GM settles 2 ‘bellwether’ faulty ignition switch cases

James David Dickson, and Karen Bouffard
DetroitNews

General Motors has settled two lawsuits related to its ignition switch issues, the company said Monday.

“We have an agreement to settle the last two federal bellwether cases scheduled for 2016,” said James Cain, a GM spokesman, in a statement. “The terms of the settlements will be confidential.”

The company’s decision to resolve the two cases for an undisclosed amount means the first phase of so-called “bellwether” cases has been completed, said Bob Hilliard, lead counsel for personal injury and death cases related to ignition switches.

One case was two weeks from jury selection; the other was set to begin Nov. 4. More are scheduled for 2017.

In 2014, GM recalled 2.6 million cars to replace defective ignition switches dating back a decade in some cases. At least 124 deaths have been linked to the defect. GM has established a fund to compensate victims and has settled many other cases, including the two most recent bellwether settlements.

Cain said the bellwether trials have been “extremely helpful because they are typical of other cases.”

“From our perspective, the bellwether trials in federal and Texas state court have been extremely helpful because they are typical of other cases,” Cain said. Juries “have carefully considered engineering and other evidence, not just the mistakes GM has already admitted, and they’re holding plaintiffs to their burden of proof.”

The multidistrict lawsuits are considered significant because they were deemed by either the plaintiff or the defense to be a bellwether for other cases, which would give lawyers on both sides some parameters for settlement talks.

Out of eight considered bellwether cases by GM, the automaker has not lost any. Of the two cases that were filed in a the Texas state court, GM won one case, and the other was dismissed after GM filed a motion for summary judgment, which was granted by the court.

Of six federal court cases, GM has won one and three were settled out of court, including the two announced Monday. Two of the federal cases were voluntarily dismissed by the plaintiffs, one before going to trial, and the other during trial after allegations of fraud arose.

Carl Tobias, Williams Chair of Law at the University of Richmond School of Law, said the so-called bellwether cases really aren’t representative examples of the thousands of lawsuits brought over the ignition defects, and that means it could take longer to resolve all of the cases.

“GM is settling the cases that are more difficult for them to win and trying the ones that are weaker, easier to win,” Tobias said Monday. “The whole point (of bellwether cases) is to get representative cases and get them tried.

“When you settle the cases that are more difficult that avoids adverse publicity and that’s good for the company obviously. They can do whatever they want. (But) it’s harder to reach final settlements on the large number of cases when the bellwether turn out to not be representative.”

A trail of cases

In August, a Texas jury decided that GM’s ignition switches weren’t to blame for a 2011 fatal crash.

The company has paid nearly $875 million to settle death and injury claims. But many others are pursuing their claims in court.

According to Bloomberg last month, the flawed switches, “if jostled, can unexpectedly shift into the off position. Once power is switched off, vehicle safety systems — such as power steering, power brakes, air bags and seat belt pretensioners — no longer function as designed.”

In July, the U.S. Appeals Court in Manhattan ruled that GM’s 2009 bankruptcy did not bar those whose cars were built before then from bringing legal action. The company hoped they would be barred, as that group represented hundreds of the lawsuits the company is facing.

“While the desire to move through bankruptcy as expeditiously as possible was laudable, Old GM’s precarious situation and the need for speed did not obviate basic constitutional principles,” the court said at the time. “Due process applies even in a company’s moment of crisis.”

Hilliard’s statement, released Monday, referenced the July decision.

“Our pre-bankruptcy clients were given hope by the 2nd Circuit’s refusing to allow GM to hide behind its bankruptcy filing,” he said in a statement. “We are hopeful GM’s appeals of that decision will be unsuccessful and a discussion of the resolution of that docket of cases can begin shortly.”

jdickson@detroitnews.com