By on July 14, 2016

Chevrolet Cobalt Sedan

General Motors had hoped to put the issue behind it, but a judge’s ruling just opened the automaker up to billions in damages over its faulty ignition switch scandal.

Yesterday, the U.S. Appeals Court of Manhattan ruled that lawsuits filed against the automaker for accidents that happened before the company’s 2009 bankruptcy sale were still valid. The decision overruled an earlier court decision that protected GM from such suits.

Now, the automaker could face lawsuits not just from accident victims, but owners whose vehicles depreciated in value when the issue was discovered. Faulty ignition switches in past GM vehicles are linked to 124 deaths. Following a recall of affected models, the automaker paid out $2 billion in legal expenses.

In its ruling, the court claimed GM’s transition into a new company after the bankruptcy didn’t take away its past responsibility:

While the desire to move through bankruptcy as expeditiously as possible was laudable, Old GMʹs precarious situation and the need for speed did not obviate basic constitutional principles. Due process applies even in a company’s moment of crisis.

GM won two key legal challenges earlier this year, and it looked like the automaker was going to pull away from the issue. Yesterday’s ruling means up to 300 lawsuits are back on the books, leaving GM on the hook for up to $10 billion in damages.

Jim Cain, a GM spokesperson quoted by Bloomberg, said that despite the ruling, it’s still up to plaintiffs to prove themselves in court.

“There is no basis for plaintiffs to claim diminution in value because the majority of them did not experience a defect in their vehicle and because GM has provided recall repairs that eliminated the defect,” he said.

Many victims accuse GM of using the bankruptcy to side-step responsibility in the scandal. After a long wait, it now looks like they’ll get their day in court.

[Source: Bloomberg]

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14 Comments on “A Judge Just Put Hundreds of GM Ignition Lawsuits Back On the Books...”


  • avatar

    My favorite part about class action lawsuits is being able to get paid even if nothing happened to myself personally.

    The hard part is looking myself in the mirror after I’ve cashed the check.

  • avatar
    brettc

    So does this mean that GM and VW can be twinsies in the $10 billion stupid expense club?

    • 0 avatar
      Sid SB

      The way things were going, was thinking that cheating on emissions was worse than covering up an issue that allegedly led to traceable fatalities. Sounds like that may not the case much longer.

  • avatar
    SCE to AUX

    “There is no basis for plaintiffs to claim diminution in value because the majority of them did not experience a defect in their vehicle and because GM has provided recall repairs that eliminated the defect”

    I have owned a 71, 76, and 80 Pinto/Bobcat. Each was fitted with the plastic blast shield to prevent the differential pumpkin from spearing the gas tank and generating a spark in a rear-end collision.

    Just because I didn’t experience the consequences of the defect, doesn’t mean the value of my cars wasn’t diminished.

  • avatar
    Thatkat09

    I think GM will only have to worry about the lost value cases as they’ve been settling all the ignition cases out of court and making the plaintiffs sign waivers.

  • avatar
    cartunez

    Time to get rid of the ridiculously high dividend and pay up.

  • avatar
    Rday

    GM is an extremely and bad corporate citizen. They really need to pay for the consequences of their behavior. I am happy the court has ruled this way

  • avatar
    JK43123

    Only one word comes to mind: good.

  • avatar
    zip94513

    Good news. I was affected twice and I dumped my Chevrolet for a Toyota. Problem free ever since, and haven’t been back to GM.

  • avatar
    jpolicke

    Diminished resale value of Cobalts and Saturns? Because of the ignition switch? Those switches could have been hand-whittled out of 24k gold to reactor grade standards and the value of those cars would still have doubled with a full tank of gas.

    • 0 avatar
      big al

      Have an 07 Cobalt that looks remarkably similar to the pictured car:)….really been a good car for close to 180,000 miles(or close to 300,000 kms). Laugh if you want but for what they are,a basic people mover, they aren’t bad. The actual worst part and something I spent a lot of time and money and effort on is the headlights. They are just bloody nasty. Worst I’ve ever had on a vehicle in fact.

  • avatar
    jdmcomp

    Now if they will just apply this reasoning to the GM Bond holders that Obama screwed in the bankrupt hearings things would start to look sunny.

  • avatar
    raph

    I need to tell a buddy about this. He already won the lottery by being a passenger in my vehicle when a clown hit me head on. He was sore but got a nice check from my insurance company and after all the fees pit a,nicec15k in the bank for just riding along.

    No reason he shouldn’t win again since he has a Cobalt SS.

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