General Motors knew about a fault in some ignition switches as far back as 2001, but didn’t issue a recall until early 2014.
The fault, which can cause a vehicle to turn off while being driven, has been linked to at least 124 deaths and has already cost the company $2 billion in settlements.
That’s just the beginning, though, as another $10 billion in lawsuits looms on the horizon. GM doesn’t want to pay up and is using its 2009 bankruptcy as a shield against taking responsibility for the fatalities.
An appeals court ruling last month said the U.S. automaker can’t do that, but GM disagrees.
An earlier lower court ruling said that General Motors had no responsibly for accidents that happened before 2009.
The appeals court disagreed and overturned that ruling, saying GM knew about problems with the ignition switches at the time of bankruptcy, but it waited until early 2014 to make the defect public. That violated the due process rights of its consumers, the court ruled.
The Wall Street Journal explained GM’s response,
The decision “makes no sense and is flatly contrary to the bankruptcy code and decisions from other courts,” the Detroit auto maker said. GM said the court’s decision, if not reversed, would permanently damage the bankruptcy process that saved it from collapse in 2009.
That says a lot about GM, doesn’t it? It makes the company seem more concerned with saving money and hiding behind the bankruptcy process than taking responsibility for car accidents and deaths that it directly caused.
Steve Berman, co-lead counsel for the plaintiffs in the case, said,
The appeals court’s ruling today solidifies something that we have known from the very beginning of this suit — GM’s bankruptcy filing was a calculated move in its effort to conceal and cover-up its actions.
Unless another appeal results in a judgment in GM’s favor, it appears the automaker will indeed be left open to face lawsuits that attempt to settle damage, and death, caused by the faulty parts.
As the appeals court wrote in its ruling, “Due process applies even in a company’s moment of crisis.”
Should General Motors have to settle all accidents caused by the faulty ignition switch regardless of its bankruptcy filing?