Court tosses claims over lost GM car values, allows others

A US district judge today dismissed some claims brought against General Motors (NYSE:GM) by customers seeking to recoup vehicle values that they say were lost due to more than 70 recalls during 2014.

But the judge threw out broader loss-of-value claims from owners of GM cars that weren’t recalled. But Furman’s opinion said the argument that all GM cars lost value because of the recalls was unsound.

Those switches are responsible for hundreds of injuries and deaths due to GM’s failure to admit the switches could move out of the “run” position while driving.

The carmaker has already paid more than $2 billion to resolve legal claims stemming from the scandal, including $900 million to end a criminal probe by the US government, $575 million to settle a shareholder suit and more than 1,380 civil cases by victims, and at least $595 million through a victims’ compensation fund outside of court.

The case is In re General Motors LLC Ignition Switch Litigation, 14-MD-2543, U.S. District Court, Southern District of New York (Manhattan). Millions of vehicles have been recalled after GM concealed the defects for at least 10 years while vehicles were shutting down on the roads.

But the appeals court overturned most of that decision and allowed hundreds of pre-bankruptcy claims to proceed, including some lawsuits alleging that GM’s actions caused the value of its cars to drop. The appeals judges, he said, determined that Old GM knew that the cars could stall and air bags wouldn’t work but didn’t reveal those facts during the bankruptcy.

In addition to hundreds of cases put on hold while the appeals court made its decision, attorneys added that some of the almost 400 cases previously settled by plaintiffs could potentially be reopened.

Gordon said the loss-of-value cases will be hard to prove, but the death and injury cases are problematic for GM.

“Due process applies even in a company’s moment of crisis”, the court wrote, according to the AP.

The ruling also could affect 399 injury and death cases settled for GM by compensation expert Kenneth Feinberg for a total of $594.5 million.