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GM Settles Claims with States Over Ignition Switches

Wednesday, January 03, 2018By Richard Alexander

The fallout from defective ignition switches in General Motors (GM) cars shows no signs of slowing down. First, GM experienced a significant setback when the U.S. Supreme Court ruled that the company’s bankruptcy would not shield it from hundreds of lawsuits brought by the victims of defective ignitions switches. The defect claimed the lives of at least 124 people and was responsible for over 275 injuries. With the Court’s decision exposing GM to liability, the embattled car manufacturer settled claims filed by 49 states and the District of Columbia in October for $120 million. But this is just one part of the legal battles ahead.

GM Charged with Knowledge of Ignition Switch Defect

The allegations made by the states in the lawsuit are clear and damaging: GM and General Motors Corporation employees knew about the defective ignition switch as early as 2004 and tried to conceal the defect. The defect was found in ignition switches in several models of small GM cars, including Chevrolet Cobalt and Saturn Ion. The ignition was found to switch off while the car was running. This caused a lack of power to the car and thereby disabled the power steering and power braking. The faulty switch also prevented air bags from deploying in crashes. But the recall did not begin until February, 2014, resulting in hundreds of death and injuries. At the time, GM determined that this was not a safety concern and postponed recalls of these vehicles. The states allege that theses deceptive practices violated state consumer protection laws. New York Attorney General Eric Schneiderman charged GM with turning a blind eye for years and even hiding the defective ignition switches from regulators.

What are GM’s Obligations Under the Settlement?

Aside from imposing financial liabilities, the settlement also makes a few demands on GM. Dealers cannot claim a car is safe unless it satisfies federal motor vehicle safety standards. GM dealers also cannot refer to a used car as “safe” or “subject to rigorous inspection” unless the car is not part of any open recalls. Dealers must make all recall repairs before a car is eligible for certification.

What About Other Claims Relating to the Ignition Switch Defect?

GM has already paid out a staggering $2.5 billion in penalties and settlements related to its defective ignition switches. This includes funds paid to the Department of Justice, the Federal Trade Commission, shareholders, and a victims’ compensation fund overseen by attorney Ken Feinberg. Victims received over $595 million in payments through the compensation fund. Now the states are poised to collect their part for GM’s violation of state consumer protection laws.

If you or someone you know suffered a serious injury due to a defective vehicle, including one involving a faulty GM ignition switch, please contact the Alexander Law Group, LLP immediately to discuss your rights. Call 888.777.1776 right now, for a free, confidential, and personal consultation with one of our attorneys or contact us online.

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