General Motors Protected from Paying Punitive Damages for Defect that Caused More than 100 Fatalities
UNITED STATES – The United States Court of Appeals for the 2nd Circuit issued a ruling that protects General Motors (GM) from having to pay punitive (penalty) damages for intentional misconduct caused by actions taken by its corporate predecessor, the “old GM," according to an article on FREEP.COM.
Punitive damages are a way for the at-fault party to be punished for intentional wrongdoing, and in this instance, it would be for GM selling vehicles that it knew to be defective. In essence, the “new GM” emerged from a government-brokered bankruptcy ten years ago. GM successfully argued that because of the creation of a new company, legal claims predating its bankruptcy could not be filed. As a result, GM has limited liability for its defective ignition switches that led to serious injuries and death.
The company’s faulty ignition switches are one of the most deadly automobile defects in United States history, where a total of 124 individuals were killed and 275 others sustained injuries in cars such as the Saturn Ion and Chevrolet Cobalt. These vehicles were manufactured before GM filed bankruptcy in 2009. The defective ignition switches caused vehicles to stall while in operation.
GM issued a recall of 2.6 million Chevrolet Cobalts and other small vehicles back in 2014, but has admitted to having knowledge of the defect for more than ten years. In fact, federal prosecutors have previously stated that the company could have fixed the defect for less than one dollar per vehicle.
While consumers cannot obtain punitive damages from GM, they are still filing lawsuits for the economic losses they experienced as a result of the defective ignition switches. These claims make up a large portion of GM’s remaining exposure regarding the defect.
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