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GM Urges Judge to Block Ignition Claim Lawsuits


Posted On behalf of Simien & Simien on Nov 10, 2014 in Defective Products

On Nov. 6, General Motors Co. (GM) urged a judge to reject lawsuits demanding $10 billion for diminished value claims filed on behalf of consumers whose vehicles were recalled this year for ignition-switch defects and more.

According to the auto manufacturer, the company should not be held liable for vehicles that were built and sold before the company filed for bankruptcy in 2009. GM claims that their bankruptcy shielded “new” GM from “old” GM’s obligations.

Federal Judge Robert Gerber intends to hold a hearing on Jan. 26, 2015 and then make a decision approximately 30 days after the hearing. If Gerber sides with GM, consumers suing over the diminished value of their GM vehicle may not receive any compensation. However, if the judge sides with consumers, General Motors could be left with a $2 billion tab.

Although the automaker has started to settle claims for drivers and passengers injured in auto accidents that involved their recalled vehicles, the company intends to fight all other lawsuits. About 130 diminished value lawsuits against General Motors have been combined into two class actions in the U.S. District Court in Manhattan. The groups are split between vehicles manufactured before the bankruptcy and those built after it.

Gerber has said that if he determines that he was misled about GM’s knowledge of the defects or decides that the company knew enough to warn consumers, the bankruptcy protection could be terminated. If such a decision is made, GM could be subjected to even more lawsuits.

Additionally, new information has been disclosed revealing that General Motors ordered 500,000 replacement ignition switches to fix Chevrolet Cobalts and other small cars almost two months before they alerted federal safety regulators of the problem. Emails exchanged by a GM contract worker and Delphi Automotive, the ignition-switch supplier, indicate that GM placed an “urgent” order of replacement switches on Dec. 18, 2013.

If you or someone you love has been injured due to a defective General Motors vehicle, the product liability lawyers at Simien & Simien can help you determine what your legal options are.

For a free case review, call us at (800) 374-8422 or fill out our online contact form.