By Nick Bunkley, Crain News Service
DETROIT (May 20, 2014) — Any compensation process set up by General Motors Co. for victims of faulty ignition switches is sure to have a scope far beyond the 35 crashes and 13 deaths that the auto maker has linked to the defect.
GM’s acknowledgment of the defect, which triggered a recall of 2.6 million small cars, has raised questions about whether a flimsy ignition switch could have played a role in any unexplained crash involving those vehicles over the past decade.
That’s likely to complicate the work of Kenneth Feinberg, the victim-compensation expert GM has hired, as he sorts out which of the thousands of crashes that occur every year involving Chevrolet Cobalts, Saturn Ions and other cars covered by the ignition switch recall could be connected to the problem, and which victims are in line for compensation.
Through 2012, the most recent data available, 1,752 people died in crashes involving the cars covered by GM’s recall, according to a federal database of traffic fatalities. While only a small fraction of those deaths are likely related to the ignition switch, each could present an opportunity for a victim’s family to place some blame on GM and seek compensation.
For a reminder of this risk, Mr. Feinberg need only look back to his time administering the $20 billion BP oil spill fund, when numerous lawsuits accused him of fraudulently delaying or denying claims, while BP complained that his proposed settlements were too generous.
‘Civic and legal obligations’
Texas lawyer Bob Hilliard claims to have linked 53 deaths and 273 injuries to the faulty ignitions. After the recall was announced, the police chief in Lexington, Ala., reopened the investigation into a December 2013 fatal crash that initially had been blamed on driver distraction, and the victim’s father, a retired GM employee, filed suit.
Mr. Hilliard says 63 of his clients’ injuries were “catastrophic,” and two lawsuits recently filed by other firms blame GM for severe, permanent injuries that will require expensive care for the rest of the victims’ lives. The lawyers in those two cases said they sued because they are not confident that any compensation fund would adequately cover the families’ needs.
“These children, these families, these lives...they are too important to be lumped up into an underfinanced fund,” Thomas J. Henry, who represents the parents of a paraplegic 6-year-old in Pennsylvania, said in a statement.
Whether most other crash victims and family members choose to seek compensation through Mr. Feinberg or a potentially lengthy lawsuit may depend on the structure and eligibility requirements of any GM plan.
The timing of a crash might also factor in. GM has not indicated that it will claim immunity for accidents that happened before its 2009 emergence from bankruptcy proceedings, which formally shifted liability for those accidents to GM’s predecessor company. But lawsuits related to pre-bankruptcy crashes could be more difficult to win.
GM, which announced Mr. Feinberg’s hiring April 1, has said it expects to decide by early June how to proceed. GM officials haven’t confirmed plans to set up a compensation fund, saying only that the company has “civic and legal obligations as it relates to injuries involving recalled vehicles.”
A big point of contention will be whether the ignition switch caused crashes by cutting power steering and brake assist or just exacerbated injuries by preventing airbag deployment.
“They want to make this a case about airbag non-deployments and not a loss of control,” said Lance Cooper, a Georgia lawyer who sued GM in April on behalf of Haley Van Pelt, who suffered an incapacitating brain injury when her Ion crashed in July 2009. “If it’s a loss-of-control issue, there would be many more incidents, so it doesn’t want to make loss-of-control cases a part of the problem.”
Mr. Cooper’s lawsuit says the ignition switch in Van Pelt’s car slipped out of “run,” causing it to lose control and hit a tree and preventing the airbag from deploying. It says medical bills for Van Pelt, who was driving the speed limit and wearing her seat belt, already have surpassed $1 million.
Even in crashes that GM has linked to the defect, it’s uncertain whether the company will assume liability for everyone injured or killed.
GM’s tally of 13 deaths includes 15-year-old Amy Rademaker, who died in October 2006 when a Cobalt driven by another teen with only a learner’s permit crashed in Wisconsin. But it doesn’t count 18-year-old Natasha Weigel, another passenger in the car.
That’s because Ms. Rademaker was riding in the front, where the airbags failed to deploy, while Ms. Weigel was in the back, with no airbags. None of the three occupants, including the driver, who suffered a brain injury but survived, was wearing a seat belt.
But a suit filed in March by the teens’ families blames GM for both deaths, arguing that the defective ignition switch contributed to the driver losing control. Black-box data downloaded by police show that the ignition switched to “accessory” mode two seconds before a crash was recorded.
“They want to make this a case about airbag non-deployments and not a loss of control.” — Lance Cooper, Georgia lawyer
The Cobalt went off the side of a road and vaulted into the air for about 59 feet, then traveled 128 more feet on the ground as it drove over a utility box and ultimately struck two trees at about 38 mph, according to a crash investigator’s report released this month by Sen. Ed Markey, D-Mass.
A crash near Knox, Pa., that paralyzed Trenton Buzard in April 2009 involves a similar issue, with the added complication that the driver of another car was at fault.
A drunken driver crossed the center line and slammed into the front of a Cobalt, killing 73-year-old Esther Matthews and her 13-year-old granddaughter, Grace Elliott, neither of whom was belted. Mr. Buzard, Ms. Matthews’ great-grandson, who was buckled in a car seat, suffered a cervical spinal-cord injury and brain hemorrhages.
Black-box data show the Cobalt’s ignition cut off one second before the crash, which also killed the other driver. A lawsuit filed against GM this month by Mr. Buzard’s parents claims his injuries are “a direct and proximate result of the collision and the negligent conduct of defendants.”
GM has reached settlements related to some crashes, including at least two claims that were resolved as part of its 2009 bankruptcy.
It’s unclear whether the company or a judge would agree to throw out the deals—or whether voiding them would be a prerequisite—if the families wanted to seek a larger payment through Mr. Feinberg instead.
The parents of Brooke Melton, who died in a 2010 crash of her 2005 Cobalt in Georgia, asked GM in April to rescind their September 2013 settlement now that they know about the defect, but the company refused. They refiled their suit against GM last week, accusing the company of hiding evidence.
Many of the lawsuits filed before the recall argued that the cars were defective, but the families chose to settle rather than fight GM, which at the time denied any flaws in the airbags or ignition switch.
Six years ago, GM responded to a lawsuit over the November 2004 crash of an Ion in Texas by arguing that the plaintiffs had no evidence of a defect and that the lack of airbag deployment didn’t cause the occupants’ injuries. The 21-year-old driver, Candace Anderson, was injured, and her 25-year-old boyfriend, Gene Mikale Erickson, died on impact.
GM’s lawyers in the case also pointed to the fact that Ms. Anderson had pleaded guilty to criminal negligent homicide after testing showed she was driving under the influence of methamphetamine and Xanax.
“The severity of Mr. Erickson’s injuries were a direct result of his being unbelted...and were not a result of non-deployment of the right front passenger’s frontal airbag,” a GM engineer, Kathryn Anderson, wrote in a March 2008 report filed with the court. She made the same conclusion about the driver’s injuries and wrote that the Ion’s frontal-restraint system exceeds federal standards.
Candace Anderson and Mr. Erickson’s family settled with GM a month later, court records show.
This report appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business.