The owners of General Motors cars which they say have lost value as a result of a faulty ignition switch are arguing that it’s wrong for the automaker to shield themselves with bankruptcy laws, Automotive News reports. The complainants are looking to be reimbursed for lost value of their cars, however Judge Gerber ruled during bankruptcy proceedings in 2009 that “New GM” is not responsible for wrongdoings committed by “Old GM.”
The vehicle owners say GM knew the cars were defective and allowed them to be left and the market and sold anyways. Because the owners allegedly purchased the cars when GM knew they were faulty, they are looking to be reimbursed for the value of the cars. Gerber ruled GM was free from responsibility of the cars made by the old company, which was disbanded following its 2009 bankruptcy. The ruling may protect GM from multiple class action lawsuits.
“Think how extreme it is,” Steve Berman, a lawyer in the class action, told AN. “New GM sells a car in, let’s say 2011, with a known bad part. Even if made by old GM, it’s new GM lying to consumers at this point, and we don’t believe they can take refuge behind the bankruptcy.”
Judge Gerber said he will set a hearing date for late January in regards to whether or not the plaintiffs are allowed to sue GM, but it could take more than a month to reach a decision. GM argues the cars have not lost value and that it is not responsible for pre-2009 cars sold after 2009. Many of the plaintiffs believe it’s GM’s fault the faulty models were sold by dealers or third-parties after 2009, Gerber said.
In total, about 130 lawsuits pertaining to lost value of cars have been combined into two class action cases in Manhattan federal court. If Gerber decides plaintiffs have the legal right to sue GM, the cases will be held by U.S. District Judge Jesse Furman. AN says a smaller case is for cars bought before the bankruptcy, while a larger $10 billion suit is for vehicles purchase post-2009.
Comments
Typical Americans, always trying to get rich by suing someone. Little secret guys, it’s the lawyers that will get rich, not you.
While Mike is partially correct about people suing to make money, it isn’t typical Americans who like to do this. Typical Americans like myself are hard-working individuals and we don’t need to sue in order to make good.
It is a typical person contacted and convinced by a lawyer that they can get them a pile of money knowing GM will settle even if they have a weak case to avoid high legal defense cost.
In the end the person gets a small amount after fees and taxes. GM pays out a ton of money the rest of us pay for in higher car prices and then the lawyers walk away with the largest amount.
It is sad where a legal reprehensive can basically pull legal black mail on corporations.
These lawyers are not saints and they are not doing it for good will. Also the lawyer on the class action cases are just extortionist and they cost each one of us a ton of money yearly.
It is time for tort reform but find a politician that would support that is like finding a needle in a hay stack. So many in Washington made their money this same way.
I am ok if someone has done wrong and has a strong case but too often most are weak cases at best and they are all there just to settle.
“It is sad where a legal reprehensive can basically pull legal black mail on corporations”
I know what you meant, (representative), but I REALLY like the turn of phrase of “Legal Reprensive”. Kinda says it all.