A Michigan federal judge on Thursday indicated he would give the initial approval to a $50 million settlement to end class claims that General Motors LLC sold trucks with faulty fuel pumps, clearing the way for GM to drop a Sixth Circuit appeal.

General Motors $50M Faulty Fuel Pump Deal Gets OK : Judge's Approval and Settlement Terms

U.S. District Judge Terrence G. Berg said during a remote hearing Thursday that the class settlement with GM seemed to provide a fair amount of payment to drivers who claim they either overpaid for their allegedly defective vehicles or had to pay out of pocket for repairs.

"Just reviewing the substance of this agreement, it does appear to me that it is fair," Judge Berg said. "I don't have any problem in deciding I think it's appropriate to send this out."

Preliminary approval for the deal, reached through a six-month negotiation process, also likely staves off GM's Sixth Circuit appeal to undo the certification of seven state classes of drivers. GM agreed to withdraw its appeal once the judge gave his initial support.

Background of the Case

The case involves customers who purchased certain-year GMC and Chevrolet diesel trucks outfitted with 6.6L V8 Duramax LML engines or LGH engines equipped with a CP4 fuel injection pump from GM-authorized dealerships in California, Florida, Illinois, Iowa, New York, Pennsylvania, and Texas, the seven state subclasses certified in 2023.

Under the settlement, GM would pay $50 million to compensate truck owners who paid out of pocket for repairs to their engines due to the alleged defect and former owners who allegedly overpaid for their vehicles. Drivers who had to pay for repairs may see between $6,300 and $12,700, depending on the number of claimants, according to Thursday's hearing.

Judge's Remarks on Settlement

Judge Berg noted the potential check amount is "pretty good" for drivers, whom experts estimated paid roughly $9,500 on average for out-of-pocket repairs.

"I did also want to say that I think that this settlement seems to me to be particularly fair in the sense that often, in these class actions, by the time the dust settles, the amount of individual payment to plaintiffs who may have been damaged is often considerably below the possible damages that they might have had for many reasons," Judge Berg said.

GM also agreed to provide a 12-month future limited warranty that covers 50% of the cost of repair or replacement if a fuel pump on a class member's car fails during the warranty period, which begins after final approval of the settlement.

Named Plaintiffs and Attorney Fees

Under the agreement, named plaintiffs would receive a $5,000 service award to be paid by GM outside the $50 million class pot. Attorney fees have not yet been requested.

An attorney for the class, Steve Berman of Hagens Berman Sobol Shapiro LLP, told Judge Berg on Thursday the settlement is "fair and excellent for the class," calling it a "very valuable settlement."

General Motors $50M Faulty Fuel Pump Deal Gets OK : Allegations and Response

The drivers argued in their complaint that GM knowingly sold trucks with a defective fuel pump that can cause sudden power loss due to a buildup of small metal shavings in the fuel system.

Representatives for the parties did not immediately respond to requests for comment Thursday.

The class is represented by Hagens Berman Sobol Shapiro LLP, The Miller Law Firm PC, and Hilliard Law.

General Motors is represented by April N. Ross and Rachel P. Raphael of Morgan Lewis & Bockius LLP.