General Motors’ executives and shareholders have been decidedly unhappy for over a week now, in the wake of a U.S. Supreme Court action that essentially crushed hopes that the behemoth automaker might escape future liability that could potentially cost the company a flatly astronomical amount of money.
Actually, it was the high court’s inaction that now has GM principals in what is undoubtedly a state of despair, if not near panic.
Here’s why: SCOTUS’ refusal to hear GM’s claim that an appellate federal court ruled wrongly in a materially important case leaves that lower opinion intact, with the car company still on the hook for what a recent news report calls “hundreds of lawsuits, potentially worth billions of dollars.”
Those claims relate to a matter that we suspect most readers of our blog in Connecticut and elsewhere will well remember, namely, faulty ignition switches in various GM vehicle models that summarily stalled engines and cut power to critical driving systems.
That frightening product liability glitch yielded sobering consequences, including a reported 124 deaths and more than double that number of non-fatal injuries.
GM has long asserted that its huge bankruptcy filing of several years ago completely relieved it of any liability and/or damage claims. In fact, a bankruptcy court ruled precisely that in a 2015 ruling.
The 2nd U.S. Circuit Court of Appeals saw things differently, holding that, because would-be claimants never received proper notice of ignition defects before GM declared bankruptcy, denying them courtroom access would violate their rights to due process under the Constitution.
The Supreme Court’s failure to take the case on appeal leaves that ruling intact.
And that means this, with certainty: GM will now be on the receiving end of many hundreds of product liability and wrongful death and personal injury claims, which the above-cited news report states “could be worth up to $10 billion.”