Lawsuit may test GM immunity
‘New’ GM vs. ‘old’ GM liability at issue
A lawsuit by families of two girls killed in a now-recalled Chevrolet Cobalt, which could be filed as early as today, would test General Motors’ legal immunity from liability for deaths or injuries before the current company was created out of the government-supported bankruptcy in July 2009.
The “new GM” was left free of old claims and lawsuits, which remained with “old GM,” a shell holding assets and liabilities that did not go with the “new GM.”
Canadian authorities are investigating whether a June 2013 fatal crash in Quebec is tied to the problem that forced GM to recall 1.62 million cars worldwide last month — 1.37 million in the U.S., 235,855 in Canada, and a handful in Mexico and overseas.
Transport Canada is studying data from the 2007 Chevrolet Cobalt’s “black box” recorder to see if the Quebec crash involved an ignition switch that had moved out of the normal “run” setting into “accessory,” and air bags that failed to inflate. That’s the combination that forced GM’s recall, which includes the 2007 Cobalt.
The Canada crash would be the most recent death among the recalled cars, 31⁄ years after the December 2009 death that’s the last-known fatality related to the recall. GM says it knows of 31 crashes and 12 deaths linked to the recall. Because there are so many recalled GM cars still on the road, it’s unclear why the deaths would have halted years ago. If the Canadian crash is linked to the recall, it could provide new insight. GM hasn’t ruled out that more than 12 have died.
The lawsuit that would test how insulated the “new GM” is from problems created by the “old GM” is being brought by the families of Natasha Weigel, 18, and Amy Rademaker, 15.
They were passengers in a 2005 Cobalt, driven by Megan Ungar-Kerns, on Oct. 24, 2006, when the car veered off the road, sailed through the air and slammed into a grove of trees. The driver survived but suffered severe head injuries and has no recollection of the accident.
None was wearing a safety belt, investigators said.
GM’s stance is that the families have no legal recourse because their accident occurred before the “new GM” was created in 2009. But GM documents filed with federal safety regulators show the company knew of a problem with ignition switches on Saturn Ions as early as 2001. It redesigned the faulty ignition switch, but a problem was reported in 2003 by a mechanic. Depositions in a now-settled civil suit show a GM engineer experienced the problem in 2004, and others at GM were able to replicate it.
“That ( bankruptcy) shield will be shattered by their active fraud over 10 years,” said Bob Hilliard, an attorney representing the girls’ families. “There’s some pretty black-letter bankruptcy law that says you can’t fail to disclose information that might result in future liability.”
The suit would accuse GM of fraudulently keeping information about defective ignition switches from bankruptcy court.
Recalled: 2005-2007 Chevrolet Cobalt; 2007 Pontiac G5; 20032007 Saturn Ion; 2006-2007 Chevrolet HHR; 2006-2007 Pontiac Solstice; 2007 Saturn Sky.
Ignition switches can unexpectedly move from the “run” position into “accessory.” That shuts off the engine and kills power to air bags and other systems. Heavy key rings can make the problem worse. Dealers will replace switches, starting next month.