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What Does GM's Fine by NHTSA for Faulty Ignition Mean for Victims?




by:
Todd A. Walburg
Lieff, Cabraser, Heimann & Bernstein, LLP - San Francisco Office

 
June 10, 2014

Previously published on June 2, 2014

Last month, General Motors agreed to pay a $35 million fine to settle a probe by the National Highway Traffic Safety Administration (NHTSA) over its delayed safety recall for failing to report the potentially deadly defect earlier.

In announcing the fine, Transportation Secretary Anthony Foxx stated that GM "had that information and they told no one. Crashes happened and people died. Had GM acted differently, perhaps some of this tragedy might have been averted."

The $35 million fine, which was the maximum penalty NHTSA could issue, will not go toward victims who suffered personal injuries due to the faulty automobiles; instead it will go to the U.S. Treasury.

More on the GM Recall Issue

Federal transportation officials have criticized GM's culture and practices, saying company investigators, engineers, and executives knew for years there was a problem with ignition switches in Chevrolet Cobalts, Saturn Ions, and other similar vehicles. The design defect can cause the ignition switch to "slip out of the run position" while in use. As a result, the steering, brake assist, and air bags within the vehicle shut down and the car becomes inoperable.

The auto maker allegedly became aware of the defect in 2001. U.S. law requires car makers to report any safety defect within five days. GM was accused of violating this law by failing to report the defect. The NHTSA investigation found that GM instructed its employees in a 2008 presentation not to use words such as "defect," "dangerous," or even "problem" in describing any issues arising with company products.

Victims of the GM Defect Continue to Seek Justice and Hold GM Accountable

Although GM has paid the $35 million fine, it has not yet fully revealed the extent of the injuries and deaths attributable to the defect. As noted by the New York Times,

Ever since GM first began recalling 2.6 million small cars with the defective ignition switch in February, the company has refused to disclose the names of the victims or details of the accidents -- even to some survivors of the crashes and relatives of the dead. GM also has not shared its interpretation of the data from the so-called black boxes that helped the automaker identify the 13 deaths, leaving some local and state investigators to draw their own conclusions -- often erroneously -- about the crashes.

GM should acknowledge that more than 13 people died as a result of faulty ignition switches installed in its vehicles. GM owes "straight answers" to the families of the victims -- however many there may be, NHTSA Acting Administrator David Friedman has stated, "The final death toll associated with this safety defect is not known to NHTSA, but we believe it's likely that more than 13 lives were lost."

Legal Counsel Can Help

The issue with GM is particularly difficult to navigate since the company received bankruptcy relief in 2009. Part of the bankruptcy petition included freedom from liability for injuries that were incurred prior to the July 2009 petition for bankruptcy relief.

This is just one of the many issues that can make moving forward with a suit against GM difficult. However, those who are injured may still qualify for compensation to help cover the cost of medical treatment, rehabilitation, and potential pain and suffering.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Todd A. Walburg
Practice Area
 
Transportation
 
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