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From Products Liability Law Daily, March 16, 2015

GM compensation fund settles “lynchpin” ignition switch defect case

By Pamela C. Maloney, J.D.

The parents of Brook Melton have accepted a confidential settlement from the General Motors compensation fund to resolve wrongful death and products liability claims they brought against General Motors, according to an announcement made by the Meltons’ attorneys. The Meltons’ lawsuit brought to light a 10-year cover-up of ignition switch defects that lead to the recall of approximately 2.6 million GM vehicles. Lance Cooper, one of the Meltons’ attorneys, declined to specify the amount of the payout from the compensation fund, citing confidentiality rules established by the fund’s administrator, Kenneth Feinberg. The attorneys did reveal that, after a series of discussions initiated by Mr. Feinberg and his representatives at the start of this year, the Meltons filed a claim with the compensation fund before the January 31 deadline.

Brooke Melton died from a brain injury she sustained in an accident which occurred when she lost control of the 2005 Chevrolet Cobalt she was driving, and the vehicle crossed the center lane and was struck by an oncoming vehicle. Her parents, Ken and Beth Melton, brought wrongful death, strict liability, and negligence claims against GM, the designer/manufacturer of the vehicle, alleging that the accident was caused by a “known” defect in the vehicle which allowed the ignition key to turn from the run position to the accessory/off position, causing the power steering to shut off and greatly reducing braking power. After reaching an initial settlement agreement with GM for $5 million, the parents learned that the auto maker had fraudulently concealed relevant evidence and had affirmatively misled them, and that their settlement had been based on incomplete and false data. The parents further claimed that GM had withheld the data solely to induce them to settle the case. The parents filed a claim to rescind the original settlement agreement and sought to renew their products liability claims against GM, along with their negligence claims against the car dealership that had serviced their daughter’s Cobalt (Melton v. General Motors, LLC, No. 14A1197-4).

The 2010 crash was initially attributed to Brooke’s loose of control of the car on a rainy night. But an investigation revealed the vehicle was equipped with a faulty ignition switch that allowed the key to turn out of the “run” to the “accessory” or “off” position, cutting power steering, anti-lock braking, lights, and disabling the air bags. After 18 months of discovery and a court order, GM finally produced documents showing that GM engineers first noted the ignition switch problem during the Cobalt’s production stage. GM took the defective vehicles to market anyway, and began to rack up complaints almost immediately. GM attempted to “fix” the problem with an October 2005 Technical Service Bulletin, but failed. For the next nine years, dozens of individuals died and hundreds of others were injured by the defective switches.

During a press teleconference, the Melton’s attorney’s called into question the findings of the Valukis report, stating that the documents had obtained from Delphi—the company that manufactured the ignition switch—during discovery were “extremely damaging” to GM. According to Jere Beasley, the information uncovered in the Delphi documents contradicted GM’s statements that it did not know about the defective ignition switch, revealing instead that the automaker knew that the switch was defective and tried to cover it up.

In announcing the settlement, Lance Cooper, one of the Melton’s attorneys, cited accountability as the primary catalyst behind the settlement. “One of the most important issues for the Meltons was accountability. This is a company that concealed this defect for years. They wanted to hold GM accountable, and that is what refiling the lawsuit did,” Cooper said. “They are grieving parents who simply wanted the truth and for no one else to suffer a similar loss.”

The Melton case has been credited with bringing GM’s wrongful conduct to the attention of the National Highway Traffic Safety Administration and to Congress and served as the impetus behind the creation of the compensation fund. The law firm also noted that the Melton lawsuit has propelled the GM ignition switch litigation to move forward in the MDL. In September 2014, U.S. District Judge Jesse M. Furman, who is overseeing the MDL, ruled against GM’s efforts to halt discovery efforts, noting coordinated discovery in the MDL and the Melton case should proceed immediately. The first MDL case is scheduled for trial in January 2016 due in large part to the Meltons’ decision to proceed with their second lawsuit.

GM compensation fund. Immediately following the expiration of the January 31 filing deadline for fund benefit claims, the GM Ignition Compensation Claims Resolution Facility (Facility) had reported that it has received 4180 total claims, of which 128 had been deemed eligible for benefits by the Facility Administrator, Kenneth Feinberg. As of March 13, 2015, the fund reported that it has now received a total of 4342 claims, of which 180 claims have been deemed eligible to receive compensation. The total death claims for which benefits have been approved has now reached 67 (GM Ignition Compensation Claims Resolution Facility: Detailed Overall Program Statistics, March 13, 2015). The remaining claims for which benefits have been approved include 11 Category I claims (claims involving physical injuries resulting in quadriplegia, paraplegia, double amputation, permanent brain damage, or pervasive burns) and 102 Category II claims (claims for physical injuries requiring hospitalization (or outpatient medical treatment) within 48 hours of the accident).

Attorneys: Lance Cooper (The Cooper Firm), and Jere Beasley (Beasley, Allen, Crow, Methvin, Portis & Miles, PC) for Ken Melton.

Companies: General Motors

MainStory: TopStory SettlementAgreementsNews MotorVehiclesNews

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