Problem With GM Test Case Emerged Early in the Trial

Problem With GM Test Case Emerged Early in the Trial Courtesy photo Robert Scheuer's crashed 2003 Saturn Ion

The lawyers defending General Motors in the multi-district litigation over defective and dangerous car ignition switches were picking a jury when they received a litigator’s gift from heaven.

That gift—an unexpected witness whose account would debunk the plaintiff’s claim that a faulty switch led to his injuries in a car crash—set in motion a series of actions that would cause the first bellwether trial against GM to completely collapse.

Over the next 10 days, through opening arguments in which plaintiff Robert Scheuer stood with his wife and their two young daughters smiling for the jury, through the couple’s soon-to-be-discredited testimony, and right up until Thursday afternoon when the plaintiffs rested, GM’s legal team worked to sweep the case out of Southern District Judge Jesse Furman’s courtroom.

The failure of the Scheuers’ claim will have no impact on the remaining five cases, but it is one less opportunity for the plaintiffs’ legal team to have a jury declare the ignition switch was the culprit in a collision.

The case began to unravel on Jan. 11, one day before opening arguments. An Oklahoma realtor who handled plaintiff Robert Scheuer’s attempt to buy his “dream home” after his 2014 car accident heard a radio report about the trial. The realtor, Robert Kleven, called GM to say Scheuer’s story wasn’t true.

Once the call came in from Kleven, Kirkland & Ellis partners Richard Godfrey, Andrew Bloomer and Mike Brock and their team interviewed Kleven in Sand Springs, Oklahoma on Jan. 16, employed a forensics expert and assembled their arguments.

On Jan. 18, they filed a motion and a brief under seal to revise their witness list to add Kleven and a second witness, a KPMG forensic technology services manager, and to recall Lisa Scheuer to impeach her testimony about the extent of her husband’s incapacity and its impact on the real estate deal.

On Jan. 19, they followed with a memorandum of law, unsealed, that said Kleven was prepared to testify about an “apparently altered or fabricated” check stub for $441,431—an amount that Scheuer, a 49-year-old mailman, represented was in his federal government retirement fund “even though plaintiff knew he did not have the funds to close.”

The lawyers said the forensics expert would testify that his analysis of text messages between Scheuer and Kleven “confirms Mr. Kleven’s recitation of events and overwhelmingly demonstrates Mr. Scheuer’s apparent fraud,” concerning the May 2014 crash of his Saturn Ion.

The evidence, the GM lawyers said, directly contradicted Scheuer’s assertion on the witness stand that he was unable to remember anything about the real estate deal, and contradicted his wife’s insistence that he was incapable of working to complete the purchase.

This came on top of GM evidence contradicting Scheuer’s testimony that he was unconscious for almost three hours after the accident. Phone records showed Scheuer used his cell phone to check his voice mail twice during the time he claimed to be passed out behind the wheel of his damaged car.

And it also followed Scheuer’s admission that, for almost a year, the treatment he received for back and neck injuries he supposedly sustained in the crash was the same treatment he had already been receiving for his pre-existing injuries.

On Thursday, with the check stub, text message and other evidence showing what the defense called the Scheuers’ “fundamental misstatement of the underlying facts,” Furman looked at plaintiffs’ lawyer, Robert Hilliard, and said, “It might make sense to make this case go away.”

Hilliard, of Hilliard Munoz Gonzales in Corpus Christi, Texas, called the revelation “shocking” and, while he was absolved of any blame by Furman, his decision to designate the Scheuer trial as a test case was questioned.

The Scheuers are no longer Hilliard’s clients, and they now have criminal lawyers to fend off possible charges for lying on the witness stand about the real extent of Robert Scheuer’s mental and physical injuries the crash, as well as the couple’s belatedly withdrawn claim that the accident cost them their dream house.

“It’s tough to take a step back and say we’re not going to sponsor or be part of any potential fraud on the courts or the jury,” Hilliard said after Furman dismissed the jury Friday morning. “I feel a jury needs to decide there’s a defect putting people’s lives at risk—and before this unexpected and stunning [revelation], I thought that, with respect to the defect, we had a strong case.”

Furman is presiding over some 300 cases that were not settled by General Motors on the defective ignition switches that forced the company to announce a massive, and late, recall of over a million cars in February 2014.

Furman’s numerous pretrial rulings set the rules for both the Scheuer case and, to a lesser extent, the other bellwether cases.

Six bellwether cases were selected, with three chosen by each side. One of the cases is a class action where plaintiffs are seeking damages for the reduced resale of their vehicles because of the recall and bad publicity; the rest are personal injury and wrongful death cases.

The cases were chosen to set the parameters for settlement and Furman said the other cases looking to Scheuer’s trial for guidance were poorly served.

He faulted plaintiffs’ counsel for choosing the case, especially because it was an “outlier.”

What made Scheuer’s case different was that his accident occurred post-recall, and that he had pre-existing neck and back injuries going back over two decades. Scheuer also insisted he followed General Motors’ instruction to remove all items but the ignition key from his key chain to prevent the ignition switch from inadvertently turning from the “off” to the “accessory” setting—a defect that can cause a loss of power for brakes and steering and prevent air bags from deploying.

The uncovered evidence, Furman said, might not even be the worst of it, and it “quite frankly, makes this case almost worthless for the purposes of settlement.”

Hilliard took the rebuke, filed papers voluntarily dismissing the case Friday morning and prepared to turn his attention to the next trial.

He said his last act representing the Scheuers was to speak with Robert Scheuer Thursday night to tell him the case was over.

Hilliard was asked if he had received an apology from his client, and, while he said the conversation was privileged, he added, “That’s a good question.”

Hilliard was joined in representing Scheuer by co-counsel Steve Berman of Hagens Berman Sobol Shapiro in Seattle, Washington, and attorneys with Lieff Cabraser Heimann & Bernstein.

He said a second team of attorneys has been preparing for the next trial in March, a pre-recall case brought by Dionne Spain and Lawrence Barthelemy, who claim a defective ignition switch caused their car to lose power and crash on a bridge in New Orleans in January 2014. Spain and Barthelemy do not allege a failure of the air bags to deploy.

General Motors selected the Barthelemy case for what it says was a good reason: the vehicle was one of 38 that hit a run of black ice on the bridge and got into accidents, including a police cruiser and an ambulance.

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