Lawyers continue their efforts to get money for clients in GM recalls

U.S. District Court Judge Jesse M. Furman is trying to get settlements in lawsuits filed for about 1,000 plaintiffs against General Motors.

U.S. District Court Judge Jesse M. Furman is trying to get settlements in lawsuits filed for about 1,000 plaintiffs against General Motors in response to faulty ignition switches.

As he outlined his strategy this week, Furman said that he will avoid interfering with the case now before a bankruptcy judge, Robert Gerber, who is considering the role of economic damages. “I’m also going to be very sensitive about stepping on the toes of Judge Gerber and the bankruptcy proceedings,” Furman said. Furman was the judge selected to hear over 100 lawsuits that were sent to his New York courtroom.

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There are some 98 economic-loss and 11 personal-injury cases in the multi-district litigation, Richard Godfrey, a lawyer for GM, told Furman.

There are 983 plaintiffs. Out of the 109 lawsuits, a dozen relate to personal injuries and the rest are for economic losses, The Associated Press reported.

Meanwhile, Gerber may not rule until later this year about owners suing to get the lost value of recalled vehicles.  He was the same judge who handled GM’s bailout in 2009.

GM has recalled almost 29 million cars in North America for varied safety reasons, and when it comes to the ignition system defect, it was associated with the deaths of at least 13 people. Plaintiffs’ lawyers say the number of deaths is more than 60.

GM is setting aside $600 million to pay for claims related to injuries and deaths associated with the faulty ignition system. The company has set up a compensation plan to be administered by Attorney Kenneth Feinberg, InsideCounsel reported.

Yet, GM wants immunity from many other kinds of lawsuits in the bankruptcy proceeding.

Lawsuits that seek money for lower car prices were sent to Furman’s court. They will be combined into a single case, Bloomberg reported. It can proceed after Gerber says which claims are allowed.

In April, GM wanted Gerber to prevent customers from suing the “new GM” regarding defective cars made before the bankruptcy. That may mean customers will not be able to capture billions of dollars for punitive damages, and will not be able to receive money for economic losses.

If the customers are directed to file requests for money from “old GM,” they will find there is not a lot of money left there that can be tapped into.

Also, plaintiffs’ attorneys claim GM kept secret details on the ignition switch defect. GM had known about defective switches in small cars since at least 2001. Safety defects are supposed to be reported to the federal government five days after they are discovered. GM was required to pay a record $35 million fine because of its multi-year delays in disclosing the ignition switch defect.

In the case before Furman, the law firms which are seeking to be lead counsel are: Steve W. Berman of Hagens Berman Sobol Shapiro LLP in Seattle, Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein LLP in San Francisco, and Mark P. Robinson Jr. of Robinson Calcagnie Robinson Shapiro Davis Inc. in Newport Beach, Calif.

Contributing Author

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Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...

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