General Motors Lawsuits Over Ignition Recall Centralized in Federal MDL

As a growing number of lawsuits continue to be filed against General Motors (GM) over economic losses caused by the recent ignition switch recall, a panel of federal judges has decided to centralize the litigation before one judge as part of an MDL, or Multidistrict Litigation.

Following oral arguments last month, the U.S. Judicial Panel on Multidistrict Litigation (JPML) issued a order (PDF) on Monday, which will result in the transfer of all General Motors lawsuits filed in U.S. District Courts throughout the country to the Southern District of New York, where the litigation will be overseen by U.S. District Judge Jesse M. Furman.

In complex litigation where a large number of similar cases are brought throughout the federal court system, centralization as part of an MDL is commonly ordered to reduce duplicative discovery, prevent conflicting pretrial rulings from different judges and to serve the convenience of the parties, witnesses and the courts.

At least fifteen different GM ignition switch lawsuits have already been filed, and the number of cases is expected to continue to grow. All of the claims involve allegations that a massive recall issued earlier this year for nearly 2.6 million Chevy, Saturn and Pontiac vehicles has caused depreciation in value and resulted in economic harm for owners and investors.

General Motors has faced substantial criticism over their handling of the ignition switch problems, which may cause the vehicles to suddenly shut off if heavy keys are used or if the ignition is jarred, such as may occur during a crash. If the vehicle suddenly shuts off, it may cause the driver to lose control or could result in the airbags no deploying when needed to prevent serious injury in an accident.

The automaker has acknowledged that at least 13 deaths and 47 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.

While only 15 cases are currently filed, the U.S. JPML said it was made aware that more than 40 more may be filed in the near future. These cases, however, do not include personal injury or wrongful death claims against the auto manufacturer; a number of which have already been filed.

GM has said that it will compensate victims or surviving family members of those injured or killed in accidents linked to the defective ignition switches. However, the company has vowed to fight the economic lawsuits, seeking immunity by arguing that cases filed over incidents that happened or cars that were sold before the company went through bankruptcy in 2009 should be dismissed because the current GM is legally a different company than pre-bankruptcy GM.

Last week, GM released an internal investigation report on the recalls, finding that while the company did not intentionally cover up the problem, some within the company knew about the issue since 2002 but did nothing, in what the report calls a “pattern of incompetence” as well as neglect and a sign of engineers not knowing how their own vehicles worked.

GM has already been fined $35 million by the NHTSA for irregularities in the recall.