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Berman v. General Motors

In this class action against General Motors (GM), the plaintiffs allege that model year 2010–2013 Chevrolet Equinox and GMC Terrain vehicles equipped with 2.4-liter Ecotec engines have defective piston rings that are prone to premature wear resulting in excessive engine oil consumption. As a result of the defect, some owners drove their vehicles without sufficient oil, causing damage to various engine components. Before the lawsuit was filed, GM recognized the problem and issued Special Coverage Adjustments (SCAs) for the 2010–2012 model years to extend the time and mileage limitations of the original warranties to cover piston assembly replacements for vehicles diagnosed with excessive oil consumption. GM also provided notice to then-current owners that they could request reimbursement of out-of-pocket costs if they had paid for a piston assembly replacement prior to issuance of the SCAs. GM made a production change during 2013 that cured the defect.

The parties agreed to settle the claims of the class in exchange for an additional 120-day period for class members to request reimbursement if they already paid for repairs covered by an SCA and failed to request reimbursement before the original deadlines, or incurred rental car expenses while the repairs were being made. The proposed settlement also required GM to issue a similar SCA to cover model year 2013 vehicles manufactured before the production change.

On behalf of several members of the class, we filed objections to final approval of the settlement on behalf of three class members who receive nothing of value from the settlement. We explained that the settlement provides nothing for class members with 2010–2012 model year vehicles who are outside the time and mileage limits of the SCAs and do not have unreimbursed expenses for repairs covered by the SCAs, and we questioned whether GM would have, even absent the settlement, issued an SCA for model year 2013. We also noted that, to the extent the 2013 SCA is a benefit of the settlement, the settlement does not treat class members equitably because class members with 2013 vehicles receive greater benefit than those with the earlier model years. We also explained that, regardless of model year, the settlement is unfair because the SCAs, by their terms, limit the free repairs and reimbursements to piston assembly replacements and do not cover damages to other engine components resulting from the oil consumption defect, some of which required engine replacements costing several thousand dollars.

In response to our objections, the settling parties revealed that reopening the claims period for class members to seek reimbursement for the cost of repairs covered by the SCAs was expected to provide value to class members who were not owners at the time the SCAs were issued and did not receive notice of the earlier claims period. The settling parties also asserted that GM would not issue the 2013 SCA independent of the settlement, and that the benefits of the 2013 SCA would be limited to class members. Most significantly, the settling parties agreed to expand the scope of repairs covered by the reimbursement provision to extend beyond the cost of the piston assembly replacements described in the SCAs to cover the cost of any and all repairs for damage caused by the oil consumption defect, including the cost of engine replacement. To notify the class that reimbursements are not limited to the repairs covered explicitly by the SCAs, the settling parties agreed to change the notices and claim forms to be sent to class members following final approval of the settlement, and to provide an opportunity for those who opted out to rejoin the class to seek the enhanced reimbursement benefit.

On November 18, 2019, the district court granted final approval of the settlement in light of the parties’ clarification that class members are eligible for reimbursement for the cost of any and all repairs made as a result of the oil consumption defect, including engine replacement, so long as such repairs were made within the applicable time and mileage limitations. With this clarification, the scope of repairs for which reimbursement is available has been expanded far beyond what was covered by the original SCAs, substantially increasing the value of the settlement.