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U.S. Supreme Court Ruling Could Cost GM Up to $10 Billion


Gorehamj

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John Goreham
Contributing Writer, GM-Trucks.com
4-26-2017

Back in July of 2016, GM-Trucks.com reported to our membership that an appeals court ruling against GM could cost the company billions. That ruling has now been upheld by the U.S. Supreme Court, which refused to take the case, thus codifying the lower court ruling. There is no place left for GM to turn to try to legally shield itself against liability in the ignition switch defect debacle.

 

The ruling means that GM is not shielded from liability because it went bankrupt and then reformed. GM had hoped that its "old GM" liabilities would be wiped clean when it reformed as "new GM" and in many ways, it succeeded. However, with regard to the ignition switch defect legal liability, all avenues of the legal attack led the company to the Supremes and they ruled against GM, just as the lower courts had.

 

The ruling means that not only is GM liable for the deaths and injuries, but also for the loss of value GM vehicle owners suffered due to the issue. Our readers may recall that when Toyota settled its massive liability case for unintended acceleration it was not the deaths and injuries that cost the company big bucks, but rather the cumulative loss of value the vast number of vehicles ownered suffered that hit the company in the piggy bank.

 

The Detroit News reports that the financial hit GM is now exposed to is about $10 Billion. Robert C. Hilliard, a lawyer who is handling 243 claims against G.M, told the New York Times, “There are a lot of cases out there that either are going to have to be settled by G.M. or litigated, now that the Supreme Court is not getting involved." GM's legal spokesperson, Jim Cain, had a totally different view of the matter, saying, "The Supreme Court’s decision was not a decision on the merits, and it’s likely that the issues we raised will have to be addressed in the future in other venues because the Second Circuit’s decision departed substantially from well-settled bankruptcy law." Perhaps Mr. Cain is correct, but if there are "venues" other than federal court and the supreme court in which to plead one's losing case, we have not heard of it.

 

Read our prior story here for more details.

 

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