'Bellwether' Trial to Provide Template for GM Litigation

'Bellwether' Trial to Provide Template for GM Litigation Courtesy photo Robert Scheuer's crashed 2003 Saturn Ion.

There will be a lot on the line for General Motors Monday when lawyers for plaintiff Robert Scheuer try to prove the car crash that sent him to surgery was caused by a defective ignition switch that prevented air bags from deploying.

Southern District Judge Jesse Furman will preside over jury selection in the Scheuer case, the first of six bellwether trials in which plaintiffs lawyers are attempting to prove the automobile giant was late to recall cars with defective switches and engaged in a massive cover-up to avoid liability.

Scheuer suffered serious back injuries on May 28, 2014, when his 2003 Saturn Ion was struck by another car in Bristow, Oklahoma, forced off the road and into some trees.

Scheuer and some 1,600 other claimants allege the problem was a defect that caused the ignition switch to go from the “run” to the “accessory” or “off” position, causing their vehicles to lose power, speed control and braking, and, in Scheuer’s case and others, prevent air bags from deploying.

GM had sent out recall notices warning that multiple keys or other items on a key ring might cause the ignition to switch positions. Scheuer said he received two of those notices and followed instructions to remove all items from his key ring, save his ignition key for the Saturn.

GM, represented by Kirkland & Ellis partners Richard Godfrey and Andrew Bloomer, is confident it can defeat efforts of each of the six plaintiffs to prove the ignition switch rotated, that the timing of the rotation prevented the airbag from deploying and that their injuries were caused by the failure of the airbags to deploy.

“In the Scheuer case, GM will show the ignition switch did not rotate and the airbags were not designed to deploy in this accident,” GM spokesman James Cain said in a statement.

In papers filed with the court, Godfrey and Bloomer state that “The unrebutted scientific evidence shows that a Saturn Ion operated with only an ignition key is substantially less susceptible to inadvertent rotation, and cannot inertially rotate at all, than an ignition switch with a key having multiple items attached to its ring,”

They also objected pretrial to the fact that Scheuer’s car has not been preserved and asked for sanctions, but Furman said the case could go forward.

GM is accused of knowing about the faulty switches for years before it belatedly issued a recall notice in February 2014. Thirty million recalls were issued amid a storm of outrage and a congressional inquiry.

The company, sometimes referred to as “New GM” in court papers following its emergence from bankruptcy, paid $900 million as part of a deferred prosecution agreement with the Southern District U.S. Attorney’s Office. The company has also paid out close to $600 million of a fund it established to compensate claimants. Scheuer’s claim on the fund, however, was denied by the company.

Furman has been riding herd on the multi-district case, In re General Motors Ignition Switch Litigation, 14-MD-2543. Some 1,385 of the cases have settled for roughly $275 million and about 339 remain. A total of 217 are wrongful death and personal injury suits, with the remainder seeking damages claiming the recall reduced the resale value of their cars.

Lead plaintiffs attorney Robert Hilliard, of Hilliard Munoz Gonzales in Corpus Christi, accompanied by attorneys with Hagens Berman Sobol Shapiro in Seattle, Washington and Lieff Cabraser Heimann & Bernstein in San Francisco, California, also reached a $300 million class action settlement on behalf of General Motors shareholders who said the bad publicity over the recalls hurt their stock.

The plaintiffs attorneys, in their third amended consolidated complaint filed in December, condemned “New GM’s unprecedented abrogation of basic standards of safety, truthfulness, and accountability to the detriment of tens of millions of consumers and the public at large.”

Setting a Template

The six bellwether cases are designed to set the template for settlement on the remaining cases. The second trial, set to begin in March, is the only one of the six involving a death. Scheuer is making four claims for damages against General Motors, all under Oklahoma law, for Oklahoma Manufacturer’s Product Liability, fraud, and negligence as well as a claim for violation of the Oklahoma Consumer Protection Act.

Following the recalls, General Motors retained Anton Valukas, chairman of Jenner & Block, who issued a report on the ignition switches—excerpts of which are expected to be a key part of the Scheuer and plaintiff trials, the last of which is due to start in November.

The case will also feature dueling expert testimony, a May 16, 2014 consent order the company signed with the National Highway Traffic Safety Administration and the company’s deferred prosecution agreement in the Southern District. The last two documents will be presented to the jury with redactions. The trial is expected to last four to five weeks.

Furman has been shaping the parameters of the case in a flurry of pretrial opinions, including a decision in late December in which he ruled that Hilliard had presented at least a prima facie case for the admission of 15 Other Similar Incidents (OSIs) of alleged ignition switch failure (NYLJ, Dec. 30).

But Furman also deferred ruling on the actual admissibility of the 15 OSIs, and he expressed doubt about whether some witnesses would be allowed to testify, and concern over allowing “potentially inflammatory and emotionally charged testimony.”

On Dec. 29, Furman ruled on the absence of Scheuer’s car. General Motors had moved for sanctions against Scheuer based on spoliation of the evidence.

But Furman denied the motion and said “New GM is precluded from introducing evidence or argument suggesting plaintiff destroyed his car (or allowed it to be destroyed) or that the car, if preserved, would have yielded favorable evidence to New GM.”

On Jan. 4, the judge circulated a proposed jury questionnaire that asks what make of vehicle prospective jurors drive, whether they drive a GM car, and whether they or their family own GM stock, including at the time GM filed for bankruptcy in 2009.

The questions also include whether prospective jurors have ever been in an accident, whether air bags were deployed and whether, and how badly, they were injured. The jury pool received the questionnaire on Thursday.

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