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Ruling Opens GM to Billions in Death, Injury Claims


A federal appeals court ruling that
General Motors can't use its 2009 bankruptcy to fend off lawsuits over faulty and dangerous ignition switches exposes the automaker to billions in additional liabilities, according to legal experts.


The 2nd U.S. Circuit Court of Appeals in Manhattan on Wednesday ruled that GM knew about the defective switches when it entered bankruptcy seven years ago but kept them secret from the bankruptcy court. By failing to disclose the problems, GM prevented crash victims from making claims or contesting the bankruptcy provisions, robbing them of due process, the court ruled.
In a 74-page opinion, a three-judge panel said that GM essentially asked the court to reward it for concealing claims. "We decline to do so," the court said.
Under terms of the government-funded bankruptcy, the company that emerged, referred to as New GM, was indemnified against most claims against the pre-bankruptcy company, or Old GM. Retired U.S. Bankruptcy Judge Robert Gerber ruled in April 2015 that most ignition-switch claimants could not sue New GM for damages because the company should emerge from bankruptcy free of claims against Old GM.
But the appeals court overturned most of that decision and allowed hundreds of pre-bankruptcy claims to proceed, including some lawsuits alleging that GM's actions caused the value of its cars to drop.
"I think GM now has to think about its potential exposure as being in the billions," said Erik Gordon, a lawyer and professor at the University of Michigan's Ross School of Business.
When Gerber's ruling came out, plaintiffs' lawyers said it blocked $7 billion to $10 billion in potential legal liabilities.
Steve Berman, a lead attorney in the loss-of-value cases, said the appeals court ruled the bankruptcy order doesn't protect New GM from claims that it misrepresented the safety of cars made by pre-bankruptcy GM. The appeals judges, he said, determined that Old GM knew that the cars could stall and air bags wouldn't work but didn't reveal those facts during the bankruptcy.
"At minimum, Old GM knew about moving stalls and air bag non-deployments in certain models and should have revealed those facts in bankruptcy," the court said. "If a debtor does not reveal claims that it is aware of, then bankruptcy law cannot protect it."
Gerber's ruling took away legal rights of crash victims because they never got a chance to contest the bankruptcy seven years ago, yet they were barred from suing New GM after the defective switches were disclosed, said William Weintraub, an attorney representing ignition switch accident plaintiffs. "The only person who could effectively make an argument in 2009 is somebody who bought a time machine," Weintraub said.
About 1,000 death and injury lawsuits were put on hold waiting for the appeals court to rule, said Robert Hilliard, another attorney in the case. General Motors' filings with securities regulators say there are another 101 U.S. lawsuits pending that allege that GM's actions caused vehicle values to decline.
Gordon said the loss-of-value cases will be difficult to prove, but the death and injury cases are problematic for GM.
General Motors Co. said Wednesday it is weighing options, including an appeal. The company said the appeals court did not decide whether claims against GM are valid. "Many of the claims we face have been brought on behalf of car owners who want to be compensated even though they have not suffered any loss," a company statement said.
The ignition switches, which were put in small cars like the Chevrolet Cobalt, can slip out of the run position and cause cars to stall unexpectedly. They are linked to at least 124 deaths and 275 injuries.
In its ruling, the appeals court said that the desire to move GM through bankruptcy quickly to avoid its collapse was "laudable," but it doesn't do away with basic constitutional principles. It took only 40 days for the bankruptcy to end, an unprecedented period at the time.
"Due process applies even in a company's moment of crisis," the court wrote.
The ruling also could affect 399 injury and death cases settled for GM by compensation expert Kenneth Feinberg for a total of $594.5 million. GM says those who settled gave up their legal rights to sue the company, but Hilliard said he will look into whether some of those claims could be reopened in light of the court's ruling.


Court Ruling Opens GM to Billions in Death, Injury Claims - ABC News
 

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Would someone please explain how the value of the Cobalts and HHRs would drop faster before the ignition switch recall occurred? I can see the personal injury & death claims, but loss of value makes zero sense to me.
 

