General Motors Co. (GM), moving to expand its immunity from lawsuits after recalling almost 29 million cars in North America, said it sees no need to try to settle customer claims until a judge decides whether it’s legally responsible for faults in its predecessor’s cars.
GM said this week that it will ask U.S. Bankruptcy Judge Robert Gerber before Aug. 11 to dismiss accident and economic-loss claims arising from flaws unrelated to ignition switches in cars sold by old GM, as the pre-bankruptcy company is known. The automaker, fighting more than 120 suits, previously asked the Manhattan judge to affirm 2009 rulings that would free it from responsibility for fallen vehicle values.
“Defendants do not believe that any potential settlement negotiations would be meaningful or productive until the parties and this court know what claims, if any, remain to be litigated after the bankruptcy court decides the matters before it,” the company said in a July 21 letter.
GM Chief Executive Officer Mary Barra has warned that she will fight all claims except for those arising from switch-based accidents. Lawyer Kenneth Feinberg has started to assess those death and injury claims.
GM sent the letter announcing its intentions to the federal judge in Manhattan handling the ignition-switch suits pending a ruling from Gerber.
The automaker said it will reject non-ignition claims over pre-July 10, 2009, accidents and all economic-loss claims related to other faults in old GM cars. New GM was born out of bankruptcy on that date when the U.S. Treasury Department financed its acquisition of old GM’s best assets.
The effect of such a request to Gerber will greatly expand his role in the litigation by forcing him to ordain the future of almost all suits tied to old GM cars. The automaker has to go back to him a second time because it initially asked him only to consider ignition-switch suits over almost unsaleable Cobalts and Ions.
Gerber, handling the 2009 restructuring of a then-shaky manufacturer, ruled that GM didn’t have to pay compensation or punitive damages for its predecessor’s faults, except for certain warranties it chose to take on. The Treasury insisted that the company slough off as many liabilities as possible to aid a turnaround, GM has said. Faults in cars made after its rebirth are its responsibility.
According to GM, U.S. District Judge Jesse Furman is juggling more than 101 suits transferred so far from other courts, mostly demanding compensation for a drop in car prices since the ignition-switch recalls started in February. After Gerber rules on whether they have any legitimate claims, the economic-loss suits could usefully be combined into one class action, GM said.
Delphi Automotive Plc (DLPH), a parts maker named in some suits against the carmaker, might also ask a bankruptcy judge to shield it from such liabilities, GM said.
Separately, customer lawyer Steve Berman wrote Furman, saying GM ought to soon deliver documents on its handling of recalls that it shared with lawmakers. By law, a federal district judge doesn’t have to wait for a bankruptcy judge to rule before allowing certain parts of a litigation to go forward, he said.
The remaining nine ignition suits over deaths and injuries should proceed separately, after staying with Furman while he coordinates requests for documents and information, GM said. The 101 suits were filed by 358 individuals and companies, according to the company.
The carmaker said it already has sought to dismiss one high-profile accident suit, known the Melton case, brought by lawyer Lance Cooper, who’s credited with spurring some of the GM recalls. The case is in Georgia state court. GM said asked the judge to stop Cooper from making separate demands for information from the automaker.
GM today recalled 717,950 more vehicles, citing faulty bolts and welds on seats as well as power steering and turn signal errors.
The case is In Re General Motors LLC Ignition Switch Litigation, MDL No. 2543, U.S. Judicial Panel on Multidistrict Litigation (Manhattan).
(An earlier version of this story was corrected to reflect the date of the GM letter.)
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