Ken and Beth Melton listen as lawyers Lance Cooper and Jere Beasley asked last month to rescind GM settlement. (John Disney/Daily Report)
General Motors has fired its first shot in a new legal battle with the Cobb County parents whose daughter died from crashing in a car with an ignition switch defect. The carmaker’s opening salvo is a procedural maneuver to relocate the case to federal court, where it could ultimately fall under the shield of bankruptcy.
“It’s not only wrong, it’s frivolous,” said Lance Cooper, the Marietta solo who represents Kenneth and Mary Melton, whose daughter Brooke died in 2010 after her Chevrolet Cobalt lost power and crashed. Cooper noted that GM’s registered agent for legal actions is in Cobb County. He plans to ask the federal court to move the case back to Cobb County State Court.
“All they’re trying to do is delay, delay, delay and ultimately wear down the ­Meltons and other families,” said Cooper.
The Meltons settled their lawsuit confidentially last year, but GM disclosed last week in an internal report that the company paid the Meltons $5 million—the maximum amount the in-house counsel involved could approve without higher authority.
But last month the Meltons asked a Cobb judge to rescind their settlement and they filed a new lawsuit, alleging the company provided false information in discovery and covered up a decade of knowing about the ignition defect and failing to correct it.
GM has refused to accept the return of the settlement funds from the Meltons, Cooper said. The company’s internal report last week blasted incompetence that let the ignition defect linger but did not suggest a cover-up.
In the new lawsuit, Cooper was joined by Beasley Allen, Crow, Methvin, Portis & Miles in Montgomery, Ala. Founder Jere Beasley noted that GM allowed the original lawsuit to remain in Cobb County State Court for years without attempting to remove it to federal court.
“Now they’re accusing the Meltons of fraud. It’s mind-boggling,” Beasley said Thursday. Beasley was referring to GM’s notice of removal to federal court, filed in Cobb State Court on Wednesday, which said the company has moved the case to the U.S. District Court for the Northern District of Georgia.
The notice cites “the legal doctrine of fraudulent misjoinder” in saying that the Meltons’ case against GM should have been separate from their case against Thornton Chevrolet, the dealership that sold Brooke Melton the car and returned it to her after repairs the day before she died. The lawsuit says the dealer told Brooke the problem she’d already noticed with the ignition had been repaired when it had not. GM is seeking to distance itself from its Georgia-based dealer to preserve its right to move to federal court.
GM’s notice says the action is the first step toward ultimately moving the case to United States District Court for the Southern District of New York, where 100 other cases have been gathered, and from which the company is seeking to protect itself under the shield of bankruptcy. Cooper said the Melton case should not be included with the bankruptcy because those claims are from 2009 and earlier, and Brooke died in 2010.
GM has hired new lawyers for the new Melton lawsuit. Wednesday’s notice was filed by Robert Ingram and Jeffrey Daxe of Moore Ingram Johnson & Steele. Ingram and Daxe could not be reached. GM spokesman Greg Martin called the company’s filings procedural, according to The Associated Press.
King & Spalding lawyers represented GM in the initial Melton case. The GM report last week said they strongly urged last year’s settlement after a plaintiffs’ expert said his research showed the company had changed the ignition switch.
Cooper said he plans to file in federal court a motion to remand the case to Cobb, where Superior Court Judge Kathryn Tanksley is familiar with the details of the discovery in the previous case.
The Meltons’ case and Cooper’s discovery for it led to GM’s recall of 2.6 million cars this year after the Meltons settled. They reopened their dispute on the basis of false statements they said GM executives made in discovery about their knowledge of the defect.
Asked if the Meltons could keep their $5 million and end the fight, Cooper said yes, but that he doesn’t expect them to. “They want their daughter’s death to really mean something for the entire public in this country.”
“It took courage on their part to take on a corporate giant,” said Beasley. “In all the years I’ve practiced law, I’ve never seen this.”
The major issue behind the new lawsuit is the potential for punitive damages against the carmaker for the alleged corporate cover-up. Beasley said he tried a 2002 case in Alabama with similar facts that resulted in a $122 million verdict, mostly in punitive damages.
Cooper said that on April 11, the ­Meltons asked GM to rescind the original settlement, but the company refused. He reported that GM’s attorney, Robert Ellis, responded: “As an initial matter, General Motors LLC denies the assertion that GM fraudulently concealed relevant and critical facts in connection with the Melton matter. And GM denies it engaged in any improper behavior in that action.”
Brooke Melton died March 10, 2010, when the ignition module of her 2005 Cobalt slipped into the accessory position as she drove along Highway 92 in Paulding County, according to the lawsuit. Melton’s Cobalt skidded into another vehicle, and Melton died of her injuries in the crash.
The incident was initially attributed to Melton losing control of her car on a rainy night. Cooper said his investigation showed that Melton’s vehicle was equipped with a defective ignition module that would travel out of the run position. He said such shifts have occurred while the vehicle is traveling, creating an emergency situation that turns off the airbags, engine power, antilock brakes and power steering.