GM Seeks Court Protection Against Ignition Lawsuits
General Motors is arguing that it shouldn’t have to pay after faulty equipment triggered deadly crashes.
The company claims it’s not reliable because the problem started before the company went bankrupt.
General Motors Co said it will ask a U.S. bankruptcy court to bar plaintiffs from proceeding with lawsuits against the automaker for claims related to any actions before it filed for bankruptcy in 2009.
The plaintiffs have alleged that they bought or leased vehicles that contained an ignition switch defect.
The defect has been linked to the deaths of at least 13 people and resulted in the recall of 2.6 million GM vehicles.
In a filing with U.S. District Court for the Northern District of California, GM asked for a stay on litigation related to ignition claims until the court decides on a motion to consolidate the claims and the bankruptcy court rules on whether the claims violate GM's 2009 bankruptcy sale order.
GM said it would shortly file a motion in the Bankruptcy Court for the Southern District of New York to enforce an injunction contained in its sale order, which the company said bars plaintiffs from suing the reorganized company for any claims related to the predecessor company.
On Shepard Smith Reporting, Judge Andrew Napolitano said GM has a case.
“This was not your ordinary garden variety bankruptcy, and if it had been the new GM would be liable for the design defects and the faults of the old GM,” the judge said.
He explained that the court wiped out billions of dollars GM owed to lenders and it erased the ability of plaintiffs injured by the old GM to sue.
Now, the Obama administration has to decide whether it will get involved in this new case.
“The Constitution says where there’s a wrong, there’s a remedy. I injure you, you have a right to sue me. I cannot escape that and you cannot lose that right,” Judge Napolitano said, adding that GM wants to deny the injured and families of the deceased the right to sue.
While the judge hopes the court will reject this motion, he believes the “old versus new” argument will hold up.