GM Settles Pennsylvania class action relating to inflated MSRP

General Motors

The class action alleged that GM added 1% of the Manufacturer’s Suggested Retail Price (“MSRP”) to the invoice for certain new vehicles it sold to its dealers, as part of their “Marketing Initiative” programs. The lawsuit claims that GM required dealers to use the 1% amount for advertising, and that this violated Pennsylvania law. The lawsuit also claims that dealers passed this amount on to consumers when they purchased vehicles. GM denies any wrongdoing, and states that the 1% was a legal, wholesale price increase to its dealers, and that dealers did not necessarily pass on the 1% amount to each purchaser.

The class consists of those who bought a new vehicle at retail in Pennsylvania from a franchised dealer that was made or distributed by GM. The GM dealer must have purchased the new vehicle on or before March 31, 1999, but after (a) September 1, 1998 for Chevrolet or GMC Truck vehicles; (b) July 1, 1989 for Cadillac or Oldsmobile vehicles; (c) July 1, 1990 for Pontiac vehicles; and (d) August 1, 1990 for Buick vehicles. The Class does not include anyone who purchased vehicles under the GM Employee Purchase Plans, GM qualified fleet purchasers, government entities, attorneys of record in this case, lessees, or anyone who previously requested exclusion from the Class.

The settlement provides rebates certificates worth up to $200 toward the purchase or lease of a new GM vehicle. Certificates will be valid for three years after the settlement receives final court approval. Up to two certificates can be used toward the purchase of one vehicle.

Notices informing Class Members about their legal rights are scheduled to appear in Pennsylvania newspapers and magazines leading up to a hearing on April 28, 2009, when the Court will decide whether to grant final approval to the settlement.

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