Appeals court shoots down lawsuit that alleges GM is deceptive about its destination fee.

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GM Destination Charge Class Action Lawsuit is Over
Appeals court shoots down lawsuit that alleges GM is deceptive about its destination fee.

— A General Motors destination charge class action lawsuit is over after the plaintiffs failed to convince an appeals court to reinstate their claims against GM.

According to the destination charge lawsuit, customers are ripped off when buying a new GM vehicle because the automaker includes a destination charge as a fee to deliver new vehicles to dealerships.

Every destination charge is included on the Monroney label, or window sticker, found on a new vehicle. The class action alleges customers would be shocked to learn GM makes a profit from the destination fee.

One owner who filed the GM destination charge class action lawsuit asserts he was charged a $1,195 destination fee when he purchased a new 2021 Chevrolet Equinox. The other owner who sued says he was hit with a $995 destination charge when he bought his 2019 Cadillac Escalade.

Both plaintiffs contend they didn't know GM made a profit from the destination charge, a practice that was and still is allegedly deceptive.

GM Destination Charge Lawsuit Dismissed

The district court where the class action was filed dismissed the entire lawsuit by ruling there was nothing deceptive about GM's destination charge.

Judge William Q. Hayes found "reasonable or average consumers would not be surprised to learn that the price of goods often includes profit for the seller. The term 'Destination Charge' does not reasonably imply an absence of profit."

The judge also ruled GM had fully disclosed the existence and amount of the destination charges and the total sticker prices of the GM vehicles.

In other words, the plaintiffs received the GM vehicles they were promised at the prices they agreed upon.

And according to the judge, GM’s conduct cannot be considered “unjust” because the class action lawsuit fails to adequately allege facts to support an inference that GM’s conduct is deceptive.

According to Judge Hayes, allegedly leaving out additional information about the destination charge is not material.

GM Destination Charge Lawsuit Dismissal Appealed

The two plaintiffs who filed the class action lawsuit were granted an appeal to the U.S. Court of Appeals for the Ninth Circuit which ruled the dismissal was appropriate.

The appeals court found the plaintiffs did not plausibly allege deception by GM.

The GM destination charge is a fee charged to a dealer and paid by dealers to General Motors. This is regardless of the plaintiff's "speculative reasoning" concerning what is responsible for the makeup of such fees, said the Ninth Circuit.

"There is no allegation that GM charged the dealers a lesser amount than is represented to consumers, enabling the dealer to earn a secret profit from consumers. We hold that a reasonable or average consumer would not be deceived by the destination charge underlying each of Plaintiffs’ claims. Because there is no deception, the complaint fails to state a plausible claim for relief." — U.S. Court of Appeals for the Ninth Circuit

The GM destination charge class action lawsuit was filed in the U.S. District Court for the Southern District of California: Romoff, et al., v. General Motors LLC.

The plaintiffs are represented by Kaliel Gold PLLC, and Kopelowitz Ostrow Ferguson Weiselberg Gilbert.


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