StabiliTrak lawsuit against GM thrown out of Court


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The Class Action Lawsuit, instituted against the General Motors LLC in January 2019, relating to the allegedly defective StabiliTrak system in their vehicles, was recently dismissed by a US District Court in Michigan. It comes as a relief for the carmaker, as had the Complaint of the Plaintiffs been allowed, the scale of compensation could have been enormous.

On 18th January 2019, the Plaintiffs Elaine Hall and others filed the lawsuit claiming that the StabiliTrak system in the 2010 to 2016 Chevrolet Impala and 2014 to 2016 Chevrolet Impala Limited vehicles, which they purchased, were defective. The StabiliTrak electronic, a control system for stability, is designed to help divers maintain the control of the car in situations where the car tends to lose directional stability. This system has been readily used by GM in most of its models and is still in use. The Plaintiffs claimed that the StabiliTrak System in their vehicles “contain[s] one or more design or manufacturing defects … that can cause the vehicle to pull to one side (particularly while turning), hesitate, jerk, brake/lock wheels, lose power or stall.” The Plaintiffs alleged that GM fraudulently concealed and failed to disclose this defect to the purchasers. By doing so, GM violated the consumer protection laws of various states, and that they have breached the vehicles’ implied warranties under state and federal law, as well as are guilty of unjust enrichment.

StabiliTrak Service Light
StabiliTrak Service Light

The General Motors, represented by Dykema Gossett Law Firm, moved an application for dismissal of the Plaintiff’s Complaint and argued the same on several grounds. The Judge of the US District Court at Michigan, Matthew F. Leitman, took note of the fact that to substantiate a claim of fraudulent omission as in this case, the Plaintiffs need to establish first that the manufacturer knew of such defect before the sale. In the instant suit, the Plaintiffs pleaded that the GM had pre-sale knowledge of the StabiliTrak defect through “pre-production testing”, “aggregate warranty data” and other production-based sources. Still, the judge observed that there was no such evidence to support these allegations of the Plaintiffs. The Plaintiffs also quoted two complaints filed with the NHTSA by consumers regarding the defective StabiliTrak system, as well as presented an expansive list of 596 consumer complaints filed against 2007 through 2016 model years of the Class Vehicles. However, the judge opined that “these complaints do not support a plausible inference of GM’s knowledge of the StabiliTrak defect”. The plaintiffs also filed three Technical Service Bulletins (TSBs) that GM issued relating to the StabiliTrak system. Still, the Court, after citing an array of authorities on that, concluded that neither that TSBs support a plausible inference about GM’s pre-sale knowledge of the defect.

StabiliTrak and Traction Control
StabiliTrak and Traction Control

The Court also negated the Plaintiffs’ other claim that GM has been unjustly enriched through the sale and lease of the class vehicles, by holding that since there is an express contract covering the subject matter, namely the express limited warranty that GM provided to the vehicles, the Court would not imply any other agreement for unjust enrichment claim.

Given these reasons, the US District Court, Eastern District of Michigan, Southern Division granted the General Motors’ application and dismissed the Plaintiffs’ Complaint with prejudice.

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