Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Fla.: Consumers’ claims against GM over vehicle safety rating given green light, (Dec 15, 2014)

By Linda O’Brien, J.D., LL.M.

Two consumers sufficiently alleged deceptive trade practices claims against auto maker General Motors for allegedly misrepresenting the national safety rating for a certain vehicle, the federal district court in Fort Lauderdale, Florida, has ruled. Thus, the defendant’s motion to dismiss was denied (Carriuolo v. General Motors LLC, December 11, 2014, Cohn, J.).

Geri Siano Carriuolo and Peter Bracchi each purchased new 2014 Cadillac CTS sedans from third-party General Motors dealerships. Carriuolo bought her car in Florida, and Bracchi bought his car in Tennessee. General Motors (GM) shipped the cars with window stickers that relay information about the cars’ safety ratings awarded from the National Highway Traffic Safety Administration (NHTSA). Although the stickers indicated that the vehicles had received a five-star rating in three categories— frontal crash driver, frontal crash passenger, and rollover—the 2014 Cadillac CTS apparently had not received any safety rating from the NHTSA. Subsequently, the NHTSA awarded the vehicle a five-star overall safety rating.

Carriuolo and Bracchi brought claims against GM, alleging violations of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and the Tennessee Consumer Protection Act (TCPA). GM moved for dismissal.

To state claims under the FDUTPA and TCPA, a plaintiff must allege that the defendant’s act was likely to cause substantial injury to consumers, the court explained. The defendant’s argument that the plaintiffs alleged no facts to explain why the inaccuracy of the stickers was material to the plaintiffs or any other purchaser or lessee was rejected.

According to the court, the plaintiffs met their burden to plead the required material misrepresentations and substantial injury. The plaintiffs alleged that GM conspicuously advertised that its car had received safety ratings that in fact it did not. They were therefore damaged because the vehicles they purchased or leased did not contain the safety ratings that were represented, making them less valuable than the vehicles would have been had the representations been true.

It was reasonable that representations concerning the safety rating that a government agency assigned to a vehicle were material and overstating a vehicle’s safety rating substantially harms the vehicle’s purchaser. Federal law requires auto manufacturers to include the NHTSA rating on the stickers that it ships with its vehicles. Furthermore, GM was compelled to send the plaintiffs a letter with the correct information when the error was discovered, the court noted.

The case is No. 14-61429-CIV-COHN-SELTZER.

Attorneys: Donald R. Fountain, Jr. (Clark, Fountain, La Vista, Prather, Keen & Littky-Rubin, LLP) for Geri Siano Carriuolo and Peter Bracchi. David G. Radlauer (Jones Walker Waechter Poitevent Carrere & Denegre LLP) for General Motors LLC.

Companies: General Motors LLC

Cases: StateUnfairTradePractices FloridaNews