A recent decision by a federal
bankruptcy judge has cleared the way for consumer protection
attorneys to seek punitive damages against GM for deaths and injuries
caused by the company's ignition failure. GM claims its bankruptcy
should shield it from liability, but this judge's decision proves
manufacturers can't use bankruptcy to excuse their illegal actions.
When GM declared bankruptcy in 2009,
the company that emerged was called “New GM.” But an opinion from
federal bankruptcy Judge Robert Gerber, has shown that the New GM
still has to deal with the same old problems.
On Monday, November 9, 2015, Judge
Gerber ruled that consumers injured by GM's faulty ignition
switches could sue New GM for punitive damages. This was an exception
to the rule that a bankruptcy shields a person or company from
liabilities created before the bankruptcy was initiated.
GM has faced years of scrutiny and
legal challenges based on ignition switches that can slip out of
position and shut off the engine. When this happens, the car shuts
everything down, including power steering, brakes, and air bags. The
problem caused a wave of car crashes, killing
169 people and injuring hundreds more.
Earlier this year, GM faced claims
by the National Highway Traffic Safety Administration that the
company had known of the problem for over a decade before finally
initiating a recall in February 2014. NHTSA and GM settled
those claims in September, agreeing to pay $900 million in fines
and three years of federal monitoring to avoid criminal sanctions.
The federal agency's settlement did
nothing for the over 250 wrongful death and personal injury lawsuits
still pending as a result of the faulty ignition switches. While GM
was quick
to point out it had not assumed liability for “Old GM conduct
relating to Old GM vehicles,” the judge's ruling acknowledges the
reality that the same people had the same knowledge before and after
the bankruptcy and still the company did nothing.
Now lemon
lawyers like Dani K. Liblang at The Liblang Law Firm, P.C., can
present evidence that New GM employees had knowledge “inherited
from their tenure at Old GM or documents inherited from Old GM and
may be based on knowledge acquired after” the new company was
formed. If consumer protection attorneys can show that New GM
employees had access to knowledge of the defects and failed to act,
the company may still have to pay substantial punitive damages to
those injured by their silence.
GM's 2009 bankruptcy doesn't excuse
the company from failing to warn its consumers of a deadly defect in
its vehicles' ignition systems. This decision gives consumers access
to hold the company accountable for its behavior. If you or someone
you know has been injured because of a vehicle defect, contact
The Liblang Law Firm, P.C., today for a free consultation.
