U.S. Bankruptcy Judge Robert Gerber of the Southern District of New York (Photo: Rick Kopstein/ALM.)
Lawyers have proposed a timetable for deciding whether General Motors Co.’s 2009 bankruptcy bars most of the lawsuits filed over its ignition-switch recalls.
GM, which recalled 2.6 million vehicles earlier this year over ignition-switch defects, moved last month to prevent class actions from going forward on behalf of consumers seeking economic damages, such as the lost value of their cars. Plaintiffs lawyers objected to the motion.
During a May 2 hearing, U.S. Bankruptcy Judge Robert Gerber of the Southern District of New York ordered both sides to agree to a schedule to address “threshold” issues, such as whether GM knew about the ignition-switch defects at the time of its bankruptcy.
Under a proposed order submitted on Thursday, GM’s lawyers would meet with plaintiffs attorneys next month to narrow down the facts they agree on. They would return to court by July 2, when Gerber is expected to determine what threshold disagreements remain or whether limited discovery is needed. Plaintiffs lawyers also have agreed, under the proposed order, to stay discovery until Sept. 1 at the latest.
“This is a process that really expedites the cases, rather than slows them down,” said plaintiffs attorney Alexander Schmidt, a partner at New York’s Wolf Haldenstein Adler Freeman & Herz, who sued GM in bankruptcy court to oppose its motion. “The threshold bankruptcy issues are common to every one of the 60 class actions that have been filed. And these threshold issues must be resolved before realistically any of those product liability and consumer fraud class actions can be litigated.”
Some firms objected to the proposed order. Michael Etkin, a partner at Lowenstein Sandler in Roseland, N.J.—co-counsel with plaintiffs firms including Kessler Topaz Meltzer & Check in Radnor, Pa., and San Diego’s Robbins Geller Rudman & Dowd—said he was concerned about “adequate communication” between attorneys in the bankruptcy case claiming to represent all plaintiffs and other lawyers with cases against GM. He also wants more information about the proposal to stay the litigation.
The proposed order would not affect proceedings before the U.S. Judicial Panel on Multidistrict Litigation, which will hear arguments on May 29 in Chicago about where the ignition-switch lawsuits against GM should be coordinated.
It also does not affect lawsuits over injuries, deaths or property damages. GM has acknowledged that the defects, which could shut off engines, preventing air bags from deploying in accidents, have been linked to 13 deaths.
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