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Didn't most of these people use heavily loaded key rings causing the issue in the first place? No personal responsibility, I certainly know every day i get in my car If I die due to a fault of my car I'm still at least partially respectable for the numerous factors that played into the accident. GM already agreed to pay 900 million in settlement, what more do you want?
 

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Don't know much about cars, but I think if the ignition switch does not make contact the engine will stop. Also other things could cause the engine to stop, like ignition points get one extra arc of carbon, extremely common problem. For years, GM was using a carbon wire to save a couple of cents on a real coil ballast resistor, internal arcing would create an open circuit killing the engine.

Another is a fuel pump failure, either electrical or mechanical, one major killer when ethanol first came out for cars not designed to handle it, the plastic used in there would swell up seizing the armature, this would sure kill the engine. Was not even a warning on this. Another major problem is getting water in your gas, happened to me this spring in all things, my motorhome.

How about just running out of gas, was a major problem for my kids in college, already getting screwed to the wall with super high tuition rates, those crooks owning broken down apartments charge a huge fortune for rent, price of gas going up to $4.56 a gallon, when they could only find minimum wage jobs, had to work a full hour for a gallon of gas!

Another major problem is the crap they are putting in engines, like aluminum heads and all those cheap plastic sensors. Bit low on coolant, engine would overheat a little and melt that plastic or even crack a head, this also causes an engine to stop.

Problems I had with my Cruze putting the cruise kill switch on the steering wheel, would accidentally bump it, the would kill the engine. Another going up a steep icy hill with that stupid traction control with just a slipping tire, that killed the engine, almost was rear ended in this event.

To fire an injector or a spark plug, millions of transistors are involved, cheapest logic in the world, three level and micron sized with code stored in very volatile RAM, if just one bit is lost or one transistor fails, this would kill the engine.

Can get into these stupid limited lubricated hub bearings, can fail at any time, happened to my wife's coworker, but fortunately she was only going at ten mph, steering wheel was jerked out of her hand, but managed to stop in time, didn't kill the engine, but another newly created hazard. Daughter-in-laws tensioner pulley seized up when driving breaking that stupid single belt drive system practically all vehicles adopted this insane idea.

Own daughter was driving her ZX2 when that stupid plastic idler pulley with a timing belt broke, that sure killed her engine.

Just saying not only a loose detent in an ignition switch can cause a stalled engines, practically all cars today are made like crap, key blame is the EPA, but you cannot sue them.

CEO's are far more concerned to keep the stockholders happy, really have a dislike for people that earn practically tax free money with money than the consumer. While our vehicles experience the same environment as military, forced to use consumer grade components. Would be far better to use PROM for memory, least it doesn't get erased, could be designed for an easy plug in if an update is required. Could add one extra belt for the AC compressor, and how about adding a zerk fitting to hub bearings?

Another obstacle is the EPA itself, far more interested in making our vehicles easier to recycle using the same type of plastic for the bumper as used on the interior, now we have 0.00001 mph bumpers. Don't blame conscientious engineers for this, ether do it their way or get canned. Those ignition switches only needed a slightly stronger spring. Locking steering wheels is another really bad joke.
 

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Didn't most of these people use heavily loaded key rings causing the issue in the first place? No personal responsibility, I certainly know every day i get in my car If I die due to a fault of my car I'm still at least partially respectable for the numerous factors that played into the accident. GM already agreed to pay 900 million in settlement, what more do you want?
Yes they did. GM announced early on via letters to Cobalt owners that they needed to shed keys from their key ring. This was from the "old GM". I suspect what we're seeing here is a slate of class action lawyers who are trying to get some of GM's profits moved to them in the way of legal fees. A couple of weeks ago another law firm sued GM claiming that the CTD doesn't meet EPA standards, despite the EPA actually testing the car on the road.
 

