Judge OKs Sale of Rebates in GM Settlement
A state judge ruled Friday that GM truck owners may sell the $1,000 rebate certificates they received as part of a settlement of a class-action suit with the world’s biggest auto maker. General Motors Corp. said it will appeal.
State District Judge Jack Marionneaux ruled in a case involving the owners of 5.8 million trucks with so-called sidesaddle gasoline tanks.
The truck owners got the certificates as part of a settlement that ended a lawsuit claiming that certain GM trucks built between 1973 and 1991 with gasoline tanks outside the frames were dangerous.
GM settled the case but contends that the trucks were not dangerous, saying the National Highway Traffic Safety Administration investigated but never issued a recall.
The certificates can be used toward the purchase of another GM vehicle, and Houston-based Certificate Redemption Group has offered to buy the certificates for $100 each.
GM challenged the sale of the certificates to a third party.
Marionneaux said Friday that most of the people who will receive certificates cannot afford or do not want a new vehicle and would make money from the certificates only by selling them.
“I think General Motors is trying to frustrate the settlement because they don’t want to pay a lot of money,” Marionneaux said. “I’m not going to be a part of that.”
GM attorney David Radlauer said the settlement allows only one transfer of each certificate for 15 months. Selling the certificate to a broker, who in turn would sell that to a GM dealer for a profit, would count as more than one transfer and violate the settlement agreement, he said.
After 15 months, the value of the certificate drops to $500, but it then could be sold to a middleman broker, Radlauer said.
GM spokesman Jay Cooney said GM plans to appeal Marionneaux’s ruling to the Louisiana 1st Circuit Court of Appeal.
Mike Crow, one of the attorneys for the plaintiffs, said the settlement allows the truck owners to sell their certificates.
Crow said GM brought the case back to court because it was unhappy that attorneys provided information and a means for people to sell their certificates, thereby making it easier for people to actually use the certificates.
“They thought we were going to take our money, go home and abandon the class members,” said Don Barrett, another attorney for the plaintiffs.
The attorneys who filed the class-action lawsuits sent out a letter to certificate recipients telling them that Certificate Redemption would buy the certificates and provide information on how to sell them.
Barrett said that by Thursday morning, more than 271,000 people had called for more information to sell their certificates to the company.
The appeals court ruled in GM’s favor last year, forcing the plaintiffs’ attorneys to remove from the settlement package a letter telling pickup owners that Certificate Redemption would buy their certificates.
The attorneys sent out the letters separately to each truck owner, prompting GM’s latest complaints.
General Motors shares fell 35 cents to close at $55.05 on the New York Stock Exchange.
