General Motors argues it’s protected from lawsuits stemming from its ignition switch recall that predate its 2009 bankruptcy. The United States’ judicial process, though, isn’t working in GM’s favor.
The U.S. Supreme Court on Monday refused to hear GM’s appeal of a 2016 ruling from the 2nd U.S. Circuit Court of Appeals in New York that the automaker cannot block lawsuits related to faulty ignition switches, according to Reuters. GM claims suits predating its insolvency shouldn’t be allowed to proceed, but the 2nd Circuit Court ruled against the manufacturer because plaintiffs hadn’t been properly notified of the defective switches prior to it filing for bankruptcy.
In 2014, GM began recalling 2.6 million vehicles for the switches, which reportedly have been linked to 124 deaths and 275 injuries. The switches could slip out of place, causing the engines to stall, as well as cutting power to the brakes, steering and air bags. To date, GM has paid roughly $2.5 billion in penalties, settlements and legal fees related to the defect.
“Hundreds of death and injury cases have been frozen in place for years as GM wrongly tried to hide behind a fake bankruptcy,” Robert Hilliard, lead counsel for the plaintiffs, said in a statement, via Automotive News. “Now, GM can hide no more.”
Unsurprisingly, GM disagrees with the court’s decision.
“(The Supreme Court’s denial) was not a decision on the merits, and it’s likely that the issues we raised will have to be addressed in the future in other venues because the Second Circuit’s decision departed substantially from well-settled bankruptcy law,” GM spokesman Jim Cain said in a statement, via Automotive News.
A U.S. bankruptcy judge in 2015 ruled that GM could not be sued for its actions prior to filing for bankruptcy, according to Automotive News. The cases affected by the 2nd Circuit’s reversal of that decision could be worth up to $10 billion, according to court papers, via Automotive News.
Thumbnail photo via General Motors
