GM Shielded From Many Ignition-Switch Lawsuits, Bankruptcy Judge Rules

(Los Angeles Times/TNS) -

General Motors is shielded from claims over deaths and other damages that occurred in crashes before the automaker’s 2009 restructuring in Bankruptcy Court, a federal judge ruled Wednesday, stopping more than 100 cases that center on faulty ignition switches and other claims.

However, people injured in a vehicle built before the bankruptcy but in a crash after the new GM was established can still file a lawsuit against the company, the ruling by Judge Robert Gerber says. Those killed or hurt before the restructuring cannot claim damages from the current company.

“This ruling padlocks the courthouse doors,” Bob Hilliard, a Texas attorney representing ignition-switch victims and their families, said in a statement. “Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions, may now turn its back on the dead and injured, worry free.”

Attorneys representing people who were injured had argued that the automaker’s failure to promptly recall vehicles with a defective ignition switch represented a fraudulent action that warranted the Bankruptcy Court allowing lawsuits to proceed against the surviving company.

“Judge Gerber properly concluded that claims based on Old GM’s conduct are barred, and that the sale order and injunction will be enforced for such purposes,” GM said in a statement.

The ruling also blocked lawsuits from people who hoped to claim economic losses by, essentially, arguing that the recall scandal had damaged the value of their GM cars.

Wednesday’s ruling determined whether GM retained liability for crashes occurring in 2.6 million vehicles recalled for ignition-switch failures. In those cases, the faulty switch can suddenly shut down the vehicle, turning off crucial functions such as the power steering and air bags. GM waited until last year to recall the vehicles even though the automaker knew about the problem for at least a decade.

The defect is responsible for at least 84 deaths and 157 injuries, according to Kenneth Feinberg, a victim-compensation consultant hired by GM.