GM Wins Motion for Reconsideration, Securing Full Dismissal of Securities Class Action

Paul, Weiss secured a significant victory for General Motors Company and certain GM officers when the Eastern District of Michigan granted our motion for reconsideration and dismissed all remaining claims against the GM defendants in a securities class action over alleged misstatements and other conduct related to the autonomous vehicle (AV) technology of GM’s subsidiary Cruise LLC.

The shareholder plaintiffs allege that GM, Cruise and certain of their executives touted the capabilities and safety of Cruise’s AV technology, but that this technology was neither as advanced nor as safe as claimed. They also allege that the defendants engaged in fraudulent conduct by downplaying the role of a Cruise AV in a collision involving a pedestrian in October 2023. They claim that the alleged misconduct was revealed through a series of corrective disclosures, culminating in Cruise’s announcement that it was recalling its entire fleet of 950 AVs across the country.

At the motion to dismiss stage, U.S. District Judge Shalina Kumar agreed with our arguments that the plaintiffs had failed to show that numerous statements made by the GM defendants were false, that they knowingly intended to defraud shareholders, or that they were liable as “control persons” for Cruise. However, the court declined to dismiss claims based on certain so-called “commercialization statements,” which conveyed that Cruise’s AV technology had advanced to the point that the company could operate a revenue-generating robotaxi business—statements that were not made by the GM defendants.

In our motion for reconsideration, we argued that the plaintiffs had waived any claims based on the commercialization statements because they conceded at oral argument they were only asserting claims against each defendant for that defendant’s own statements.

Judge Kumar agreed, concluding that the court had erred in allowing the commercialization statement claims to proceed against the GM defendants. She dismissed the remaining Section 10(b) and Section 20(a) claims against all GM defendants accordingly.

The Paul, Weiss team includes litigation partners Daniel Kramer, Andrew Ehrlich, Richard Tarlowe and Kristina Bunting.