Judge Holds Off on Approving Chevy Equinox, GMC Terrain Class Action Settlement, Requests ‘More Robust’ Proposal [UPDATE]

Following a three-hour hearing on October 4, U.S. District Judge Robin L. Rosenberg has decided to hold off on granting final approval to the $40-$45 million settlement proposed to end class action litigation over an apparent oil consumption defect in 2010-2013 Chevy Equinox and GMC Terrain SUVs equipped with 2.4-Liter Ecotec engines.

At the hearing in West Palm Beach, three objectors amplified class members’ concerns over whether General Motors would reimburse drivers for engine replacements if they could show that total replacement was necessary due to excessive oil consumption caused by defectively designed piston rings. Counsel for the objectors highlighted total engine replacements as an example of damages that the extension of GM’s special coverage adjustments (SCAs), a major piece of the proposed settlement, would supposedly not cover.

After considering the objectors’ remarks, Judge Rosenberg reportedly asked parties for both sides to present a “more robust” settlement order that stated explicitly whether the agreement covered pricey engine replacements linked to defectively designed piston rings. Counsel for the plaintiffs and General Motors represented at the hearing that the settlement agreement was intended to include repairs that might lead to engine replacement. Judge Rosenberg noted, however, that it would be up to the attorneys to “decide how [to] present that.”

The objectors further argued to Judge Rosenberg that the request for a more explicitly worded settlement proposal called for providing roughly 1,700 consumers who opted out of the settlement a chance to come back into the fold, an issue that was agreeable to counsel for both the plaintiffs and General Motors.

“As plaintiffs, I want as many people covered under this as possible,” class counsel Greg Coleman said at the hearing.

Speaking to counsel on both sides, Judge Rosenberg asked whether General Motors would have the final word in deciding which class member claims are valid. Coleman said that his team would continue to advocate for class members, and GM’s attorneys told Judge Rosenberg that class counsel would be made aware of any claims rejected by the automaker.

The settlement announced back in April 2019 aimed to resolve three lawsuits filed respectively in Florida, California and Illinois. According to the motion for preliminary approval of the deal, General Motors agreed to extend special coverage adjustments (SCAs), outlined in service bulletins 14159, 15285 and 16118, through which it would pay for all or part of the cost of specified covered repairs for affected 2010, 2011 and 2012 Equinox and Terrain vehicles, even those past their GM-issued warranty dates. The settlement also expanded GM’s SCAs to include a reported 270,000 2013 models made before a mid-year design shift.

Law360 reports that the settlement seeks to cover 1.6 million current and former Chevy Equinox and GMC Terrain owners and 850,000 lessees. Judge Rosenberg said 1,709 consumers out of the approximately 1.5 million who were reached through the settlement program opted out of the class, and 70 individuals submitted objections to the settlement.

What’s next?

At this stage, all class members can do is wait for the parties handling the settlement to submit a renewed proposal to Judge Rosenberg. Counsel for the class members have an October 25, 2019 deadline by which to file a revised settlement proposal "consistent with the parties' agreement at the hearing." Additionally, Judge Rosenberg instructed the parties to include in the new settlement proposal a revised notice form to all existing class members and those who previously opted out of the settlement.

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