The Goldberg Law Firm Co., LPA

The Goldberg Law Firm Co., LPA

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Defective Ignition Switches

This week, General Motors received a windfall, being shielded from liability for the deaths and injuries caused by GM's defective ignition switches.  This decision extends to the damages GM caused to consumers for the lost resale value (due to the fact no one wants to purchase a defective used car) that cost Toyota $1.3 billion in its settlement stemming from the unintended acceleration recall case in 2012.  A federal court determined that the 2009 government-overseen bankruptcy and reorganization, which cost the tax-payers over $49.5 billion, shielded GM from liability for any claims for defective ignition switches that arose before the bailout even though at least a dozen GM executives knew about the faulty ignition switch.  GM concealed the problem from the public and the bankruptcy court.

As reported in the Washington Times, '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 ruling doesn't preclude courts holding GM liable for injuries occurring after 2009 for the defective ignition switches, but the decision could save GM billions of dollars.  Anyone seeking justice for the pre-2009 injuries, must file their claims against the "shell company of bad assets the automaker shed during the bankruptcy."  GM is additionally providing some compensation to the families of those it killed through an independent fund, although GM determines the amount of compensation.  A court action would have taken that compensation issue from GM and placed it in the hands of a jury.  At least 84 families of victims killed in accidents have received compensation through the fund.  As the New York Times further reported,

Steven Berman, who along with Mr. Hilliard is a co-lead counsel representing plaintiffs in nationwide litigation against G.M., said, “It cannot be the law that Old G.M. could hide the defects, and subsequently use the bankruptcy court as a shield. As Judge Gerber agreed, due process required that Old G.M. give notice to owners of cars with defects, and consumers did not get notice. The law must provide a remedy.

GM still faces an appeal, in which an appellate court can disagree with the federal judges white-washing GM's concealment of the defective ignition switches.  That likely will be an uphill battle for the plaintiff's affected by the most recent decision.