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

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 Follow the firm for updates and news at @ClassActionLaw.

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