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GM seeking to avoid liability for faulty ignition switch

General Motors has made a controversial filing in federal court, asking a judge to shield them from liability in about 50 class action lawsuits stemming from a dangerous product defect in vehicles that date back more than ten years. The defect in this case is the faulty ignition switch, which would become loose and shut off the car’s electrical system, causing essential safety systems like the airbags not to deploy. 

The defect has been linked to multiple deaths and many car crashes that have caused injuries. Plaintiffs in these personal injury cases and safety officials accuse the car company of knowing about the defect but concealing it for at least at decade, to the peril of many drivers and passengers on the road. Now, General Motors is saying that because the suits have been filed after their 2009 bankruptcy proceeding, that they should be shielded from liability per the general rule in bankruptcy cases. The motion is controversial because the issue arose many years before the bankruptcy and the car company hid it from the public, leading to questions about misconduct or even fraud.

The car company says that they have not yet decided whether to ask for bankruptcy protection from the wrongful death lawsuits filed prior to the bankruptcy proceeding. General Motors is arguing that in order to move forward with the “New GM” they must rid themselves of the problems of the “Old GM”. The fact that the car company took taxpayer money to revitalize itself and is now asking to be absolved of liability to the public seems questionable at best, particularly to families who have lost a loved one due to this product defect

Source: ABA Journal, “GM seeks bankruptcy court ban on class actions alleging lost value due to car ignition-switch issues,” Martha Neil, April 22, 2014.

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