U.S. District Judge Jess Furman (Diego M. Radzinschi/NLJ)
A federal judicial panel has ordered the transfer of 74 lawsuits filed on behalf of General Motors Co. customers over ignition-switch recalls to the Southern District of New York, where the automaker has moved in bankruptcy court to bar the cases.
The order, issued on Monday, is a win for GM, which had argued for the New York district at a May 29 hearing.
In its decision, the multidistrict litigation panel appeared concerned about the impact GM’s move in bankruptcy could have on the class actions.
“The Southern District of New York bankruptcy court already has been called upon by both General Motors and certain plaintiffs to determine whether the 2009 General Motors bankruptcy sale order prohibits plaintiffs’ ignition-switch defect lawsuits,” wrote U.S. District Judge John Heyburn, chairman of the U.S. Judicial Panel on Multidistrict Litigation.
The panel named U.S. District Judge Jesse Furman, who has heard appeals related to GM’s bankruptcy, to make all pretrial decisions about the litigation.
GM spokesman Greg Martin said in an emailed statement: “This order affirms what we’ve maintained all along. All cases should be transferred to the Southern District of New York, which is in the best position to coordinate with the bankruptcy court’s proceedings, has previously heard appeals from the sale order and injunction, decided several contested matters relating to the asset sale, and where several of the ignition-switch actions filed to date are pending.”
GM has recalled 2.6 million vehicles over ignition-switch defects, which could shut off engines and disable airbags. The automaker has paid $35 million to the U.S. National Highway Traffic Safety Administration and, in what CEO Mary Barra called an “extremely thorough, brutally tough, and deeply troubling” internal investigation, blamed the incompetence of certain engineers and attorneys for failing to identify the defects, which have been linked to 13 deaths.
It’s unclear whether lawsuits over deaths and injuries associated with ignition-switch defects could be coordinated with the class actions as part of the MDL panel’s order. In a footnote to its order, the panel acknowledged those cases but declined to say whether they should be included. GM has retained noted claims attorney Kenneth Feinberg to negotiate with those plaintiffs out of court.
Most of the plaintiffs lawyers in the class actions told the panel to transfer their cases to districts outside New York.
Many cited specific judges, such as U.S. District Judge James Selna in the Central District of California, who oversaw the sudden-acceleration litigation against Toyota Motor Corp.
But one of those attorneys, Elizabeth Cabraser, a partner at San Francisco’s Lieff Cabraser Heimann & Bernstein, put a positive spin on the MDL panel’s decision.
“We are pleased that the panel has acted promptly in this case, which has urgency for GM’s customers, and centralized the litigation under an able, experienced, and energetic judge,” she wrote in an emailed statement to The National Law Journal. “That is what we asked—and hoped for—from the panel, and we appreciate its decision.”
U.S. Bankruptcy Judge Robert Gerber of the Southern District of New York has halted discovery in the class actions while the bankruptcy issues are being decided.
Contact Amanda Bronstad at firstname.lastname@example.org.