What Will Faulty Ignition Switches Cost GM?

Product Liability ▶ Courts will help determine the value of legal claims ▶ “You get a $100 million verdict, and you don’t see another trial”

Dionne Spain was driving her 2007 Saturn Sky over the Crescent City Connection bridge in New Orleans in January 2014 when she hit her brakes to avoid a multi-car pileup. The car didn’t stop, and its power steering failed, she said. Spain rear-ended the vehicle in front of her, scraping the bridge’s inside rail. The accident left her with back and neck injuries. A passenger, Lawrence Barthelemy, was also hurt.

On March 14, Spain and Barthelemy will take their lawsuit against General Motors, maker of Saturn, to trial in federal court in Manhattan, alleging a defective ignition switch caused the brakes and steering to fail just when Spain needed them most. The case is the first big test for plaintiffs’ lawyers and the carmaker’s attorneys in assessing the strength and value of hundreds of similar allegations against GM. At least 17 cases scheduled for trial in state and federal courts this year will help determine how much the automaker will have to pay to resolve all the claims.

GM recalled millions of vehicles in 2014 over an ignition switch that could move and shut off the engine, disabling the power steering and brakes and preventing air bags from deploying. The defect has been linked to at least 124 deaths and an additional 275 injuries. The carmaker has paid at least $870 million to settle death and injury claims, and an additional $900 million to the Department of Justice to resolve a criminal investigation. But more than 900 claims remain, and new cases are filed almost every week.

Each side looks for patterns in the initial trials to come up with a rough estimate of the value of individual cases, says Carl Tobias, a law professor at the University of Richmond. The strategy changes depending on who wins or loses: A GM win in one case could lead several others to be dropped, while a big loss could push up a plaintiff’s settlement demands. “If there are a couple of big wins for the plaintiffs or the defense, that’s when people start getting serious about settlements,” Tobias says.

GM is focusing on six test cases in federal court, so-called bellwethers, to “establish the settlement values for cases with similar claims,” says GM spokesman James Cain. The SpainBarthelemy suit is one of three GM chose as a bellwether. Plaintiffs’ lawyers also selected three, including the first case that went to trial in January but was dismissed following accusations the plaintiffs lied on the stand.

For decades, massive product-

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