GM Wins Crucial Legal Victory in Recall Battle

General Motors may be losing the public relations battle in its recall of defective cars, but the company scored a much-needed victory last week in its escalating legal war.

The automaker fended off a potentially devastating court order Thursday when a federal judge denied a motion that would have forced it to advise the owners of the 2.6 million recalled Chevrolet Cobalts, Saturn Ions and other small cars with a faulty ignition switch to keep the cars off the road until they are fixed.

Recent filings by the company in other cases show that it plans to aggressively fight any legal action stemming from episodes from before July 10, 2009, the date it emerged from bankruptcy.

The ruling on the so-called Park It motion came in a lawsuit filed by a Texas couple, Charles and Grace Silvas, over compensation for the lost value of their recalled 2006 Chevrolet Cobalt. Judge Nelva Gonzales Ramos of U.S. District Court in Corpus Christi, Texas, denied the motion, saying the National Highway Traffic Safety Administration, the federal agency that regulates the nation’s roadways, had primary jurisdiction over the issue.

“The court is of the opinion that NHTSA is far better equipped than this court to address the broad and complex issues of automotive safety and the regulation of automotive companies in connection with a nationwide recall,” Ramos wrote.

Allan Kam, a safety consultant in Bethesda, Md., who worked for the agency for more than 25 years and retired as its senior enforcement lawyer, said he found nothing in the law that would give the agency authority to force an automaker to tell customers to stop driving a car.

GM had vigorously fought the motion, saying it was unnecessary and would “confuse consumers and result in regulatory chaos.”

The defective switch can, if jostled, shift the ignition of a moving car into the “accessory” power mode, potentially shutting down power steering and brakes and disabling air bags. GM has linked the problem to 31 accidents and 13 deaths.

Sen. Richard Blumenthal, D-Conn., who has criticized the company’s handling of the ignition safety issue, called on GM to voluntarily advise owners not to drive the recalled cars.

“GM has no reason to rejoice in this partial and premature victory, because its customers remain at risk, and its legal responsibility for future harm is only higher,” Blumenthal said in a statement.

1 Comment
  1. Lee Young 3 years ago

    I (briefly) felt sorry for GM’s CEO before Congress’s barrage against (her and) GM UNTIL I heard she had been employed there 20+ years!
    The old Ken Lay excuse that he didn’t know what HIS departments were ‘doing’ @ ‘ENDRUN’ was the template Ms. Barra used. We have a term here in Texas that starts with the word “BULL”.

    GM’s suggested cure for eliminating the recalls was to take all but 2 keys off the keychain and most likely dusted their (bloody) hands afterwards. The last I heard yesterday, GM wants to declare ANOTHER BKL so they can tap dance around another problem.

    I personally am sorry I BELIEVED GM’s “poster boy car Cruze” would have any quality in their attempt to stay afloat. I have recounted all the woes I have had with mine; when I hit 45K on the odometer a coupa weex ago, the check engine light came on! the next day; not on, next day on; etc until I took it to O’Reilly who said the “thermostat’s stuck open”. I called your fav Chevy dealership’s parts dept and asked how much a new thermostat costs…the parts man said there is nothing listed such as that: which model was I driving? I told him it was a 2011 Cruze POS model.

    If I live to be 150, I will NEVER buy another GM junker joke! (Scotty says im lucky it was stuck “open” and about the only problems will be slower warm up in the winter PLUS an inspection sticker) I. Hope to be RID of this nightmare long before that becomes an issue,,, .

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