Hawaii Personal Injury Blog - Liability

Judge approves GM asset sale, clearing way for restructuring.

Wayne Parsons — Mon, 06 Jul 2009 14:29:29 GMT

On the front page of its business section the New York Times (7/6, B1, De La Merced) reports that US Bankruptcy Court Judge Robert E. Gerber "approved a plan by General Motors late on Sunday to sell its best assets to a new, government-backed company, a crucial step for the automaker to restructure and complete its trip through bankruptcy court." Gerber's decision "came after three days of hearings to address the 850 objections to the restructuring plan and after he had received a revised sale order from G.M.'s lawyers. In his 95-page opinion, Judge Gerber wrote that he agreed with G.M.'s main contention: that the asset sale was needed to preserve its business in the face of steep losses and government financing that is scheduled to run out by the end of the week."

The Wall Street Journal (7/6, B1, Spector) adds that Gerber's decision "removes a key hurdle to the auto maker's plan to exit bankruptcy." Gerber "rejected pleas from dissident bondholders and product-liability claimants who objected to GM's plans. The judge said the only alternative to GM's plans would be liquidation, 'a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates. In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing.' The ruling paves the way for GM's government-brokered restructuring, in which the auto maker will move its 'good' assets -- including automotive brands Chevrolet, Cadillac, Buick and GMC -- to a new company owned by the U.S. Treasury. The sale approval clears the way for GM to potentially exit bankruptcy in less than two months."

The Detroit News (7/6, Snell, Shepardson) reports that the move could result in a "stunningly swift emergence from Chapter 11 bankruptcy," noting that "once the sale closes, which is not expected before noon on Thursday, the 100-year-old automaker will be majority-owned by the U.S. Treasury Department. The government will have a 60.8 percent stake after providing more than $50 billion in financial aid to keep the iconic American company from liquidating and becoming perhaps the greatest industrial failure in the nation's history."

I have previously reported on objections to GM's plan by state attorney generals:

State AGs challenging GM's liability plan - by Wayne Parsons

The AP (7/6, Fowler) reports that "attorneys for some of GM's bondholders, consumer groups and individuals with lawsuits against the company argued in court for its rejection, saying that their needs were being pushed aside in favor of the interests of GM and the government. It was unclear early Monday if any of those groups planed to appeal Gerber's decision."

Bloomberg News (7/6, Scinta), MarketWatch (7/6), and Reuters (7/6, Chasan, Allen) also report on Gerber's ruling.

Originally posted at InjuryBoard by Wayne Parsons

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

Questions about automakers' liability loom during bankruptcy process.

Wayne Parsons — Thu, 04 Jun 2009 08:53:47 GMT

Bloomberg News (6/4, Andersen) reports, "Plaintiffs in personal-injury and product-liability lawsuits against Chrysler LLC and General Motors Corp. are pressing members of Congress to ensure that their cases will be heard in court or an alternate form of compensation is found." Now, "consumer groups are appealing a New York bankruptcy court's decision on Chrysler, saying it relieves the new company of responsibility for old losses." Clarence Ditlow, executive director of the Center for Auto Safety, said, "Either the bankruptcy system has to take care of victims or the Obama administration needs to come up with a victim's fund much as we did in 9/11." In addition, "plaintiffs' lawyers in the Chrysler case objected to the sale of the company's assets because 'they may suspect that there won't be any money left, even if they were to win their cases.'"

CNN's (6/3) Situation Room with Wolf Blitzer details some stories of plaintiffs injured by vehicles whose lawsuits have been put on hold due to the bankruptcy. The plaintiffs are looking for a fund to be established that will help pay the money they are due. In a segment on NPR's (6/3) All Things Considered, the story was also covered.

MSNBC (6/4, Weisbaum) contributes to the coverage with personal stories of people who will be affected by GM and Chrysler's bankruptcy. "There are other victims who are not as visible: the customers who were injured in defective vehicles made by these companies." Consumer groups are outraged because "when a company reorganizes under Chapter 11 protection, it can shed negative assets and break free of past obligations, such as lawsuits." In addition, at present, "all GM lemon law claims are on hold until the bankruptcy court decides how the company should handle them." Weisbaum says, "The Obama administration's Auto Task Force and the bankruptcy judges must prevent these companies from shirking their moral obligation."

