Plaintiffs in GM Ignition Switch Lawsuit See Major Victory as Appeals Court Reverses GM Bankruptcy Protection

07/13/2016

Court rules that General Motors is not shielded from some claims predating 2009 bankruptcy

NEW YORK – The U.S. Second Circuit Court of Appeals in Manhattan today ruled that General Motors (NYSE: GM) must face certain claims relating to cars made before its 2009 bankruptcy, according to Hagens Berman.

The ruling is a major victory for a class of millions of owners of GM-branded vehicles in the ignition switch multi-district litigation, claiming that the automaker’s series of recalls and cover-ups irrevocably damaged GM’s brand and led to significant loss of vehicle value.

More specifically, the court ruled that so-called “independent claims” relating to “New” GM’s own post-bankruptcy wrongful conduct, including claims involving misrepresentations by New GM as to the safety of “Old” GM cars, are not barred by the bankruptcy order discharging other claims in the case.

The court also ruled that the bankruptcy order did not bar economic loss claims based on the ignition switch and other defects, finding that Old GM knew about moving stalls and airbag non-deployments resulting from the ignition switch defect and should have revealed those facts in bankruptcy and provided notice of those claims to affected vehicle owners.

“The appeals court’s ruling today solidifies something that we have known from the very beginning of this suit—GM’s bankruptcy filing was a calculated move in its effort to conceal and cover-up its actions,” said Steve Berman, managing partner of Hagens Berman and co-lead counsel representing GM vehicle owners in the suit.  “We are pleased with the court’s decision and recognition that claims brought by millions of GM owners are not subject to GM’s bankruptcy protection and can move forward.”

Hagens Berman was appointed co-lead counsel representing owners of GM vehicles in the series of ignition switch bellwether trials stemming from a barrage of safety defects and bungled recalls from GM that irrevocably damaged GM’s brand, according to the firm.

In April 2014, the firm first filed an objection to a motion from GM to permanently enjoin plaintiffs from asserting claims against New GM, based on the court-approved bankruptcy sale of assets from Old GM to New GM, stating that during this bankruptcy filing, the entities of Old GM and New GM, “actively expanded their long-running cover-up of the ignition switch defect to commit fraud on the Bankruptcy Court by failing to disclose these matters.”

One of the safety defects involves the car’s ignition, which according to consumers, can switch off while in operation, disabling airbags and other electrical and safety features such as power steering and power brakes.  According to published reports and government documents, GM had knowledge of the serious defect as early as 2001, but critics charge that the company ignored warnings of the defect’s severity and did not warn consumers.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in 10 cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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09/12/18: GM Case Advances

Today, U.S. District Judge Jesse Furman of the Southern District of New York issued an extensive 108-page order allowing claims to move forward for GM owners. The ruling found that manifestation of the defect is not required in order to bring statutory consumer protection, common-law fraud, and implied warranty claims, and addressed the application of prior motion to dismiss opinions on the issues of unjust enrichment and incidental damages.

“We believe that the opinion will be helpful to plaintiffs’ efforts to certify classes and, ultimately, to prevail on the merits. This is a big win for the plaintiffs, as GM told the court this issue would be critical for either side and the ruling is squarely in plaintiffs’ favor.” — Steve W. Berman

Read the court’s opinion and order »

07/23/18: Case Update

On July 20, 2018, Hagens Berman filed a motion to certify bellwether classes in California, Missouri, and Texas. The motion asks the Court to recognize that GM economically harmed the owners of certain GM-brand vehicles affected by safety defects, including ignition switch, power steering, and airbag defects. Even though the class action alleges GM’s misconduct harmed vehicle owners nationwide, this class certification motion includes just three bellwether states to start. The bellwether process aims to resolve class certification for a smaller sample of states, and then apply these outcomes to the remaining states to minimize further litigation.
 

01/18/18: Statement from Steve W. Berman

Statement from Steve W. Berman regarding the U.S. Bankruptcy Court's Memorandum Opinion and Order, Signed on 1/18/2018, Regarding Motion to Enforce the Settlement Agreement by and Among the Signatory Plaintiffs and the GUC Trust:

"We are of course disappointed in the result but are thankful that the Court reviewed the issue so carefully and is committed to quickly resolving late claims motions.  All parties will have to assess next steps, including whether Wilmington Trust should be removed as trustee given the Court’s unequivocal findings that Wilmington Trust acted in bad faith."

— Steve W. Berman, managing partner of Hagens Berman
representing plaintiffs against GM

 

Read the court's order »

12/19/17: Case Update

Hagens Berman's Steve Berman in Court Fighting GM's Attempt to Kill $1B Ignition Switch Claims Settlement

Read more at Law360 (paywall) »

08/17/17: Statement from Steve W. Berman

“As the documents we filed demonstrate, all parties confirmed we had a deal and authorized us to share that deal with GM. GM then interfered with that deal, and we intend to take appropriate action against GM and possibly those who assisted GM in causing the GUC Trust to breach the contract. In addition, the GUC Trust is a fiduciary to all creditors, including our clients in this case who were denied due process by GM's concealment. The GUC Trust should be acting to protect claimants and not GM.”

— Steve W. Berman, managing partner of Hagens Berman
representing plaintiffs against GM

Read the filed letter from plaintiffs' attorneys »

04/24/17: Supreme Court rejects GM bid to block ignition switch suits

On Apr. 24, 2017, the Supreme Court refused to hear GM’s appeal regarding the pending lawsuits concerning the deadly ignition-switch defect linked to 124 deaths and 275 injuries. The automaker had claimed the lawsuits brought regarding the defect were barred by its 2009 bankruptcy. The court’s decision allows the cases to continue for plaintiffs represented by Hagens Berman.

09/15/16: Fourth Amended Complaint

09/15/16 Hagens Berman files fourth amended complaint against General Motors on behalf of hundreds of owners. Download Complaint »

07/13/16: Major Victory: Appeals Court Reverses GM Bankruptcy Protection

The U.S. Second Circuit Court of Appeals in Manhattan ruled that General Motors (NYSE: GM) must face certain claims relating to cars made before its 2009 bankruptcy.

The ruling is a major victory for a class of millions of owners of GM-branded vehicles in the ignition switch multi-district litigation, claiming that the automaker’s series of recalls and cover-ups irrevocably damaged GM’s brand and led to significant loss of vehicle value. read more »

02/10/16: Cooper Motion Denied

"We are gratified that the court found Mr. Cooper’s allegations to be without merit. The court’s ruling allows the Hagens Berman legal team to return to focusing on the cases we are leading against GM." —Steve W. Berman, Managing Partner Download Order »   Read Release »

01/15/15: Steve Berman Responds to Valukas Report:

Regarding GM's internal report from investigator Anton Valukas, Steve Berman responded, "We are disappointed, but at least we get the identification of the witnesses he interviewed who weren’t disclosed. I can also say that after we have been looking at the documents we will show that the Valukas report is flawed and is a serious misstatement of who knew what about the ignition switch defect at GM.”