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I still have never had an issue with mine. And my wife had two and never had a problem. Both of us used to absolutely load the **** out of our key rings.

Mine is lowered, with poly/solid mounts - it should be a poster child for this, and it's never once happened.

Then again, I never found myself driving drunk without a seat belt off of the road to cause it to turn off.

Also, some vehicles saw their value increase. I would like to be enlightened how you can sue someone for it decreasing, when it increased.
 

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Discussion Starter · #7 ·
I still have never had an issue with mine. And my wife had two and never had a problem. Both of us used to absolutely load the **** out of our key rings.

Mine is lowered, with poly/solid mounts - it should be a poster child for this, and it's never once happened.

Then again, I never found myself driving drunk without a seat belt off of the road to cause it to turn off.

Also, some vehicles saw their value increase. I would like to be enlightened how you can sue someone for it decreasing, when it increased.
On my last 5 new cars spanning the past 25 years, 4 of the owners manuals had warnings about extra keys and accessories attached to your Key ring, the reason given being for the lock cylinder and proper operation. I thought is was common knowledge not to do this? Sure Cars was never designed to turn off, but I can see how this would happen on many cars causing the ignition position to move and lock the steering column
 

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Wonder if the Cobalts have that - I'd have to look when I get home. Wouldn't that right there resolve them of any liability? Your choice not to follow the directions, face a lowered resale value. With that said - I'm surprised people haven't tried to sue the manufacturer for their value dropping after smoking in the car.

None of our key rings have anything else other than the fob and the key on them anymore - less to do with this and moreso because I was sick of the keys banging against the column, dash or my knee while driving.
 

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None of our key rings have anything else other than the fob and the key on them anymore - less to do with this and moreso because I was sick of the keys banging against the column, dash or my knee while driving.
I, too, switched to a separable key chain to avoid the knee. My ignition key has the ring, a small key for my Thule roof rack, and the connector on the ring. I keep the roof rack key on the ignition ring because I don't want any chance of the engine being started while I work on the roof rack.
 

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Discussion Starter · #10 · (Edited)
Funny thing about the 2014 CRUZE Manual as it doesn't seem to mention anything about not adding other keys, flashlights, rabbits feet, tools, and lord knows what else to the key ring. I noticed this a couple years ago and found it strange as I had a steering wheel lock on an old Toyota as a kid after coasting for about 15 minutes. It was beautiful until I almost flew off the Freeway and it would have been 100% my fault as I turned off the engine in motion. In fact that experience might have saved my life a few years ago when my All Weather mat bunched up under the accelerator causing my Sonata to lose control, having to cut the engine while going about 80 and exiting the road at the correct angle to avoid a tree and a Telephone B box and a pole, or head on traffic in the other direction
 

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Eddy,

The gen 1 Cruze will continue to steer without the engine running. You may not have power assist but the car won't lock the steering either as long as the key is in the ignition. The car's brakes also work.
 

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I, too, switched to a separable key chain to avoid the knee. My ignition key has the ring, a small key for my Thule roof rack, and the connector on the ring. I keep the roof rack key on the ignition ring because I don't want any chance of the engine being started while I work on the roof rack.
It's also a safeguard - you can't forget your roof rack key without forgetting the vehicle key.
 

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Discussion Starter · #13 ·
Eddy,

The gen 1 Cruze will continue to steer without the engine running. You may not have power assist but the car won't lock the steering either as long as the key is in the ignition. The car's brakes also work.
How did you know this? I just tested it and you seem exactly right, of course I didn't want to force the wheel with the engine off that much and mess up the linkage. Brakes would seem another story in motion, I just can't see them working with no hydraulic power after a minute or two?
 

