Lawsuit Over GM Wrongful Death Settlement Remanded Back to State Court

A federal judge has remanded a wrongful death lawsuit against General Motors (GM) back to Georgia state court, in which the family of a woman killed in a Chevy Cobalt is attempting to invalidate a prior settlement agreement reached with the automaker. The family claims that evidence was withheld about ignition switch problems that have been linked to a large number of similar crashes.

The complaint (PDF) was filed by the family of Brooke Melton, which originally brought a case against General Motors in 2011, following a 2010 crash in which Melton’s Chevy Cobalt suddenly shut off while she was driving. As a result, Melton lost control off the vehicle and crossed the center line, colliding with another vehicle.

According to allegations raised in the complaint, ignition switch problems caused the vehicle to turn off, also preventing the Chevy Cobalt airbags from deploying. Melton suffered a catastrophic brain injury in the accident, which ultimately led to her death at age 29.

While the family previously reached a wrongful death settlement with GM for $5 million, it is now attempting to rescind that agreement and return the money they previously received. The lawsuit now seeks to reinstate the prior claims, indicating that the automaker fraudulently concealed that they were aware of the ignition switch problems for decades, yet decided to allow the defective and dangerous vehicles to remain on the road.

The rescission claim was filed in Georgia state court in April 2014, but was removed to the federal court system by General Motors in June.

According to an order (PDF) issued late last week by U.S. District Judge Thomas Thrash, Jr., the case should have remained in state court, and has been remanded for further proceedings on the issue of whether there are adequate grounds to reverse the GM wrongful death settlement and reopen the case.

General Motors Ignition Switch Problems Known for Years

So far this year, General Motors has recalled millions of vehicles due to ignition switch problems, which could cause the vehicles to suddenly shut off if heavy key chains are used or if the ignition is jarred. If this occurs, it can not only cause the driver to lose control of the vehicle, but may prevent airbags from deploying in the event of a crash.

General Motors has admitted through congressional and regulatory investigations that it knew about the ignition switch problems for more than a decade. An internal report conducted earlier this year described a a “pattern of incompetence” among employees of GM, where many people knew the vehicles should be recalled but did nothing.

Melton’s family maintains that there is clear evidence that GM lied and withheld relevant information in their case, which would have materially affected the nature of that settlement.

The family is looking specifically at the testimony of Ray DeGiorgio, the engineer who designed the switch used in the Melton’s Chevy Cobalt. Before the case was settled and before this year’s recalls, DeGiorgio testified under oath in the Melton case that he made no changes to the ignition switches after they went into production. However, documents provided to congress this year by Delphi Automotive, a parts manufacturer, showed that DeGiorgio signed off approval of changes to the switch in 2006, in an attempt to correct the problems that may result in vehicles suddenly shutting off.

GM did not provide those documents during the earlier Melton case, which the family’s attorneys say shows that DeGiorgio lied under oath and that GM covered up the ignition switch problem at the time.

Other reports have indicated that GM gave the improved ignition switch the same part number as the defective one, knowing that would allow it to slip under the radar of federal regulators.

The return of the case to Georgia state court may prove very beneficial for the family, providing a more friendly venue where juries may be more inclined to hand down larger punitive damage awards. In addition, with the onslaught of federal lawsuits over the GM recall, returning the case to Georgia state court may allow the family’s attorneys to speed up the process of conducting additional discovery and depositions.

Specifically, attorneys for the family have indicated that they want to depose current GM CEO Mary Barra, Corporate Counsel Michael Milliken, who has taken heavy fire from some members of Congress this week for his role in the recalls, and 15 former GM employees who were fired as a result of the ignition switch scandal.

Since the company first announced the GM ignition switch recall in February, the company has recalled 29 million vehicles in all. While most are for various unrelated problems, more than 2.5 million are directly tied to the ignition switch issue affecting various small-sized Chevy, Pontiac and Saturn vehicles. In addition, nine million or more vehicles have been recalled for other ignition switch problems.

The automaker has acknowledged that at least 16 deaths and more than 60 accidents may be linked to the problem. However, federal investigators, consumer watchdog groups, and even some GM officials, indicate that the number is likely to climb as more information becomes known. Much of that information may come out in the discovery proceedings involving the GM litigation.

It is ultimately expected that thousands of personal injury, wrongful death and consumer class action lawsuits will be brought as a result of accidents caused by the defects and vehicle owners who have suffered economic harm caused by depreciation of their vehicle’s value due to the ignition switches.

General Motors has already agreed to provide compensation to injury victims in accidents where airbags failed to deploy, resulting in personal injury or death. A victim’s compensation fund has been established for cases for injuries and deaths among drivers or passengers in one of the recalled vehicles, as well as pedestrians and occupants of other vehicles involved in accidents with recalled GM cars.

GM will begin accepting applications for the settlement fund on August 1.