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Judge Rules GM Not Liable for Economic Loss Suits Totaling $10B

Motor Trend logo Motor Trend 4/16/2015 Erick Ayapana

One of the many legal battles General Motors faces from last year’s ignition switch recalls are non-injury lawsuits claiming economic losses. For now, GM is shielded from dozens of those types of lawsuits totaling almost $10 billion after a ruling yesterday from U.S. Bankruptcy Judge Robert Gerber.

In that ruling, Gerber stated that the “new” GM isn’t responsible for claims prior to July 2009 when the automaker emerged from bankruptcy proceedings. The ruling essentially upholds a motion GM filed last year to block economic loss claims directed at pre-bankruptcy “old” GM. The lawsuits in this ruling don’t include injury or death claims, which GM is handling separately, either through its compensation fund program or other suits.

Instead, this ruling focuses on claims of economic loss. A majority of the lawsuits are attempting to reclaim an alleged drastic drop in resale value that GM vehicles suffered as a result of the recall crisis. The Detroit News reports that the decision affects over 140 pending lawsuits and applies to as many as 70 million GM vehicles.

That said, a number of plaintiffs plan to file an appeal with the U.S. Court of Appeals.

The ignition switch recall, which covered 2.59 million vehicles, has been responsible for at least 84 deaths and 157 injuries. The GM compensation program still has over a thousand death and injury claims to review and is paying out at least $1 million for each approved death claim. Those who opt to settle through the compensation program can no longer sue GM in the future.

Source: The Detroit News

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