Feinberg Helped Settle Key GM Ignition Death Case

A personal appeal by Ken Feinberg and the fifth anniversary of their daughter’s death led a Georgia couple to accept a second settlement that was larger than the first, the family’s lawyers said Monday.

The General Motors Ignition Compensation Fund, which Feinberg has led since its creation last August, has offered settlements to 67 families whose loved ones died in crashes caused by defective ignition switches, three higher than the week before.

Last spring, Ken and Beth Melton returned an initial $5 million settlement to GM in a case that broke open the legal, regulatory and political backlash over the automaker’s defective ignition switches that have cost the automaker $2.8 billion so far. Their daughter Brooke died in a 2010 accident near Atlanta in which she lost control of her 2005 Chevrolet Cobalt.

“Ken and Beth told us they were emotionally exhausted,” Lance Cooper, the Meltons’ attorney, said in a conference call with reporters Monday. In addition to the settlement through the compensation fund, Cooper said the Meltons settled for an unspecified amount with Thornton Chevrolet, the Lithia Springs, Ga., dealership where their daughter bought her car.

Depositions in the Meltons’ lawsuit led to disclosures that GM engineers knew as early as 2003 that the ignition switches could slip out of the “on” position, cutting off electricity to steering, air bags and other functions. Emails discovered in the lawsuit showed that GM engineer Ray DiGeorgio denied ordering a design change in the switch despite other evidence that he did change the design.

The Meltons’ original settlement was placed into an escrow account because GM would not accept it, said Cooper. In January, the Meltons filed a claim with the GM Ignition Compensation Fund. Feinberg flew to Atlanta and met with Cooper and another attorney, Jere Beasley, to encourage them to pursue the Meltons’ claim rather than proceed with a separate lawsuit.

Asked if the couple will receive more than the $5 million they rejected, Cooper said, “You can assume that given the circumstances.”

GM declined to comment on Cooper’s and Beasley’s comments in the conference call.

GM still faces more than 100 lawsuits seeking lost economic value of vehicles equipped with the defective ignition switch and other parts that led to recalls. Most of those have been consolidated before U.S. District Judge Jesse Furman in New York.

The automaker has argued that its 2009 bankruptcy restructuring included a condition protecting it from product-liability claims over vehicles produced before it exited bankruptcy. U.S. Bankruptcy Judge Robert Gerber is expected to rule on that issue in coming months.

Cooper told reporters that documents from those “lost economic value” lawsuits could shed new light on what and when GM knew of the ignition-switch defect and whether senior executives, including current CEO Mary Barra, knew about it before December 2013.

An independent investigation conducted by former federal prosecutor Anton Valukas was very critical of GM’s handling of the ignition-switch crisis. But it concluded that Barra and other senior executives didn’t learn of the problem’s scope until shortly before GM began recalling about 2.5 million small cars in February 2014.

Feinberg’s fund added three claims as of Friday, bringing the total to 67 death claims and 113 personal-injury claims eligible for compensation. He and his staff have received 4,343 claims, and 1,492 are still under review.

GM has estimated the cost of those settlements will be between $400 million and $600 million when the process is completed.

This article appeared in print in the March 17th, 2015 edition of Hamodia.