A Judge Just Put Hundreds of GM Ignition Lawsuits Back On the Books

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]