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Lawsuits, Federal scrutiny mount for GM over ignition switch recall.


Reuters reports on motorist outrage at the notion that GM sat on information concerning a faulty ignition switch in its cars for years without informing regulators. The article details the experiences of several drivers of affected cars, some of whom have posted complaints on the website, which sends information to NHTSA. The article notes the ongoing NHTSA probe as well as the Administration’s description of the faulty switch that could get shifted from the “on” position to the “accessory” position. The article also references plaintiffs’ attorneys from civil litigation who scoff at GM’s offer of a $500 credit towards the purchase or lease of a new car for affected drivers.

The Detroit Free Press reports that a lawsuit has been filed stemming from a 2006 crash in Wisconsin that killed two teenage girls who were driving in a 2005 Chevrolet Cobalt, one of the vehicles affected by the recall. The suit is also being filed “on behalf of anyone who has bought or leased a vehicle suspected of having a faulty ignition switch” and seeks compensation for the decrease in resale value for the affected vehicles. Plaintiffs allege that the accident in question was not related to alcohol use but was rather affected by the shutting down of power systems caused by the malfunctioning switch. The article notes that the lawsuit “could be the first test of GM’s legal immunity from liability for deaths or injuries in accidents that happened before the current company was created” following the 2009 bankruptcy. The article notes that GM documents filed with NHTSA “show the company knew of a problem with ignition switches on early Saturn Ions as early as 2001.”

The New York Times reports that Canadian politicians are looking into how national transportation officials handled the information they had on the ignition switch issue. Transport Canada had recently announced “that it would investigate the links between General Motors’ ignition-switch defects and a fatal crash last June.” The article notes that 236,000 of the recalled vehicles across six models are in Canada. The accident from June 2013 occurred in Quebec and involved a “high-severity motor-vehicle collision when the vehicle went off road and impacted multiple trees,” killing the driver who was not wearing a seatbelt at the time.

USA Today reports that Transport Canada is analyzing black box data from the vehicle, identified as a 2007 Chevrolet Cavalier. The last known fatality to have been linked to the defect was in 2009, while the article notes that GM mechanics noticed the issue in 2004 while testing the 2005 Chevy Cobalt. The article also points out that NHTSA’s fine for GM could be as high as $35 million, while the Department of Justice is said to be examining the possibility for criminal charges.

Bloomberg News reports that the recall, which was only doubled to include 1.6 million vehicles on February 25, has “clouded the reputation of the biggest U.S. automaker … and raised a question that investigators in Washington, New York and inside GM are pursuing in parallel: Why didn’t GM recognize the potential dangers sooner?” NHTSA Spokesman Nathan Naylor reportedly explained that NHTSA “didn’t force GM to conduct the recall sooner because GM hadn’t provided timely information about the connection between defective ignition switches and failing air bags.” The article discusses at length a wrongful death lawsuit being pressed by Georgia plaintiffs stemming from a 2010 crash. The article includes a statement from GM Spokesperson Greg Martin acknowledging that the company’s decision-making process “was not as robust as it should have been.”

The Automotive News reports on a fatal 2009 crash in Pennsylvania in which a 2005 Cobalt’s airbags failed to deploy, with NHTSA investigators unable to provide a connection to the ignition switch issue at the time. The article provides a timeline of the events in the case, including a related 2005 service bulletin that GM had sent out. The article also notes that GM must provide “reams” of information to House and Senate committees by March 25 and must address the 107-question list from NHTSA by April 3. One industry analyst compares the crisis for GM to the infamous Ford Pinto episode, and the article suggests that the $100 million in repair costs could pale in comparison to results from the wave of litigation and potential government fines.

GM retains two law firms to investigate how company handled ignition switch defect. Under the headline “General Motors Calls The Lawyers,” the New York Times reports at length on GM’s choice to retain law firms King & Spalding and Jenner & Block, to proceed with a thorough “investigation into why the company failed for more than a decade to alert regulators and consumers to the defect.” According to the report, “hiring outside counsel in these cases is part investigation, part public-relations gambit and part legal strategy.” The report notes that the company’s decision to retain the two firms happened “just days after” NHTSA sent GM “a detailed order” demanding answers to “107 specific questions related to the defect and the company’s handling of it.”

The Los Angeles Times reports that GM “has acknowledged to the National Highway Traffic Safety Administration that at least 12 deaths and 31 traffic accidents have been linked to its vehicles’ faulty ignition switches.”


GM customers file class action suits.

TIME reports that a class action suit representing “customers claiming their vehicles lost value because of serious safety problems with General Motors vehicles” was filed on Friday, and will probably be just “the first of many.” The suit says that “GM’s mishandling of the ignition switch defect….has adversely affected the company’s reputation as a manufacturer of safe, reliable vehicles with high resale value.”

Bloomberg News reports that attorney Bob Hillard and other lawyers filed for a class-action suit against GM yesterday in Federal court in Corpus Christi, Texas, seeking “to recover $6 billion to $10 billion for the lost value of cars affected by the recall.” As for the fact that GM’s bankruptcy makes it no longer liable for accidents that happened before it sought bankruptcy protection, Hillard comments that “I’m going to go back to that bankruptcy judge and say, ‘You have to undo this, the liability of old GM, because it was the new GM’s continued coverup after the bankruptcy that allowed people to be hurt or killed.’” According to Bingham Greenebaum Doll LLP bankruptcy attorney Chip Bowles, however, “A few bankruptcy cases have been set aside for fraud on the court, but you have to establish deliberate fraud and concealment.”

We believe that obtaining legal satisfaction from those who harmed you shouldn’t require more hardship. That’s why we do everything we can to streamline the process, and we will file a lawsuit on your behalf if necessary. If you or a loved one has been affected by this recall, and you believe it caused an injury, contact Chhabra & Gibbs today by calling this number: 601-948-8005.

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