As expected, General Motors has been sued on behalf of vehicle owners over the ignition switch flaw in some small car models it no longer makes.
According to Bloomberg News, Bob Hilliard, one of the lawyers who filed the complaint in federal court in Corpus Christi, Texas, said he sought to recover US$6bn to $10bn for the lost value of cars affected by the recall (Toyota faced several similar suits after ‘unintended acceleration’ claims that resulted in recalls, federal regulatory action and a large fine several years ago).
Go deeper with GlobalData
The Texas suit is based on claims GM concealed the defects and the “diminution in value” of the owners’ vehicles, and not deaths resulting from crashes when the engines stopped because keys came loose, Bloomberg noted.
“These vehicles, all they have to do is get on the road for this defect to manifest,” Hilliard told Bloomberg in a phone interview. “This is a true safety defect.”
GM has acknowledged 12 deaths in connection with the recall of models made in the mid-2000s, including some Chevrolet Cobalts and HHRs and other Opel, Pontiac and Saturn models. It has said it’s continuing to review data and information related to the recall, Bloomberg noted. Those reportedly investigating the company include the House Energy and Commerce Committee, the Justice Department and the Transportation Department.
“GM is focused now on ensuring the safety and peace of mind of our customers involved in the recall,” Greg Martin, a company spokesman, said in an e-mail to Bloomberg News, responding to a request for comment on Hilliard’s lawsuit. “Our principle throughout this process has been to the put the customer first, and that will continue to guide us.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe complaint filed by Hilliard seeks class-action status to represent all vehicle owners affected by the recall. The named plaintiffs in the case are a couple from Texas who own a 2007 Chevrolet Cobalt, one of the recalled vehicles.
Hilliard also represents the families of two teenagers who died in a 2006 crash of a Cobalt in Wisconsin. He said in an earlier interview with Bloomberg about that claim that GM’s bankruptcy reorganisation shouldn’t shield it from liability for the pre-2009 crash.
While bankruptcy typically protects companies from new claims that predate the reorganisation, GM didn’t present the full extent of its ignition-switch liabilities, Hilliard told Bloomberg.
“If you are aware of potential exposure to litigation and you don’t reveal it, that’s fraud,” he said. “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’.”
To persuade US bankruptcy judge Robert Gerber in Manhattan to reconsider the terms of GM’s reorganisation, Hilliard or other lawyers would need to gather evidence and prove that the old GM had knowingly deceived the judge, Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll, who wasn’t involved in the GM liquidation, told Bloomberg News.
“A few bankruptcy cases have been set aside for fraud on the court but you have to establish deliberate fraud and concealment,” said Bowles.
Gerber earlier reportedly declined to comment on past or pending cases.
In 2010, Hilliard filed one of at least 10 wrongful death lawsuits against Toyota over claims its cars suffered from a defect that caused sudden, unintended acceleration, Bloomberg’s report added.
