GM Files Motion to Bar Ignition Recall Lawsuits for Pre-2009 Vehicles
Amid mounting criticism that General Motors placed their financial interests before the safety of consumers by failing to warn about known ignition problems that may have caused more than a dozen deaths, the automaker is now seeking to bar owners of vehicles sold before 2009 from pursuing lawsuits.
In a motion filed this week in federal bankruptcy court in Manhattan, General Motors (GM) is calling on U.S. Bankruptcy Judge Robert Gerber to protect the company from liabilities that occurred before its 2009 bankruptcy and reorganization, indicating that the new GM should not have to pay for the sins of the old GM.
If the request is approved, it could prevent many owners of the 2.6 million vehicles recalled over the past two months from pursuing lawsuits over the GM ignition switch problems, which could cause vehicles to suddenly shut off if heavy keychains are used or if the ignition is jolted, which may occur in an accident. This could cause airbags to fail to deploy, increasing the risk of serious or fatal injury in a crash.
GM has acknowledged that 13 deaths may have been caused by the ignition switch, but some critics suggest the number is likely much with. More than 300 deaths have been reported in recalled GM vehicles following accidents where airbags failed to deploy.
A growing number of GM recall lawsuits are being filed in state and federal courts throughout the United States, including personal injury claims, wrongful death claims, investor lawsuits and other class actions over the diminished value of the vehicles.
On May 29, the U.S. Judicial Panel on Multidistrict Litigation will hear arguments over whether those lawsuits should be consolidated under one judge for pretrial proceendings in the form of a GM ignition switch recall multidistrict litigation, or MDL.
GM has asked judges in New York and California to halt the litigation process, until the questions surrounding liability for pre-2009 vehicles can be resolved. At least one petition has already been filed in New York bankruptcy court seeking to block the maneuver, which is likely to draw even more criticism for the auto maker.
Judge Denies “Park It” Motion
GM won one victory last Thursday, when U.S. District Court Judge Nelva Gonzales Ramos rejected a request to order GM to tell owners they must take the affected cars off the road until they are fixed. Plaintiffs who filed the motion said the vehicles are a danger to their drivers and others, but the judge said she will defer to the judgment of the National Highway Traffic Safety Administration (NHTSA), which has not seen fit to take action to get the vehicles parked.
The company has said the vehicles are safe to drive, but safety advocates and consumer watchdog groups say there is no way that the vehicles can be considered safe until the ignition is repaired.
GM admits that it has known about the ignition problems since at least 2001, and the Center for Auto Safety revealed in a letter last week that GM chose not to use a better ignition switch for cars affected by the recall in order to save money.
The letter (PDF), sent to GM CEO Mary T. Barra, calls for more transparency over the controversy from the company. It points to the documents that were uncovered revealing the existence of an alternative, slightly more expensive ignition switch as a sign of systemic problems in GM’s decision-making process.
“They paint a tragic picture of the cost culture and cover up at General Motors,” the letter states. “The conclusion we draw from examining the two different designs of the ignition switches under consideration in 2001 is that General Motors picked a smaller and cheaper ignition switch that cost consumers their lives and saved General Motors money.”
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