin’
I believe only the attorneys get paid. My LG refrigerator went to heck( kind word). I joined the class and was to expect around $470. it’s been 4 or more years and nothing. Got a letter from attorney’s a couple years ago. What it said, don’t hold your breath. ( not verbatim)
People that have,had the same as mine can’t even get theirs fixed. Lg will not pay a service company to repair it. In a way, I’m one of the lucky ones. Mine was repaired with a new compressor. I paid for the labor.
and refrigerant. Best way to punish company is to remember how bad the product was, tell your friends and neighbors, talk about it in facebook etc and never buy that company again.
Where do we sign up? Our brand new 5th wheel had no brakes. We could have been killed.
That is really not “positive” information about the RV litigation option. Doesn’t surprise me. That is how they have managed to get by with all of their shenanigans.
For one of the “older” readers I was the proud owner of a 1972 Chevrolet Vega. You think maybe the management team moved to Elkhart? Unfortunately the “rule of law” is for those with deep pockets or a real gutzy attorney.
Years ago I received a $400 check from Mitsubishi by virtue of being the then current owner of a black Eclipse which had a paint deterioration issue that generated a class action suit. I did have to add another $400 or so to get the whole car repainted and that was a cheap job that didn’t involve disassembling the car. Still, if I hadn’t gotten that money and the lawyers hadn’t gotten theirs, I’d likely have sold the car at a loss greater than that $400 and just moved on. So you might not be made whole, but you might get something and that’s still better than nothing.
Brilliant reverse engineering on the 5.3 L Vortex V8 GM. My 2001 Suburban with that motor has gone 225,000 virtually trouble free miles and burns no oil.
Only lawyers get rich off class action lawsuits. Maybe you might get free oil changes for 10 years, if that.
I would respectfully agree and disagree at the same time. Attorneys have the knowledge to take things to their legal conclusion. Yup, they get paid a hefty percentage when things go their way. Would you go through the work to gather a class of folks, create the paperwork, file that paperwork in federal court or multiple states? If you did, how much would that work be worth to you? I was part of a class action against Mercedes for its emissions cheating. Our share of the take was more than $4,000. Would it have cost me more than that to file an individual suit that would have gone nowhere and would have paid nowhere near the amount we received, plus work to correct the issue paid for by Mercedes’? Here’s the answer: NO. MB would have shoved me into a corner and maybe several years later I’d get a letter. Why would I want to “get rich” off such an action anyway? All i wanted was to fix the issue and punish Mercedes’. A collective voice is heard much better than an individual’s in this case. And That’s what’s happened.
I would respectfully agree and disagree at the same time. Attorneys have the knowledge to take things to their legal conclusion. Yup, they get paid a hefty percentage when things go their way. Would you go through the work to gather a class of folks, create the paperwork, file that paperwork in federal court or multiple states? If you did, how much would that work be worth to you? I was part of a class action against Mercedes for its emissions cheating. Our share of the take was more than $4,000. Would it have cost me more than that to file an individual suit that would have gone nowhere and would have paid nowhere near the amount we received, plus work to correct the issue paid for by Mercedes’? Here’s the answer: YES. MB would have shoved me into a corner and maybe several years later I’d get a letter. Why would I want to “get rich” off such an action anyway? All i wanted was to fix the issue and punish Mercedes’. A collective voice is heard much better than an individual’s in this case. And That’s what’s happened.
My prediction? Either a lawsuit or regulation is going to force the RV industry to implement warranties with ‘reasonable repair time frames’, penalties for exceeding these time frames, and lemon laws.
The only real winners in a class action suit are the lawyers and those folks who filed the initial suit before it became a class action suit.
Please read my response above. Again, what’s constitutes “winning?” Is it getting the issue fixed with each person also getting compensated, or me alone getting 700 million and you getting nothing? Hlmmm
I hear you Bill, and you make valid points. However, I wonder how many class action suits result in any meaningful/real award to the class participants?
I’ve gotten numerous invitations to collect on these kinds of suits over the years and the lawyers are taking tens of millions while the participants are getting a year of credit monitoring or 25% off retail to buy a new version of the same piece of junk they had trouble with. So far, based on the ones I’ve personally been engaged with, the lawyers and the people specifically named as plaintiffs have been the only true beneficiaries.
Also, it’s my belief that individuals in the class should be required to opt in…not opt out! I didn’t start the action, so why the heck should I have to take my valuable time to opt out? If someone in the class feels it’s worth it, they can opt in. Those who don’t should NOT lose their rights by inaction/disinterest.
GM’s lawyers will keep this in the court system long enough that all the litigants will be gone before they see the first $. This applies to any large corporation, that’s why they have huge legal departments. That’s why if they offer a settlement you’re better off the settle. A piece of the pie is better than none.
$100 million seems like a huge amount to us, but compared to GM’s annual revenue and profits, it is peanuts. They can just write it off as a cost of doing business. If it was $10 billion or more, they might notice.
One mil, “peanuts”, really? Tell that at the next board meeting, better yet, to the share holders. GM trucks with regards to towing lag behind the F-150’s, RAM’s and Silverado’s. Peanuts, I think not.
GM trucks lag behind Silverados?
$100M/$127,000M = .000787 or 8/100ths of 1%…peanuts!
2021 annual revenue $127B