Lawyers Restart Ignition Switch Litigation | News | HMG LLP

Lawyers Restart GM Ignition Switch Litigation

August 31, 2017

General Motors office building

Source: Law.Com by Amanda Bronstad

Lawyers are restarting the litigation against General Motors Corp. over its ignition switch recalls after a pair of rulings this month sent the cases down a different road.

On Monday, lawyers submitted a joint letter on how to proceed in light of a July 13 ruling by the U.S. Court of Appeals for the Second Circuit and a July 15 decision by U.S. District Judge Jesse Furman, who is overseeing the multi­district litigation in New York. Taken together, the rulings wiped out a potential $10 billion case that GM's unprecedented string of recalls in 2014 hurt consumers but green-lighted a new group of lawsuits that plaintiffs attorneys hope could reverse a line of unsuccessful trials this year.

"It opens up a whole tranche of cases that are very valuable potentially in regards to jury verdicts," said Robert Hilliard of Hilliard Martinez Gonzales, lead plaintiffs attorney in the personal injury and wrongful death cases. He estimated that as many as 1,000 cases could now move through the courts.

The new cases now in play come after the Second Circuit reversed a 2015 decision by U.S. Bankruptcy Judge Robert Gerber that had barred certain claims due to GM's 2009 bankruptcy.

The ruling allows victims of accidents before GM's 2009 bankruptcy to move forward with their cases, which allege that a defect caused the ignition switch to slip in the accessory position, disabling air bags and electrical systems.

In Monday's letter, plaintiffs lawyers suggested that the new cases be part of the next slate of bellwether cases. In the GM cases, the first trial fell apart amid revelations that the plaintiff might have lied and a second resulted in a jury finding that the defect didn't cause injuries from an accident that occurred on black ice. A third settled and a fourth was voluntarily dismissed. The fifth is set for Sept. 12, and a sixth on Nov. 14.

GM has opposed the move. In Monday's letter, GM said it would seek a rehearing en banc and, if necessary, petition the U.S. Supreme Court. In an emailed statement, GM spokesman James Cain wrote: The Second Circuit's ruling neither addresses nor decides the merits of any claims. But cases that date before 2009 have another edge, said Alexandra Lahav, a professor at the University of Connecticut School of Law. "The difference is there was a point at which the defect became known," she said. And the plaintiffs who couldn't have known of the defect because GM was keeping it a secret—an ordinary person would find those cases moving.

She predicted that settlements could be coming soon. "It would be really surprising if GM doesn't settle these cases," she said.

The Second Circuit's ruling also opened the door to claims involving other defects and added 2.1 million affected vehicles to a separate case being brought on behalf of consumers, said Steve Berman, managing partner of Seattle's Hagens Berman Sobol Shapiro.

Berman, who is lead counsel in that case, said he planned to file a new complaint on behalf of consumers of about 12 million cars recalled for ignition problems, plus millions more that were recalled for defective wiring harnesses and electronic power steering, he said.

Originally much broader in scope, the consumer case crumbled this month when Furman dismissed both the brand claims and allegations that GM conspired with King & Spalding, GM's outside counsel, as part of a racketeering enterprise to confidentially settle the ignition switch cases.

The court made it clear the plaintiffs overreached in many aspects of their complaint and the ruling significantly curtails the scope of their potential recovery, wrote Cain, the GM spokesman.

Berman said the new complaint would drop the racketeering charges but continue to insist that consumers lost brand value, not just economic losses stemming from the defects. "I think I might," Berman said. "So I'm going to keep fighting that fight."

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