Court Finds GM Not Liable for Punitive Damages In Ignition Cases

court finds gm not liable for punitive damages in ignition cases

The 2nd U.S. Circuit Court of Appeals in Manhattan has decided to give General Motors a pass on the punitive damages associated with its faulty ignition switches. If you don’t recall the issue, it’s hardly your fault. The cars were manufactured prior to GM’s 2009 bankruptcy declaration and encompassed models from brands that no longer exist.

That timing was everything, too. Apparently the affected Saturn, Pontiac, and Chevrolet vehicles are part of the “Old GM” that died during the Great Recession. Most of the automaker’s former assets and liabilities were transferred to the “ Motors Liquidation Company,” so that the General could be reborn fresh and untainted, like a baby phoenix.

According to Reuters, Circuit Judge Dennis Jacobs explained GM’s agreement to acquire assets “free and clear” of most liabilities technically excused it from any punitive damages stemming from Old GM’s conduct. On top of the government bailout, that’s a pretty sweet deal. However, one could also argue that the brutal financial position the manufacturer found itself in ahead of the recession wouldn’t have allowed it to pay out anyway. Jacobs certainly did.

From Reuters:

Tuesday’s 3-0 decision may help GM reduce its ultimate exposure in nationwide litigation over defective ignition switches in several Chevrolet, Pontiac and Saturn models.

It is also a defeat for drivers involved in post-bankruptcy accidents, including those who collided with older GM vehicles driven by others, as well as their law firms.

The ignition switch defect could cause engine stalls and keep airbags from deploying, and has been linked to 124 deaths.

Injuries are presumed to be closer to 300. Thus far, the company has recalled more than 2.6 million vehicles since callbacks began in 2014. Claims exist that GM was well aware of the issue going back all the way to 2004; many blame the entire issue on the firm knowingly taking risks by using cheaper parts that could render its vehicles unsafe.

However, General Motors has already shelled out more than $2.6 billion in penalties and settlements stemming from the ignition switches — including $900 million to settle its criminal case with the Justice Department (with oversight conditions). It didn’t exactly get away scott-free.

[Image: Michael Urmann/Shutterstock]

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  • KingShango KingShango on Nov 22, 2019

    The recalls were issued in 2014 by "New GM" so they are both responsible and somehow also are not responsible?

  • Jkross22 Jkross22 on Nov 22, 2019

    I appreciate being reminded of what GM did and their continued efforts to avoid accountability. No company is perfect, but GM's unethical behavior and negligence is VW like.

  • Buickman how about LowIQ?
  • Gemcitytm Corey: As a native SW Ohioan, Powel Crosley, Jr. has always been an object of fascination for me. While you're correct that he wanted most of all to build cars, the story of the company he created with his brother Lewis, The Crosley Corporation, is totally fascinating. In the early 20's, Crosley was the nation's leading manufacturer of radio receivers. In the 1930's, working from an idea brought to him by one of his engineers, Crosley pioneered the first refrigerator with shelves in the door (called, of course, the "Shelvador"). He was the first to sell modular steel kitchen cabinets (made for him by Auburn in Connersville). He brought out the "IcyBall" which was a non-electric refrigerator. He also pioneered in radio broadcasting with WLW Radio in Cincinnati (wags said the calls stood for either "Whole Lotta Watts" or "World's Lowest Wages"). WLW was one of the first 50,000 watt AM stations and in 1934, began transmitting with 500,000 watts - the most powerful station in the world, which Mr. Crosley dubbed "The Nation's Station". Crosley was early into TV as well. The reason the Crosley operation died was because Mr. Crosley sold the company in 1945 to the AVCO Corporation, which had no idea how to market consumer goods. Crosley radios and TVs were always built "to a price" and the price was low. But AVCO made the products too cheaply and their styling was a bit off the wall in some cases. The major parts of the Crosley empire died in 1957 when AVCO pulled the plug. For the full story of Crosley, read "Crosley: Two Brothers and a Business Empire That Transformed the Nation" by Rutsy McClure (a grandson of Lewis Crosley), David Stern and Michael A. Banks, Cincinnati: Clerisy Press, ISBN-13: 978-1-57860-291-9.
  • AndyinMA Well, will they actually make any? Wranglers appear to be black only at this point, but I do admit to seeing a few Gladiators in other colors. A few.
  • Garrett The only way to send a message is to pull out of the transaction when the fee is disclosed unless the dealer pays for it...or just walk out regardless.If this happens enough, eventually someone will get the message.
  • Sgeffe I pay for the Remote and Security HondaLink stuff (remote functions from a phone app; accident notification, etc.), at roughly $200/yr. That’s value-added stuff. (A nice addition is that I can enable the crash-notification on ANY Honda vehicle to which I pair my phone if I wish, as long as the vehicle supports it.) I can cancel this stuff at any time, though! It looks like you CAN’T with Mary’s Folly!Typical GM! 🙄
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