GM could cite ruling in Chrysler’s class action victory

Article by Christian A., on March 26, 2014

Chrysler Group LLC this month won a class action case that may help General Motors Co. avoid some claims arising from faulty ignition switches installed on its small vehicles. The “old” Chrysler, formally known as Old Carco LLC, built Jeeps in early 2000s fitted with faulty airbags.

In Chrysler’s court-approved sale, the new-co assumed liability for recalls after taking ownership and repaired the airbags. When Chrysler disclosed the airbag recall, a class action was filed against new company in federal district court in Detroit seeking damages for owners of the Jeeps. The class action, however, didn’t seek damages for personal injuries.

United State District Judge Patrick J. Duggan dismissed the case on March 13, saying that owners had no right to make any further claims against new Chrysler since the carmaker had already repaired the Jeeps and promised to reimburse anyone who fixed them before the recall.

Duggan said the case was moot and the plaintiffs lacked “standing,” or eligibility, to file a lawsuit since they no longer had any valid claims. Duggan said that there was no longer a live controversy since the new Chrysler has acknowledged that the vehicles were defective and was making repairs.

On the other hand, the “old” GM, now known as Motors Liquidation Co., built Cobalts with faulty ignition switches before its bankruptcy. Cobalt owners could have filed claims in the bankruptcies had they been aware of the defects. Now, the new GM could cite Duggan’s ruling to defend against lawsuits over defects in the Cobalts. Duggan’s ruling, however, didn’t cover personal-injury claims and didn’t address to the liability of old Chrysler. [source: automotive news - sub. required]

Topics: gm, chrysler

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