Lawyers say GM documents contradict Valukas report

By Nick Bunkley, Crain News Service

DETROIT (March 18, 2015) — Plaintiffs from around the country who are suing General Motors Co. over faulty ignition switches have gained access to “millions” of previously confidential documents produced by the auto maker and plan to depose numerous current and former top executives this year, two lawyers involved in a key case said March 16.

Their comments suggest that GM's confidential settlement last week with the parents of a Georgia woman who died in 2010 could mark the beginning of more disclosures about GM's handling of the ignition defect, rather than just closing a chapter in the case.

Lawyers Lance Cooper of Georgia and Jere Beasley of Alabama contend the documents, which include internal communication between GM officials and the auto maker's attorneys, contradict the conclusions reached by GM's internal investigation.

That investigation, conducted by former federal prosecutor Anton Valukas, said incompetence and neglect — not an intentional effort to conceal the problem — allowed defective switches to remain on the road for more than a decade after employees learned of problems with them.

“The documents clearly show they knew it was a safety issue but chose to ignore it,” Mr. Cooper said on a conference call with reporters. “It wasn't incompetence. It was a cover-up.”

A GM spokesman declined to comment.

‘Emotionally exhausted'

GM turned over the documents as part of a second lawsuit filed by Ken and Beth Melton, whose daughter Brooke died when her Chevrolet Cobalt crashed in March 2010. The Meltons' first case against GM, settled for $5 million in 2013, forced GM to finally acknowledge the defect publicly and recall millions of vehicles.

The couple dropped their second case — which accused GM of fraud in the first settlement — last week after accepting a payout from the compensation fund GM established for victims of crashes linked to the ignition defect. The Meltons reached a separate deal with John Thornton Chevrolet in Lithia Springs, Ga., the dealership where Brooke Melton had taken her Cobalt days before her death, complaining that its engine had shut off. Terms of the deals are confidential.

Mr. Cooper said the Meltons were “emotionally exhausted” and felt they had accomplished their goals: getting GM to acknowledge that their daughter's death was caused by a defective switch and unlocking the trove of documents that other cases against GM can now use.

Brooke Melton's death is one of three fatality claims that the GM compensation fund, run by lawyer Ken Feinberg, approved last week. The fund said on March 26 that it has now approved claims for 67 deaths and 113 injuries. Nearly 1,500 claims remain under review.

Mr. Cooper said Mr. Feinberg approached the Meltons in January, shortly before the deadline to apply, and invited them to submit a claim through that process, which they did. Mr. Feinberg deemed the claim eligible for compensation and GM didn't dispute that conclusion, Mr. Cooper said. The exact amount wasn't disclosed, but payouts start at $1 million for deaths.

Mr. Beasley, who worked with Mr. Cooper on the Meltons' case, said he thinks the settlement will help lead to similar resolutions in many other cases related to the ignition defect. He compared it to a bellwether verdict against Toyota Motor Corp. in 2013 that preceded deals in other unintended-acceleration cases.

“In my opinion, General Motors will never try a lawsuit where the defective ignition switch is involved,” Mr. Beasley said. “I don't think they can afford to.”

Depositions of top execs

The documents GM turned over to Messrs. Cooper and Beasley could play a crucial role in cases created by consolidating numerous class-action suits related to crashes after GM's 2009 bankruptcy. The first case is scheduled to reach trial as early as January 2016.

Until then, Mr. Cooper and other lawyers involved in it expect to conduct a series of depositions that he said would ultimately be made public.

It was an April 2013 deposition of engineer Ray DeGiorgio — one of 15 employees that GM dismissed last year for their handling of the defect — that sparked further investigation of the switch problem within GM, eventually prompting the first recall in February 2014.

“Beginning in May, depositions of all important General Motors witnesses will be taken, including the high-level executives,” Mr. Cooper said. He did not name the witnesses but said they include both current and former executives as well as the dismissed employees.

GM CEO Mary Barra has testified before Congress on the matter multiple times but not as part of any legal proceedings. It's unclear whether former CEOs Dan Akerson and Rick Wagoner would be called to testify. Mr. Akerson has said he knew nothing about the defect before stepping down in January 2014, and Mr. Wagoner, who ran GM when the faulty switch was designed and produced, has not spoken publicly about it.

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.