Federal Judge Prevents Victims of General Motors' Faulty Ignition Switches From Receiving Billions In Compensation
A federal judge handed General Motors a multi-billion-dollar reprieve Wednesday, ruling that the company could not be sued in hundreds of death and injury claims related to the defective ignition switches that are estimated to have killed more than 80 people.
According to Judge Robert Gerber, GM’s government-overseen bankruptcy and reorganization in 2009 shields it from liability for actions the company had made previously, despite claims by the families of people injured or killed by the ignitions that GM had been misleading the court at that time about the ignition-switch woes in older, smaller cars.
Lawyers in more than 140 lawsuits had argued to Judge Gerber, who also handled the company’s bankruptcy, that GM’s misleading the court effectively meant their clients never got a chance to dispute the bankruptcy on those grounds, and now are left with no recourse.
One plaintiffs’ attorney told the Associated Press that the ruling kneecaps a potential $7 billion to $10 billion in liability judgments.
“Hundreds of victims and their families will go to bed tonight forever deprived of justice,” said Robert Hilliard, who represents multiple wrongful death and injury plaintiffs against GM.
“GM, bathing in billions, may now turn its back on the dead and injured, worry free,” he said.
“The New GM,” which emerged from bankruptcy protection in July 2009, contended that it had acquired “old GM” assets “free and clear” of liabilities before the bankruptcy.
Judge Gerber wrote in his 138-page opinion that while dozens of people at GM knew about the ignition-switch problem and chose to conceal it from the public and not issue a recall as the judge said the law required, there was no such misconduct by GM’s bankruptcy attorneys.
“New GM” is still liable for crashes that took place after July 2009.
It was not immediately clear how the accident, fatality and injury numbers broke down, pre-bankruptcy and post-bankruptcy, but CNN reported that most of the vehicles with the faulty switches — which can slip out of the run position and cause sudden stalling — were built by “Old GM.”
“Judge Gerber properly concluded that claims based on Old GM’s conduct are barred,” the automaker said in a statement.
However, Judge Gerber ruled that “new GM” could still be sued by other plaintiffs claiming the ignition woes hurt the value of their cars, though he reiterated that “new GM” is only responsible actions taken after July 2009.