ABC World News (6/3, story 5, 2:30, Gibson) reported that bankruptcy attorney Barry Bressler said, "The government seems to be pushing this through to streamline the procedure to the point where individual's rights may really be minimalized."

The Philadelphia Inquirer (6/2, Gelles) reported, "Once the restructured companies emerge, all the legal protections that consumers rely on, including their ability to enforce warranty claims by invoking state 'lemon laws,' will apply to cars or trucks that the 'new Chrysler' or the 'new GM' sell." The Obama administration said it would "stand behind both automakers' warranties." Even so, "consumers who buy a new Chrysler or General Motors vehicle today, or who bought vehicles before or since the companies filed for bankruptcy, may enjoy fewer protections and face some extra risks, according to consumer advocacy groups such as Consumers Union and the Center for Auto Safety." 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." The Washington Times (6/4, Prudy) also ran the story.

GM CEO wants tax payers to get "fantastic return on this investment." ABC News (6/1, Gomstyn, Jaffe, Herman) reported, "As the country's largest automaker works to emerge from its newly-declared bankruptcy, it will aim to make money for the U.S. taxpayer, General Motors CEO Fritz Henderson told ABC News today." He said, "I want them to get a fantastic return on this investment." He added, "It's our job to deliver that."

Creditor committee includes two plaintiffs. Bloomberg News (6/3, Larson) reported, "Bankrupt General Motors Corp.'s official committee of unsecured creditors includes the United Auto Workers union, owed $20.6 billion; Wilmington Trust Co., representing bondholders owed $22.8 billion; the Pension Benefit Guaranty Corp. and three GM dealerships." The committee was "selected today by U.S. Trustee Diana Adams" and includes "two lead plaintiffs from asbestos and product liability cases pending against the bankrupt automaker were also appointed to the committee."

Originally posted at InjuryBoard by Wayne Parsons

Judge dismisses Medtronic lawsuits, cites Supreme Court pre-emption case.

Wayne Parsons — Wed, 07 Jan 2009 13:47:34 GMT

The Wall Street Journal (1/7, A2, Burton) reports, "A federal judge threw out lawsuits on behalf of thousands of patients with heart-defibrillator wires that have been shown to fracture and dispatch potentially lethal shocks, concluding that a recent Supreme Court opinion made the dismissals inevitable" because that case said "that federal law 'pre-empts' product-liability lawsuits under state law, effectively precluding such cases." The judge said, "The Court recognizes that at least some plaintiffs have suffered injuries from using Sprint Fidelis leads, and the Court is not unsympathetic to their plight." He added, however, that "the plaintiffs' remedy 'lies with Congress.'" The Minneapolis Star Tribune (1/6, Moore) also covered the story.

Dow Jones (1/6) reported, "The decision comes less than a year after the US Supreme Court said federal medical-device regulations prevent patients from bringing state product-liability lawsuits unless a company violated FDA regulations, making it harder for individuals to sue medical-device companies over faults or failures of a device. That case was Riegel v. Medtronic."

The AP (1/7) reports, "In recent years, the Bush administration and business groups have aggressively pushed limits on lawsuits through the doctrine of pre-emption -- asserting that federal regulations take precedent over rules that differ from state to state." Soon, "the Supreme Court is expected to...rule on the issue as it relates to drugmakers in a case between Wyeth and a patient who lost her hand after receiving a botched injection of the company's anti-nausea medication."

Originally posted at InjuryBoard by Wayne Parsons

Drowning Hazard leads Aqua Lung America to Recall Apeks Scuba Diving Regulators

Wayne Parsons — Thu, 18 Sep 2008 17:53:49 GMT

In a voluntary recall of Aqua Lung Apek scuba diving regulators the manufacturer - Aqua Lung America – has warned consumers to stop using these devices because they pose a drowning hazard. The diaphragm cover on some regulators is missing and that can cause the diaphragm to become displaced during a dive and that allows water to enter the regulator.

This recall involves Apeks TX, ATX, and XTX second stage regulators that have never been serviced. Apeks and TX, ATX, or XTX is printed on the regulator. The devices were sold across the country from February 2007 through June 2008.

Consumers should stop using the devices and immediately take it in to an authorized Aqua Lung America APEKS dealer for inspection and repair. Aqua Lung can be contacted toll free at (877) 253-3483 or you can visit the company’s web site at www.aqualung.com

Originally posted at InjuryBoard by Wayne Parsons