NHTSA Report Ups Ante At GM Depositions | News | HMG LLP

NHTSA Report Ups Ante At GM Ignition Switch Depositions

August 31, 2017

Source: Law 360

Law360, New York (June 8, 2015, 8:15 PM ET) -- The National Highway Traffic Safety Administration's report acknowledging its failings in investigating the General Motors Co. ignition switch defects did not contain new revelations, but its stark language accusing the automaker of withholding safety concerns well before last year's recall could raise the heat on GM executives being deposed this summer.

NHTSA issued a report Friday striking a contrite note after its assessment of its own investigations since 2005 of ignition switch-related crashes. The agency admitted in its report to failing to trace crashes of GM vehicles that involved air bag non-deployment back to faulty ignition switches, but in doing so, also pinpointed how GM's silence to the agency frustrated its efforts, experts say.

The agency began its report by declaring that its review showed GM's "clear" knowledge of the defect since 2001 — more than a decade before the automaker announced its recall in February 2014 — and proceeded to state that the automaker's in-house and external attorneys had "repeatedly warned" it about a potential vehicle defect impairing air bags.

Attorneys say that even if the report doesn't necessarily present brand new evidence, plaintiffs attorneys in the ongoing ignition switch multidistrict litigation in New York will use such statements by the agency to interrogate the dozens of current and former GM employees and executives, including CEO Mary Barra, scheduled to be deposed until October.

"The report looks to be based on many of the same sets of documents that plaintiffs attorneys have, but perhaps [plaintiffs] may leverage the fact that NHTSA, as a government agency, has come to certain conclusions about who knew what and when," said Thomas Regan, chairman of LeClairRyan's product liability practice.

In its report, the agency highlighted that GM had known about ignition switch issues in the Saturn Ion since 2001, and of similar problems in the Chevrolet Cobalt since 2004. It affirmed its findings that a GM engineer approved a switch that didn’t meet the automaker’s own torque requirements and then in 2006 took the extraordinary measure of approving a replacement but retaining the old part number, violating company protocol.

The engineer, Ray DeGiorgio, is scheduled to be deposed on June 18 and 19 in the ongoing ignition switch MDL in New York federal court. Depositions in the MDL began in May and are scheduled to take place until Oct. 8, when GM CEO Barra is scheduled to be deposed, according to a deposition calendar.

Since a bankruptcy judge’s ruling in April that the automaker’s 2009 bankruptcy blocks claims over its conduct before its bankruptcy, plaintiffs in the federal MDL have been refocusing their efforts toward showing what they claim are continuing actions by New GM after its bankruptcy to mislead consumers and federal auto regulators about the ignition switch defect.

NHTSA’s statement in its report that GM took until 2014 to admit the defect and initiate the recall of 2.6 million vehicles, even though its attorneys knew of the defect from key depositions in April 2013 in the crucial Brooke Melton case, could help plaintiffs attempting to build their case against New GM, attorneys say.

"A lot of the conduct that we're developing through the course of these depositions is meant to lead us toward a gross negligence finding and potential punitive damages award at trials," said Bob Hilliard of Hilliard Munoz Gonzales LLP, one of the lead counsel for the MDL plaintiffs.

"The [NHTSA report's] absolutely unequivocal labeling of GM in regards to its misleading intent is very important, and it can open up the door for huge awards," he said.

The first bellwether trial in the litigation is scheduled to take place in mid-January 2016. U.S. District Judge Jesse Furman, who is presiding over the litigation, is scheduled to select a case for trial after July this year. The cases being prepared for trial all involve accidents that took place after GM's bankruptcy, in cars that were made before the bankruptcy, according to court records.

Although NHTSA admitted its failure to make a link between ignition switch issues and air bag nondeployment, industry observers say also that the agency's assumptions about the air bags were not necessarily completely off-the-mark.

Airbags are not necessarily designed to deploy in all crashes and are often designed not to deploy in low-speed impacts, as air bags could potentially do more damage in that scenario than good, auto regulators have said. Plaintiffs attorneys may also raise that line of argument in depositions to try to make the point that New GM's continuing silence hampered NHTSA, experts say.

"GM certainly was not forthcoming with NHTSA in identifying relationship between ignition switch and air bag deployment," said Allan Kam, a former senior enforcement attorney at the agency.

The lead plaintiffs' counsel in the MDL are Steve W. Berman of Hagens Berman Sobol Shapiro LLP, Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein LLP and Robert C. Hilliard of Hilliard Munoz Gonzales LLP.

GM is represented by Richard C. Godfrey and Andrew B. Bloomer of Kirkland & Ellis LLP.

The case is In re: General Motors LLC Ignition Switch Litigation, case number 1:14-mc-02543, in the U.S. District Court for the Southern District of New York.

--Editing by John Quinn and Philip Shea.

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