Hawaii Personal Injury Blog - General Motors

GM agrees to take responsibility for future liability claims.

Wayne Parsons — Mon, 29 Jun 2009 14:57:10 GMT

The AP (6/28, Fowler) reported General Motors "has agreed to take on responsibility for future product liability claims, removing what could have been a sizable roadblock" on the company's way to a "quick sale of its assets" and emergence from bankruptcy. GM "wants to sell the bulk of its assets to a new company and leave behind unprofitable assets and other liabilities such as product-related lawsuits." But in a "concession to consumer groups and state officials who had threatened to block the sale because of product liability concerns, the new company will now assume responsibility for future claims involving vehicles made by the old company."

The Wall Street Journal (6/29, A4, Spector) reports that the agreement "represents a partial victory for more than a dozen state attorneys general and several consumer-advocacy groups."

The Washington Post (6/29, Tse, Marr) reports, "Those with past claims would have to pursue the GM left behind in bankruptcy with nothing but unwanted assets, debts and other liabilities. That means these consumers are likely to recover little, if anything." On Friday "Rep. André Carson (D-Ind.) introduced legislation that would require automakers to purchase liability insurance if they are owned by the federal government or have federal loans. This insurance must protect against past and future claims, even after a bankruptcy filing." Bloomberg News (6/28, Lui) also covered the story.

The New York Times (6/28, A20, De La Merced) reported GM and the Obama Administration's auto task force "have been negotiating with more than a dozen state attorneys general who have objected" to GM's asset sales plan.

The Washington Post (6/27, Dennis, Tse, Marr) reported earlier on the talks leading to the agreement.

Originally posted at InjuryBoard by Wayne Parsons

Treasury negotiating on GM's product liability.

Wayne Parsons — Fri, 26 Jun 2009 14:26:01 GMT

The Wall Street Journal (6/26, B1, Spector, McCracken) reports on the front page of its Marketplace section, "The U.S. Treasury Department is negotiating with more than a dozen state attorneys general to roll back two key features of General Motors Corp.'s bankruptcy plan that would have wiped out billions of dollars in potential claims from car-accident victims and closed auto dealers." Under the current reorganization plan, "hundreds of car-accident victims have lawsuits against GM in various stages of the legal process that would be effectively washed away." In opposing GM's product-liability plan, "state attorneys general are raising a number of complex legal issues, ranging from the power of federal bankruptcy courts to supercede state law to constitutional due-process rights of Americans to sue GM if they're injured by the auto maker's vehicles in the months and years ahead."

In an informative analysis of the impact of this bailout on people injured in defective automobiles Cecelia Prewett of the American Association of Justice (AAJ) sheds light on this judicial and Congressional problem:

Protecting Consumers in Wake of Chrysler / GM Bankruptcy

GM wins financing, "tort czar" denied. The Detroit Free Press (6/25, Hyde) reported, "General Motors won approval Thursday to use up to $33.3 billion to pay for its bankruptcy, after making a few changes to settle technical objections." US Bankruptcy Court Judge Robert Gerber also "denied a request from an unofficial committee of people with asbestos-related claims against GM to appoint a 'tort czar' that would oversee all future claims against the old GM, not just those related to asbestos."

The Detroit News (6/26, Gardiner) reports that consumer victims and asbestos claimants "withdrew petitions for their own independent bargaining committees on Thursday."

Comcast pulls liability ads. The Washington Post (6/26, Marr, Tse) reports, "Comcast pulled a cable television advertisement criticizing General Motors' bankruptcy plan earlier this week after the automaker challenged the spot's claims. The ad was paid for by a group of people injured in GM and Chrysler vehicles, who say the taxpayer-funded restructurings should not allow the automakers to escape liability claims for injuries or deaths that occurred before the bankruptcy filings."

Originally posted at InjuryBoard by Wayne Parsons

State AGs challenging GM's liability plan.

Wayne Parsons — Mon, 22 Jun 2009 15:49:11 GMT

The Wall Street Journal (6/22, A4, Spector) reports, "Eight state attorneys general are opposing a provision in General Motors Corp.'s bankruptcy plan that would free the auto maker from liability for vehicle defects. Attorneys general from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont filed an objection in U.S. Bankruptcy Court in the Southern District of New York Friday, arguing that GM's plan to shed these liabilities would bar accident victims from 'key legal rights.'" The states "could face an uphill battle" as "legal precedent shows that most companies have wide latitude to leave claims behind in bankruptcy court."

