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GM isn't liable for punitive damages in ignition switch cases

NEW YORK — A federal appeals court said General Motors is not liable for punitive damages over accidents that occurred after its 2009 bankruptcy and involved vehicles it produced earlier, including vehicles with faulty ignition switches. The 2nd U.S. Circuit Court of Appeals in Manhattan said on Tuesday that the automaker did not agree to contractually assume liability for punitive damages as part of its federally-backed Chapter 11 reorganization. GM filed for bankruptcy in June 2009, and its best assets were transferred to a new Detroit-based company with the same name. The other assets and many liabilities stayed with "Old GM," which is also known as Motors Liquidation Co. Tuesday's 3-0 decision may help GM reduce its ultimate exposure in nationwide litigation over defective ignition switches in several Chevrolet, Pontiac and Saturn models. It is also a defeat for drivers involved in post-bankruptcy accidents, including those who collided with older GM vehicles driven by others, as well as their law firms. The ignition switch defect could cause engine stalls and keep airbags from deploying, and has been linked to 124 deaths. A lawyer for the drivers and their law firms did not immediately respond to requests for comment. GM had no comment. Circuit Judge Dennis Jacobs said GM's agreement to acquire assets "free and clear" of most liabilities excused it from punitive damages claims for Old GM's conduct. He also noted that the judge who oversaw the bankruptcy concluded that the new company could not be liable for claims that the "deeply insolvent" Old GM would never have paid. The decision upheld a May 2018 ruling by U.S. District Judge Jesse Furman in Manhattan, who oversees the ignition switch litigation. Drivers have sought a variety of damages in that litigation, including for declining resale values. GM has recalled more than 2.6 million vehicles since 2014 over ignition switch problems. It has also paid more than $2.6 billion in related penalties and settlements, including $900 million to settle a U.S. Department of Justice criminal case. The case is In re: Motors Liquidation Co, 2nd U.S. Circuit Court of Appeals, No. 18-1940. Government/Legal Chevrolet Pontiac Saturn Safety gm ignition switch

GM ignition switch trial cleared to begin on January 11

US District Judge Jesse Furman didn't accept General Motor's attempt to dismiss a civil trial over the automaker's faulty ignition switches, and set a January 11 start date for the case to begin, according to Reuters. The judge found that plaintiff Robert Scheuer had the evidence to proceed with the case. Scheuer was injured in an accident in his 2003 Saturn Ion in 2014 when another vehicle forced him off the road, and he crashed into some trees. The airbag didn't deploy, and Scheuer alleged this was the result of the faulty ignition switch. According to Reuters, Scheuer's trial is one of six bellwether cases over GM's ignition switch problem in the coming year. Juries' decisions in these lawsuits should provide an example of how similar trials could end, and these results would help The General decide whether to settle other pending cases or to keep fighting them. The ignition switch fiasco has already cost GM billions. For example, the company's compensation program offered $594.5 million in 399 cases of people killed or injured by the defective parts. Anyone that accepted this money agreed not to sue GM for the problem later. The company also came to a $900 million criminal settlement with the US government and paid $575 million in civil resolutions in September.

Recalled Saturn Ion facing separate federal safety probe

General Motors may be staring down another recall campaign for one of its models already embroiled in its high-profile ignition recall. The 2003-2007 Saturn Ion is already among the 1.6-million vehicles being recalled for faulty ignition switches, and now new light is being shed on a National Highway Traffic Safety Administration investigation over 2004-2007 models centering on a loss of power steering.
The government safety regulator has received 846 complaints about the problem and claims that GM has had 3,489 reports of failure. Of those cases, there have been 16 accidents and 2 injuries reported, according to Automotive News. While NHTSA has been conducting an investigation since September 2011, no recall has been issued yet.
The inquiry's length was brought to light by an organization called the National Legal and Policy Center that alleges GM and NHTSA have known about the problem but are delaying a recall. It has sent a letter to CEO Mary Barra asking "to recall Saturn Ions for the model years 2004 through 2007 without further delay." The letter in question is available in full on the group's website.