GM and LG sued for consumer fraud in Chevy Bolt recall

A lawsuit against General Motors and its battery maker LG Energy Solution over the defective batteries connected to more than a dozen Chevrolet Bolts catching fire is heating up as GM and LG filed motions to dismiss.

The lawsuit accuses the automaker and several of LG's entities, including LG Michigan, of consumer fraud for failing to identify the defect and find a fix that would allow the car to be used as it was advertised when people bought it. 

Currently all 2017-22 model year Bolt EVs and EUVs — an SUV style — are under recall. There have been 18 suspected Bolt fires. GM has confirmed 13 of them.

“The evidence is overwhelming that there’s a severe battery defect in these cars that impaired their usefulness and our complaint alleges this is a very serious problem," said Powell Miller, managing partner at the Miller Law Firm in Rochester, which represents the plaintiffs. 

GM and LG declined to comment on the ongoing litigation. But both filed  recent motions to dismiss the suit.

GM argues that the suit should be tossed because it did not know about the battery defect prior to the sale or lease of the vehicles and it took immediate action to fix the problem, including working closely with the National Highway Traffic Safety Administration as soon as the problem was discovered.

'In excess of $5 million'

GM and LG said they found the cause of the battery defects earlier this fall.

The companies are now producing defect-free battery modules, essentially an enhanced battery pack, for each of the 142,000 recalled Bolts. GM started those repairs in mid-October. GM has said the new batteries, installed free of charge to owners, will include a new limited warranty of eight years or 100,000 miles.

LG said it will reimburse GM for $1.9 billion in costs and expenses associated with the Bolt recall because of manufacturing defects in battery modules that LG supplied. 

GM has rolled out software updates for 2017-22 model year Bolts. Once installed, the software will mitigate some of the use restrictions on the cars until owners can get the battery replacement modules installed to permanently fix the fire risk. Bolt owners must still get the battery module replacements, even after the software updates, GM spokesman Dan Flores said.

Miller said of the fix, “We certainly hope they do (fix the problem), but we’re skeptical. We’ll find out in discovery the status of any supposed fixes.” Discovery is the exchange of relevant information from both sides in a suit.

For those Bolt owners still waiting for new battery modules or the software update, GM has said that if they follow three steps, the cars should be safe:

• Keep the car charged no more than 90%.
• Avoid depleting the battery below a range of 70 miles.
• Do not park the car in a garage or charge it overnight.

Risk of fire

The amended lawsuit, filed in September in U.S. District Court for the Eastern District of Michigan on behalf of 30 plaintiffs, alleges the use restrictions hurt the vehicles' financial value and function, limiting range by up to 40%. The lawsuit is seeking class-action status.

"(GM and LG) imposed limitations on consumers’ use of their Bolts, those limitations dramatically reduced the value and usefulness of the Bolt, the resale value, restriction of driving range and when and where they can charge their vehicles — even where they can park them," Miller said.  "You can’t park them inside your house because of risk of fire."

The court's jurisdiction has a minimum of $5 million in financial compensation, but Miller said his clients seek financial compensation "well in excess of $5 million."

The lawsuit alleges that by concealing the seriousness and scope of the battery defect, then rolling out a series of recalls and software fixes that gave the impression that each would fix the problem, but did not, the companies made the cars less valuable and unable to be used the way they were intended when people bought them, Miller said.

In November 2020, GM first recalled some 68,600 of 2017-19 model year Bolts for potential fire risk. GM issued a software fix shortly thereafter, but in July, GM recalled the vehicles for the second time after two more Bolts caught fire without impact. 

In August, GM expanded that second recall to include 2019-22 model year vehicles "out of an abundance of caution," GM said at the time. 

There have been no serious injuries from any of the 13 confirmed fires, GM's Flores said.

During this time, GM gave Bolt owners the safety restrictions, even warning them at one point to park the cars 50 feet away from other cars so they won't be at risk if a spontaneous fire breaks out. With the software update, GM has since lifted that restriction.

"We are aware of a number of public garages that will not allow the cars to be parked in the garages," Miller said. "Obviously, that’s a sign that there’s something seriously wrong with these cars ... . It’s a severe restriction on the ordinary use of a car that shouldn’t’ be happening.”

Motions to dismiss

GM has offered no timeline for replacement of the batteries or compensation for the significant limitations it has placed on the car's usage, the lawsuit said, noting, "it is unclear whether Defendants’ purported 'fix' will even resolve the issues with the Class Vehicles."

Some Bolt owners have told the Free Press that GM bought their Bolt back for a satisfactory price. Others continue to express frustration at waiting for their dealer to get the defect-free modules to make the repair or for GM to agree to a buy-back.

GM spokeswoman Maria Raynal declined to comment on specific allegations in the lawsuit saying it is GM's standard practice to refrain from comment "at this stage of the process."

Similarly, Ashlee Shin with the LG Energy Solution in Seoul, South Korea, also declined to comment on the lawsuit saying it is "still an ongoing matter."

But both companies responded on Dec. 17 to the amended complaint asking the court to dismiss the lawsuit citing a lack of premeditated knowledge that the batteries were flawed and taking fast action to investigate and resolve the problem once they discovered it.

GM's filing said it responded quickly to recall the cars, provide safety guidance to owners and start working on a repair. 

"The recall process is working. But the plaintiffs are unsatisfied with that process and instead seek to pursue this lawsuit," the motion said. "GM did not know of the battery defect at the time the plaintiffs purchased or leased their vehicles, or at the time that GM made any challenged statement. This lack of knowledge is fatal to plaintiffs’ consumer protection and common-law fraud claims."

The automaker said it had no reason to suspect that the battery defect could manifest in the expanded recall population, noting that different model years used different batteries. 

GM's motion also said, "All but two plaintiffs do not plausibly allege that their vehicles are unmerchantable. Plaintiffs say that GM’s interim software remedy and guidance to limit the vehicles’ charging capacity until defective batteries are replaced has led to a 'roughly 40% reduction' — which will soon be 20% and ultimately removed — in driving range. But this temporary reduction falls within the normal reduction of a vehicle’s mileage range over time, as detailed in the Limited Warranty, and lets plaintiffs continue to use their vehicles consistent with average daily driving needs."

LG Michigan said in its motion to dismiss the suit that it is "devoid of any substantive allegations against LG Michigan." It supplied "no components for Bolts until mid-2018, meaning that for Model Years 2017 and 2018, Bolts did not contain any parts or components manufactured by LG Michigan."

Similarly, the motion to dismiss filed by LG Electronics USA says the plaintiffs have "no plausible basis" to allege that it, or any other defendant, had knowledge of the alleged battery defect until multiple product investigations were concluded and that was "well after any representation on which any plaintiff supposedly relied at the time of purchase."

Fight vigorously

Miller said his firm will fight those motions "vigorously and we will be filing our own motion to certify the class action early next year.”

At that time, the court will decide whether other Bolt owners can join the litigation. Those other owners would receive notice.

If it is not certified as a class action, then Bolt owners seeking litigation  would have to sue individually.

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Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.