Judge: 'New GM' Not Liable for Death, Injury Claims

A 2009 bankruptcy order shields General Motors from billions of dollars in death and injury claims tied to defective ignition switches in older small cars, a federal judge ruled yesterday. But Judge Robert Gerber—who handled GM's government-funded bankruptcy case six years ago—also ruled that plaintiffs who claim a loss in the value of their cars can still sue General Motors, but only for company actions that happened after it left bankruptcy protection in July 2009. The ruling is at least a partial victory for GM, with one plaintiff's attorney saying it shields the company from $7 billion to $10 billion in potential legal liabilities, though it also leaves open the possibility of costly claims for decreased values of cars.

Texas attorney Robert Hilliard, who represents multiple plaintiffs in lawsuits against GM, says the ruling cuts off court options for victims in crashes that happened before GM left bankruptcy protection. "Hundreds of victims and their families will go to bed tonight forever deprived of justice," he says. "GM, bathing in billions, may now turn its back on the dead and injured, worry free." GM is still liable for legal claims from crashes caused by the switches after it emerged from bankruptcy. The company also has set aside at least $400 million and hired an attorney to compensate those killed or injured in crashes—no matter when they happened. So far, the attorney has determined that families of at least 84 people who died and another 157 injured people should be compensated. (More General Motors stories.)