Judge Clears Way for GM Wrongful Death Lawsuit Reopening After Recall

A Georgia judge has ruled that a wrongful death lawsuit against General Motors can proceed, despite a settlement reached prior to the auto maker recalling millions of vehicles earlier this year due to dangerous ignition switch problems.

Cobb County State Court Judge Kathryn J. Tanksley denied a motion by GM to dismiss the lawsuit last week, reviving the claim and scheduling a trial date of April 2016, at which time a jury could return substantially higher damages after hearing evidence about how the auto maker ignored ignition switch problems in certain Chevy, Pontiac and Saturn vehicles that caused dozens of deaths and serious injuries.

The GM wrongful death lawsuit was filed by the family of Brooke Melton earlier this year, seeking to reopen a case that was originally filed in 2011. The complaint stems from a 2010 accident, in which Melton’s Chevy Cobalt suddenly shut off while she was driving, causing her to lose control of the car and collide with another vehicle.

The family attempted to reopen the case, offering to return the money received under the prior settlement, arguing that GM fraudulently concealed that they were aware of ignition switch problems for decades, yet decided to allow the defective and dangerous vehicles to remain on the road.

Melton’s Chevy Cobalt was included in an GM ignition switch recall issued earlier this year, which affected 2.56 million vehicles. The automaker acknowledged that the vehicles may be prone to suddenly shut off when heavy key chains are used or if the ignition is jarred, causing the vehicle to stall and preventing the airbags from deploying in a crash.

GM attorneys had argued that the Melton case should not be permitted to go forward, since the parties had previously reached an agreement to settle the lawsuit. However, Judge Tanksley said that the recently filed lawsuit differed significantly from the original claim, because it now includes fraud allegations against the company.

An internal report released by General Motors following the recalls and recent congressional investigations described a a “pattern of incompetence” among employees of the automaker, 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.

GM Ignition Switch Settlement Fund and Litigation

The decision came just days after the launch of a GM settlement fund, which was set up by the automaker for those injured or the families of those killed in any of the 2.56 million small vehicles that GM recalled earlier this year due to defective ignition switches, which may prevent the air bag from deploying in an accident.

Amid a re-examination of safety issues by the company, GM has actually recalled nearly 20 million vehicles this year due to ignition switch problems. However, it is only offering compensation on those injured or killed in accidents involving the first 2.56 million vehicles recalled. The company is continuing to fight claims brought on behalf of some victims injured in vehicles sold before GM’s 2009 bankruptcy reorganization, indicating that the “new GM” should not be liable for problems caused by the old company.

The deadline for filing settlement claims with the GM fund is December 31, 2014, with a cut off for accidents before December 31, 2014. At least 89 claims were filed after the first weekend that the settlement fund began taking claims.

A number of plaintiffs have pushed ahead with lawsuits against the company despite the creation of the fund, including claims by those who say they were economically damaged by the company’s actions, and those who were injured or lost loved ones in recalled vehicles not included in the compensation fund.

A growing number of GM recall lawsuits have been filed by those claiming economic damages from the faulty ignition switches.

In early June, the U.S. Judicial Panel on Multidistrict Litigation issued an order consolidating all economic lawsuits against GM under U.S. District Judge Jesse M. Furman in federal court in New York for pretrial proceedings. The next scheduled conference is set for August 11, at which time Furman may select attorneys for leadership roles in the litigation.

Last week, a product liability lawsuit was filed on behalf of families of 29 people who died in accidents linked to ignition switch defects, as well as for more than 600 people who were injured. All of the claims come from among the 17 million vehicles that GM has recalled for ignition switch problems, but for which it has refused to offer compensation.