GM has lost its bid to bar hundreds of ignition-switch lawsuits when the U.S. Supreme Court refused to hear the automaker’s appeal claiming it isn’t liable for pre-bankruptcy filings. The Supreme Court left intact last year’s ruling by the 2nd U.S. Circuit Court of Appeals that General Motors remains responsible for injury, death, and diminished-value claims that occurred before its 2009 bankruptcy. The lower court found that GM was still responsible for the older claims because it knew about the ignition switch defect for more than a decade but concealed it from the bankruptcy court and its customers.
GM appealed the 2nd Circuit Court’s ruling and contended that “well-established bankruptcy law allowed the newly reorganized GM to obtain the old company’s assets ‘free and clear’ of liabilities.” GM began recalling about 2.6 million vehicles in 2014 over the deadly defect, which allowed the ignition to be jostled into the off or accessory position with the vehicle in motion, causing it to lose power steering, speed, anti-lock brakes, and airbag protection. These faulty ignition switches caused hundreds of GM cars to crash. The GM ignition switch defect has been liked to 124 deaths and 275 injuries. The automaker has already paid about $2 billion to settle civil complaints and criminal charges in connection to the ignition switch debacle.
The 2nd Circuit’s ruling reversed a ruling by a U.S. bankruptcy judge in 2015, who drew a line between the liabilities of the pre-bankruptcy “Old GM” and the post-bankruptcy “New GM.” This effectively shielded the “New GM” from any claims involving vehicles and accidents before its June 2009 bankruptcy. The Supreme Court’s refusal to hear GM’s appeal is most significant. GM will face at least 1,000 additional lawsuits.
Beasley Allen and The Cooper Firm represented individuals and families throughout the country who were harmed by the ignition switch defects in GM vehicles. We, working with Lance Cooper, settled a large number of cases with GM last year. Our lawyers welcome the opportunity to work with lawyers on any GM ignition switch cases. For more information about how this recent ruling may affect claims, contact Beasley Allen lawyer Dana Taunton at 800-898-2034 or by email at Dana.Taunton@beasleyallen.com.
Sources: Bloomberg, Associated Press and Law360.com
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