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GM Will Not Escape Pre-Bankruptcy Ignition Switch Lawsuits

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General Motors (GM) went through bankruptcy in 2009. Their infamous ignition switch problem affected some vehicles made before that date, but GM didn’t feel they should be liable for claims brought by plaintiffs who owned vehicles made prior to the bankruptcy.

The company filed an appeal to block these lawsuits from continuing, but the U.S. Supreme Court recently refused to hear it. Now those lawsuits will be allowed to move forward in various courts across the country.

The ignition switch defect has been linked to at least 124 deaths and over 200 injuries.

Supreme Court Refuses to Hear GM Appeal

According to CNBC, the Supreme Court declined to review a previous ruling that stated GM was liable for claims made prior to its bankruptcy in 2009. GM had argued that their bankruptcy sale cleared them of former liabilities. The company also noted that it already made payments to more than 100 of these pre-bankruptcy claimants through its compensation fund, which paid out nearly $600 million to individuals and their families.

A federal appeals court ruled last year that GM could not escape pre-bankruptcy claims, and the Supreme Court recently refused to examine the case. The reasoning: Plaintiffs were not informed of the defect prior to the bankruptcy filing, and were therefore, unable to take action to recover damages until after the bankruptcy took place.

The Supreme Court’s ruling means that a number of claims that have been held in limbo may now move forward. The claims are likely to include those related to personal injuries and wrongful death, as well as to the diminished value of GM vehicles affected by the ignition switch recalls.

Plaintiffs Claims So Far Unheard on Older GM Vehicles

At the center of this issue are the Chevrolet Cobalts and Saturn Ions made in 2002 and 2003. It is in these pre-bankruptcy vehicles that the ignition switch problem first started to show up. In some cases, the ignition switch could turn off without warning, robbing the brakes, steering, and airbags of power. If this occurred during an accident, the airbags would likely not deploy, increasing the risk of serious injury and even death for the driver and other occupants.

In 2015, a U.S. bankruptcy judge ruled that GM was not liable for actions filed on vehicles made prior to 2009. That ruling was later reversed in the 2nd Circuit, and now that ruling will remain after the Supreme Court refused to hear GM’s appeal.

GM was allegedly aware of the defect for over a decade before they finally started to take any sort of meaningful action. As a result of the federal investigation and a number of lawsuits, GM had to pay $2 billion in criminal and civil penalties and settlements. They started recalling vehicles at risk for the ignition switch defect in 2014 and recalled about 2.6 million vehicles total in the U.S.