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How did you know this? I just tested it and you seem exactly right, of course I didn't want to force the wheel with the engine off that much and mess up the linkage. Brakes would seem another story in motion, I just can't see them working with no hydraulic power after a minute or two?
Sounds like you never drove a vehicle with mechanical brakes, had three of them, 30 Olds, Ford, and a 33 Buick, also drove a Model T, but even owned one. In 30's cars, starter was a pedal on the floor, would engage any time you stepped on it, in gear, out of gear, even with the engine running, was supposed to have brains. Was moved to the dash board in the 40's added a starter solenoid, more complicated, more problems, 49 Olds with hydramatic added a neutral safety switch. Ignition switch on my 82 P-30 is on the dash, real easy to replace, pain in the butt on the steering wheel, even a worse pain with steering wheel lock, adding in park lock even worse, but added because the public was becoming more stupid.

Drove a friends 57 Chevy recently, remembered why we put suicide knobs on these things, like a dozen turns from lock to lock. Memories are getting dim on my 37 Caddy Limo, a 7,000 pound car, but did have all ball bearing steering, 41 Buick was a dream to drive.

Back then when your vehicle stalled, people would stop to help you, today, they try to run over you. Still trying to find out why they removed the towing hooks.
 

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Eddy,

The gen 1 Cruze will continue to steer without the engine running. You may not have power assist but the car won't lock the steering either as long as the key is in the ignition. The car's brakes also work.
I can attest to this because sometimes I have to move my car if I am behind my daughter's or wife's car and my driveway is a hill and so if I put the turn the key on without starting the car I can coast down onto the other side of the street and park there without starting the car. Comes in handy and saves a cold start/stop on the car.
 

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It's also a safeguard - you can't forget your roof rack key without forgetting the vehicle key.
That hadn't occurred to me but you're correct.
 

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What I don't understand is that did people with the vehicles with sloppy ignition switches complain about this? And were they told by their dealers, dey all do dis, satisfied with this absolute stupid statement and kept on driving their vehicles, even though they knew they were unsafe?

Are dealers and people this stupid? Not just one or two occasions but apparently in the millions. Now you as a person, if you know you have this problem, and the dealer fails to correct this, they you really have the right to sue. Never went this far with my rear disc calipers where the parking brake failed to adjust the pads, but sure had to go way to the top.

With a brake pedal going clear to the floor, the vehicle is just not safe to drive! Difficult to hold my cool when a service manager tells me I don't have brake problems, ain't getting a code, or dey all do dis from another one. And sure talked to a bunch of idiots working my way up to the top.

We are not talking about rocket science here, but a very basic ratcheting system my four year old grandson can comprehend and it the same with this ignition switch, it just won't stay engaged. Certainly even the dumbest person can recognized this, duh, the engine stops, of course it does, this is the purpose of that switch. But keep on driving it this way, not enough brains to switch it back on and end up killing their selves!

Then crooked attorneys join the fight so they can buy a new yacht or whatever, is the whole world going nuts?

Another problem I had with my Cruze is when I took my foot off the gas pedal, took it awhile for the engine to slow down. Idiots are returning the PVC back into the turbo input, crap in there that built up on the throttle vane, carbon, causing it to stall. Had to clean that up so it worked smooth again, should also be a recall on this. Because apparent if that throttle sticks, people are too stupid to even turn off the key like with Toyota and will drive it into a tree.

Sure questioning the safety of DRL's, namely because people are too stupid to switch on their headlamps when conditions call for it. So why didn't these idiots add a couple of more lights to the vehicle, hail no, too expensive. Now you have the BCM with code store in flashram where if just one of a million transistors goes bad, or one bit of code is lost, won't have any headlamps at all. This is really stupid.

Airbags are only good if not wearing your safety belts up to 25 mph, if you are, good up to 40 mph, sure doesn't help to have a bunch of idiots in government that don't even know how to open their hoods, making these laws. And failures in an ABS system, you would have no brakes at all. Not easy living in a country owned and operated by idiots.

TPMS? A 500 buck solution to replace a five buck tire pressure gauge, still can't get air any place, and a spray can to repair a flat? You got to be kidding, but they are not, dead serious.
 
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