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GM Ignition-Switch Suits to Be Consolidated

First Published      Last Updated Jun 09 2014 05:42 pm

A panel of federal judges handed General Motors a modest but meaningful victory Monday, consolidating the pretrial phase of more than 80 lawsuits against the company into a single proceeding in Manhattan — the venue sought by the automaker.

The cases, most seeking class-action status, have been filed around the country on behalf of owners of Chevrolet Cobalts, Saturn Ions and other cars that GM recalled this year for a dangerously defective ignition switch. Owners are seeking compensation for lost value of the vehicles and other economic damages from the company's decade-long failure to address a safety problem that it now links to 13 deaths.

GM's ultimate strategy is to have the cases dismissed, and toward that end, it has asked Judge Robert E. Gerber of U.S. Bankruptcy Court in the Southern District of New York to rule that the cases violate a provision of the company's July 10, 2009, restructuring agreement that protects it from legal claims stemming from incidents before that date. (Most of the recalled cars were manufactured before 2009.)

The ruling by a seven-judge panel Monday puts the cases in the same district as Gerber — though this proceeding will be overseen in district court by Judge Jesse M. Furman — and is thought by some legal observers to be potentially more favorable to the automaker because of the familiarity with the issues involving the bankruptcy. GM welcomed the decision with a written statement Monday afternoon.

"This order affirms what we've maintained all along," the company said in a written statement. "All cases should be transferred to the Southern District of New York, which is in the best position to coordinate with the Bankruptcy Court's proceedings, has previously heard appeals from the Sale Order and Injunction, decided several contested matters relating to the asset sale and where several of the ignition switch actions filed to date are pending."

The panel's ruling called the venue "the most appropriate choice," citing the Southern District's handling of the bankruptcy proceedings of GM and Delphi, its parts supplier. Lawyers for various cases had argued aggressively for a number of locations, including Chicago, Texas and Southern California, where the litigation against Toyota over unintended acceleration was consolidated.

None of this legal wrangling involves the cases filed against the company over personal injury and wrongful death from the ignition switch flaw. GM is hoping to resolve those claims outside of the courts with a compensation system devised by Kenneth R. Feinberg, the attorney who has overseen victims' funds in a number of cases, including the 9/11 terrorist attacks, the BP oil rig explosion and the Boston Marathon bombings.