Court Ruling Signals Potential Expansion of Civil RICO Liability to Include Automotive Suppliers in Emissions Violations Cases

March 08, 2018

A U.S. federal district court, on February 20, 2018, declined to dismiss class plaintiffs’ civil RICO claim against GM and a major automotive supplier, where plaintiffs alleged that GM and the supplier conspired to defraud emissions regulators and consumers by installing defeat devices in GM’s diesel trucks and then marketing them as “clean diesel” vehicles.

While the court acknowledged that class plaintiffs sustain the ultimate burden in proving their claim, major automobile vehicle manufacturers, suppliers and original equipment manufacturers should be wary of potential civil RICO liability. Aside from the Volkswagen case, this is the first court to address a RICO claim, and thereby sets a potential precedent for other pending emissions violations class actions filed against major automobile manufacturers in the industry.

Further, as the ruling makes clear, suppliers may be liable for fraudulent claims involving emissions violations. So long as these suppliers both provided and manufactured components of an automobile engine enabling the use of a defeat device and worked in tandem with the automobile vehicle manufacturer in marketing such vehicles as “clean diesel,” they can face civil RICO liability.

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