Product liability scenario continues to play out for General Motors

On Behalf of | May 4, 2017 | Business Litigation |

For obvious reasons, the largest car manufacturing company in the United States is doing everything it reasonably can to stay ahead of a potential tidal wave of litigation that is imminently heading its way and the attendant liability of massive proportions it could trigger.

Notwithstanding that effort, though, a recent national news report indicated that, “General Motors’ bid to block hundreds of lawsuits, potentially worth billions of dollars, over a deadly ignition-switch defect broke down [last] Monday.”

Many of our readers in Southern California and elsewhere across the state are likely nodding their heads in quick recollection of the ignition-related debacle, which put GM in materially dire straits.

And, by all indications, the company is far from out of the proverbial woods yet regarding the claims now staring it in the face.

GM has long contested those claims, centrally with an argument that the corporate bankruptcy it filed back in 2009 barred them. A bankruptcy judge agreed with that argument in 2015, when it ruled that all pre-bankruptcy complaints alleging product liability-related wrongful death and other serious injuries were effectively stopped by the bankruptcy filing.

The obvious sigh of relief collectively shared by company principals in the wake of that ruling was short lived, however, with a federal appeals court shortly thereafter reversing the bankruptcy court. The appellate tribunal held that it would work a violation of the U.S. Constitution if injured parties who had not received notice of the serious safety problems linked with faulty switches were thereafter denied the opportunity to bring claims. And, tellingly, none of those parties did receive timely notification.

That is where the matter seems to squarely sit presently, with the U.S. Supreme Court opting last week to not hear an appeal from GM on the subject.

As the above-cited CNBC article notes, GM will now likely have to go into an elevated defense mode to deal with a high number of claims that could potentially cost it as much as $10 billion.

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