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GM Ignition Switch Death Suit Refiled Over Fraud Claims

By Patrick G. Lee
May 13, 2014 1:03 AM EDT
A shop foreman installs tumblers for the key cylinder during the service recall on a General Motors Co. 2005 Chevrolet Cobalt at Liberty Chevrolet in New Hudson, Michigan, on April 25, 2014.
Photographer: Jeff Kowalsky/Bloomberg
A shop foreman installs tumblers for the key cylinder during the service recall on a General Motors Co. 2005 Chevrolet Cobalt at Liberty Chevrolet in New Hudson, Michigan, on April 25, 2014.

The Georgia attorney whose wrongful death suit against General Motors Co. (GM) helped trigger the recall of 2.59 million cars is seeking to revive that case, alleging the automaker fraudulently withheld information ahead of a settlement.

Lance Cooper’s latest legal maneuver may help generate more information about what GM knew -- and to what strata of management that knowledge traveled -- about faulty ignition switches the company has linked to at least 13 deaths in the past decade.

Cooper filed a new complaint yesterday in Georgia state court in Marietta, asking a judge to reopen the matter, which GM settled in September with his clients, the parents of 29-year-old Brooke Melton. Melton died in 2010 when her 2005 Chevy Cobalt lost power in a crash linked to the defective switch.

The filing by Cooper comes after another attorney pursuing injury and death claims stemming from the defective switches said May 2 that he had held settlement talks with Kenneth Feinberg, the lawyer hired by GM to advise on its recall. While GM has agreed to address accident and death claims, it says court orders in the company’s 2009 bankruptcy absolved it of responsibility for financial damages.

Proving fraud is not an easy task because “courts are reluctant to reopen tort settlement agreements,” Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia, said in an e-mail. As a result, they “impose a rigorous proof burden on those who seek to do so.”

GM, in a timeline released after its February recall of the 2005 Cobalt and other models, indicated that engineers knew of the fault as early as 2001. In 2006, GM engineer Ray DeGiorgio signed off on a request to change the part’s specifications, according to another document provided by GM after the recall.

In the new complaint, Cooper alleged DeGiorgio lied under oath last year when he denied knowing about any change to the switch’s design. GM affirmed DeGiorgio’s allegedly fraudulent responses, according to the court filing, which stated that GM’s conduct entailed “bad faith of the highest order.”

Cooper is also seeking sanctions against Detroit-based GM over the alleged misconduct as part of the new lawsuit, the filing of which was confirmed by a Cobb County court clerk.

“Critical Evidence”

“The Meltons would not have settled their case if they had known of the perjury and concealment of critical evidence,” according to an e-mailed statement by Cooper, whose Marietta-based firm represents the Meltons along with Jere Beasley of Beasley, Allen, Crow, Methvin, Portis & Miles PC in Montgomery, Alabama. Beasley Allen was involved in class action litigation over claims that defective Toyota Motor Corp. cars accelerated spontaneously.

GM “denies the assertion that GM fraudulently concealed relevant and critical facts in connection with the Melton matter,” the automaker said yesterday in a statement. “And GM denies it engaged in any improper behavior in that action.”

DeGiorgio, who is on paid leave from GM, couldn’t be immediately reached for comment.

The lawsuit could allow Cooper to recover more money for the victim’s family at trial, where a jury would rule on punitive damages against the carmaker. It also has the potential to shed further light on why GM took so long to mount the recall -- a question that is also being asked in investigations by lawmakers and the Justice Department.

“This case is the best vehicle to get to what GM knew and when they knew it,” Cooper said in a phone interview.

Jockeying

The filing also bolsters the prominence of Cooper -- whose firm was among the first to link a fault in the cars’ ignition switch to a potentially dangerous loss of power and failure of airbags -- among attorneys who have sued GM since the recall.

GM already faces more than 60 proposed group lawsuits over economic losses allegedly incurred by owners of the defective vehicles, as well as several death and injury suits. After a judicial panel decides later this month where to consolidate the suits, plaintiffs’ lawyers will start vying for lead lawyer positions.

To contact the reporter on this story: Patrick G. Lee in New York at plee315@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Jeffrey D Grocott, David E. Rovella

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