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GM will pay civil penalties of $13.9 million to Orange County, California, for deception and fraud.

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General Motors Loses Another $13.9 Million in Court
GM will pay civil penalties of $13.9 million to Orange County, California, for deception and fraud.

— General Motors will pay another $13.9 million as punishment for advertising and selling cars with defective ignition switches, airbags, power steering and braking systems.

Orange County, California, District Attorney Tony Rackauckas sued GM in 2014 alleging the automaker put the public in danger by using greed and deception.

The Orange County settlement is separate from the $120 million settlement GM recently reached with 49 states and the District of Columbia. That settlement saw the California attorney general win $7 million for the state.

Rackauckas accused GM of intentionally concealing known safety defects to avoid the cost of recalling and replacing faulty parts, and intentionally engaging in unfair business practices to gain advantages over its competitors.

The Orange County lawsuit accuses the automaker of injuring and killing consumers all in the name of cost-cutting over safety, fooling the public with deceptive advertising that the vehicles were safe to drive.

Part of the lawsuit references the business culture at General Motors that taught employees and engineers to never use certain words, such as "stall," "safety" and "defect." GM's rules for words not to be used left it practically impossible for personnel to suggest a car had defects, exactly the kind of defects that caused at least 124 deaths and 275 injuries.

In addition to the injuries and deaths, GM's failures resulted in a tremendous amount of property damage, increased insurance rates for owners and a loss of vehicle values.

The lawsuit also references transportation laws that make it clear a manufacturer must immediately disclose safety defects to regulators, something GM took about 10 years to accomplish.

Civil penalties gained from the GM lawsuit will be used for the enforcement of California consumer protection laws and economic crimes. A portion of the settlement is also allocated to the Orange County Gang Reduction Intervention Partnership.


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