McClatchy (6/21, Gelles) reported on the impact of GM and Chrysler's bankruptcies on consumer protections. Clarence Ditlow, executive director of the Center for Auto Safety said, "The immediate impact on the consumer is that if you have a pending product-liability lawsuit, or if you're in a crash tomorrow that gives rise to a product-liability lawsuit, your claim is extinguished; you're not going to recover. Ditlow said the Chrysler deal also could undermine provisions, such as double or triple damages, that made some states' lemon laws more effective." McClatchy notes, though, that "some lemon-law lawyers, such as Robert Silverman of Kimmel & Silverman, said Chrysler customers scored a victory because the final deal with Fiat requires the new company to honor warranty and lemon-law claims for Chrysler products made in the last five years."

The Washington Post (6/19, Marr) reported, "Lawyers are scrambling to file paperwork today to oppose the sale of GM's assets. Christine Spagnoli, president of Consumer Attorneys of California, said the automakers' pledge to guarantee warranties, parts and maintenance is misleading to customers." Spagnoli explained, "They're saying, 'If your brakes are bad, we'll fix them. But if you crash and get hurt because your brakes are bad, we don't want to be accountable for that.'"

The Detroit News (6/22, Guthrie) reports, "John Pottow, a University of Michigan law professor and bankruptcy expert, was returning Thursday from a conference in New York, where he said General Motors lawyers gave him the impression they are still considering how to proceed." Said Pottow, "What's fascinating about this is that it is the government taking the hard line here, insisting that the new company should emerge free of those liabilities. It's the government actually thinking like hardheaded investors instead of taking the more predictable, more socialist line." Critics "are lobbying to establish government-supported victims' compensation funds." One expert noted, "There is a lot of discussion in Washington about compensation funds, which happens frequently in cases like this. ... When you have products that have and will continue to kill people, there are funds set up for victims."

Originally posted at InjuryBoard by Wayne Parsons

Consumer groups, trial attorneys criticize GM, Chrysler bankruptcy plans.(2)

Wayne Parsons — Wed, 03 Jun 2009 08:08:52 GMT

The Hill (6/3, Swanson) reports, "Consumer groups and trial lawyers are crying foul over the Obama administration's bankruptcy plans for General Motors and Chrysler" because "those plans would extinguish all ongoing auto accident claims that blame a death or serious injury on a defective GM or Chrysler vehicle." According to Clarence Dilow, executive director of the Center for Auto Safety, "the plans are unusual in that they would prevent anyone from bringing a future liability claim against GM or Chrysler if a car already purchased from either company is defective and results in an accident causing death or serious injury." Also, he added, "it was...unusual for no money to be set aside for liability claims."

On the Wheels blog on the New York Times website (6/3) Christopher Jensen writes, "In approving the sale of most of Chrysler's assets to a new company, run by Fiat, over the weekend, Judge Arthur J. Gonzalez also granted the automaker's request that the new company not be held liable for future product-liability problems involving current owners" which "means people who own a Chrysler, Dodge or Jeep have lost their right to sue if they are injured by a safety defect." He says that consumer groups are concerned that "people who already have been injured in accidents and have filed suits against Chrysler, asserting that a vehicle had a safety defect" will not get any money from the carmaker even if they "win in court."

ClickonDetroit (6/3) also covers the story and reports, "It's like slamming the courthouse door in the victim's face." Consumer groups want the "new Chrysler" to "at least create a victim's fund."

Originally posted at InjuryBoard by Wayne Parsons

Consumer groups, trial attorneys criticize GM, Chrysler bankruptcy plans.

Wayne Parsons — Wed, 03 Jun 2009 08:08:45 GMT

ClickonDetroit (6/3) also covers the story and reports, "It's like slamming the courthouse door in the victim's face." Consumer groups want the "new Chrysler" to "at least create a victim's fund."

Originally posted at InjuryBoard by Wayne Parsons