General Motors Company (NYSE: GM) Faces Lawsuit Over Deaths

475

By Mark Michaels on July 30, 2014 Company, Consumer Staples

Yesterday on Tuesday, General Motors Company (NYSE: GM) was hit with a lawsuit. This lawsuit was brought on by over 650 people who claim that they were injured or killed in accidents resulting from vehicles that have improper ignition switches.

Filed in the Manhattan federal court. In the past, this court has consolidated countless of cases that were filed against the Detroit based car maker on the subject of recalling vehicles with the broken switch. The lawsuit currently has 658 plantifs in total, 29 of which are bringing the suit against GM on behalf of those who were killed.

Since the beginning of the year 2014, General Motors has recalled nearly 15 million vehicles all over the world due to the possibility of having installed them with faulty ignition switches. A program has been set up by the company and Kenneth Feinberg, the lawyer, to reimburse the individuals involved in crashes that resulted from the defective parts. Approximately 2.6 million cars were involved, mostly Ions, Cobalts, and other smaller vehicles that were connected to 54 crashes and 13 deaths.

According to the lawyer who filed the suit, Robert Hilliard, the lawsuit covers the claims that would not be eligible for the program that GM already has in place. These claims include accidents where the cars that were not recalled in the 2.6 million vehicles that were initially revoked for ignition switch problems and accidents where the vehicles’ airbags went off. Airbag non-deployment is a tell tale sign that the ignition switch on the vehicle was not working properly. These cases are all not covered by GM’s current program.

Jim Cain, a spokesperson for General Motors, refused to comment on the specific accusations that were brought against the company in the suit. Cain stated that Feinberg was the one responsible for determining the eligibility criteria for the program. GM had not set a ceiling on how much it would reimburse those who were eligible. Cain insisted that it is the company’s goal to treat everyone fairly and with compassion throughout the entire process.

The lawsuit also includes people who received from the program less than the fair value for their claims, such as a person who was injured and stayed for one night at the hospital. Under the terms of the program, claims where the victim stayed in the hospital for one night would be granted $20,000.

The accidents that were brought up in the lawsuit occurred after General Motors declared that it was no longer in a state of bankruptcy in July of 2009. The current General Motors is a different legal entity from the company that filed for bankruptcy. Thus through this technicality, the company is holds no responsibility for any legal claims regarding any incidents that occurred prior to July of 2009. Such claims must be filed against the old GM, and will be heard in a bankruptcy court.

The current case that GM is facing is called Abney v. GM, in the United States District Court for the Southern District of New York, Number 14-5810.