Lawsuits over GM ignition switch recall consolidated in New York

Article by Christian Andrei, on June 12, 2014

Lawsuits filed against General Motors Co. over economic damages resulting from a recall of faulty ignition switches will be consolidated in the Southern District of New York. The cases will be now sent to US District Judge Jesse Furman, according to a ruling by the US Judicial Panel on Multidistrict Litigation. Customers have already filed over 90 lawsuits against GM claiming that their cars lost their value no thanks to the recall.

GM had prayed for the court to have the cases consolidated and transferred to New York. GM is now asking the federal bankruptcy court in Manhattan to determine whether the terms of its bankruptcy sale order shields it from the recall claims.

The bankruptcy sale order led to the creation of "new GM" and largely should shield the new company from liability arising for the pre-bankruptcy conduct of "old GM." The order of the federal judicial panel, however, does not affect lawsuits over personal injuries or deaths allegedly caused by the vehicles.

While lawyers for the plaintiff had also for the consolidation of the cases, they don’t want it to be in New York. They instead suggested that the consolidated case be tried in Los Angeles, Miami, New Orleans, San Francisco or Texas.

The judicial panel, however, said that the Manhattan district was the most appropriate court to handle the consolidated case, since it was the same district as GM's bankruptcy, as well as the bankruptcy of Delphi Automotive Plc.

The panel said in its ruling that several judges in New York, including Furman, already “some familiarity with the common defendant and its prior bankruptcy proceedings."

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