GM Nears Ignition-Switch Case Settlements
  • Sep. 05, 2016

Source: The Wall Street Journal by Mike Spector

General Motors Co. is near settling the final two ignition-switch cases slated for trial in a New York federal court this year, moving the Detroit auto maker closer to clearing remaining legal hurdles stemming from a safety defect linked to 124 deaths.

The cases were the final two among a half dozen selected for so-called bellwether trials aimed at setting settlement patterns for remaining personal injury and wrongful death suits. The cases arose from roughly 2.6 million older cars GM recalled in early 2014 with faulty ignition switches that risk jostling off and cutting power to engines and safety features including power steering, power brakes and air bags.

GM reached a preliminary agreement last week to settle the lawsuits, which alleged injuries tied to the defective ignition switches, said Bob Hilliard, a Texas plaintiffs’ lawyer involved in the litigation.

Lawyers are expected to file court papers as soon as this week alerting a judge the cases have been settled, he said. Mr. Hilliard, who declined to reveal the settlement payouts, said GM’s willingness to settle “creates momentum” to continue resolving litigation in a sprawling New York legal proceeding culling hundreds of cases brought by thousands of plaintiffs.

“We have an agreement to settle the last two federal bellwether cases scheduled for 2016,” said GM spokesman Jim Cain, adding the terms are confidential.

GM has found ignition-switch trials in New York and a separate Texas proceeding this year “extremely helpful,” Mr. Cain said. Juries have weighed all evidence and “not just the mistakes GM has already admitted…helping all of the parties achieve their common goal: the fair and timely resolution of lawsuits,” he said.

The latest two cases were set for trials this month and November, respectively. They each involved alleging injuries motorists suffered in crashes that were tied to GM’s defective switches and subsequent air-bag failures.

GM previously reached settlements over the safety lapse with the U.S. Justice Department, shareholders and thousands of consumers totaling more than $2 billion. Included in that total, the Detroit auto maker about a year ago paid a $900 million penalty and admitted to misleading regulators and consumers about the defective switch when settling a U.S. criminal case.

A report GM commissioned by former U.S. attorney Anton Valukas found the auto maker failed for more than a decade to recall vehicles with the faulty switch despite internal evidence of a safety problem. Chief Executive Mary Barra dismissed 15 employees, including lawyers and engineers, in the wake of the report and overhauled GM’s safety processes.

Write to Mike Spector at mike.spector@wsj.com