Judge Dismisses Some Non-Injury Ignition Recall Claims Against GM

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Good news for GM: A federal judge has dismissed some claims brought against the automaker for its 2014 recalls, which infamously included the ignition switch fiasco.

U.S. District Judge Jesse Furman dashed the hopes of those seeking compensation for the drop in resale values of their GM vehicles following the scandal-ridden year. These types of claims are “unprecedented and unsound,” Furman wrote. Recognizing such claims would allow virtually any consumer who bought any product from an automaker facing a scandal to seek compensation.

The judge also dismissed state-law claims, racketeering claims, and claims from consumers in which the vehicles were allegedly not defective when sold. In total, lawyers were asking for as much as $10 billion in damages over a series of proposed class action lawsuits. Although he denied many arguments, Furman said he would recognize claims from drivers seeking compensation for out-of-pocket costs related to the ignition switch recalls. Other valid claims include those that seek to recover the difference between the amount the consumer paid for the defective car and the amount it would be worth without the flaw.

GM said it would keep defending itself against the barrage of claims. “The court made it clear the plaintiffs overreached in many aspects of their complaint, and the ruling significantly curtails the scope of their potential recovery,” GM spokesman Jim Cain told Reuters.

The ruling follows up on a previous court decision, which declared GM could not take cover behind its 2009 bankruptcy to evade economic-loss lawsuits. That ruling applied to claims made by “Old GM,” and the most recent ruling by Furman only applies to “New GM” vehicles.

Meanwhile, plenty of damage has already been done. GM has doled out $2 billion in settlements and criminal and civil penalties amid the ignition switch disaster. The faulty switches have been linked to 124 deaths and 275 injuries.

Source: Reuters