Providence City Hall, Rhode Island
Providence City Hall, Rhode Island (Anatoli Lvov via Wikimedia Commons)

The city of Providence plans to sue General Motors Co. for failing to disclose ignition-switch defects in its fleet of vehicles.

The suit, which could be filed as early as this week, would be the first brought by a government entity against GM associated with the defect, which prompted recalls of millions of cars and trucks.

Joseph Rice, founding member of Mount Pleasant, S.C.-based Motley Rice, revealed the city’s plans in a July 28 filing seeking a lead role in more than 100 ignition-switch lawsuits coordinated before U.S. District Judge Jesse Furman in the Southern District of New York. Rice wrote that he represents Providence in a planned lawsuit over “its fleet of defective, diminished-in-value vehicles.”

Jodi Flowers, a member of Motley Rice, said Providence intends to file a class action on behalf of other municipalities in Rhode Island stuck with fleets of defective GM cars that have lost resale value. She said that Providence has dozens of cars, some of which are among a “second wave” of vehicles that GM has recalled for ignition issues.

“There are a significant number of defective cars with diminished resale vehicles,” she said. “They’ve got a pretty large spread of all makes and models.”

On another litigation front, GM claimed in a motion filed in U.S. bankruptcy court on Friday that a provision of its 2009 reorganization bars lawsuits over accidents that occurred before that date. In a separate motion, GM asserted that its bankruptcy barred lawsuits filed for economic damages associated with recalls announced subsequent to the initial 2.6 million for its ignition-switch defect. GM has said that its subsequent recalls were unrelated to the defect, which can shut off engines, disabling airbags and power steering.

GM previously moved to bar class actions seeking economic damages. U.S. Bankruptcy Judge Robert Gerber has scheduled a hearing on the new motions for Aug. 18.

GM spokesman Greg Martin wrote in an email that the motions, which were filed on the same day that attorney Kenneth Feinberg began accepting claims for a victim compensation fund, ask Gerber to “continue to enforce the terms of its approved sale of Old GM’s assets.”

“As we have repeatedly said, we want to do the right thing for the families of the victims and those seriously injured because of the faulty ignition switch,” he wrote. “This motion does not impact Mr. Feinberg’s compensation program, nor does it prevent people from participating voluntarily in it. Also, the implementation of the Feinberg compensation program does not impact GM’s protections under the bankruptcy court’s ruling.”

Motley Rice represents Bedford Auto Wholesale Inc., a used car dealership in Bedford, Ohio, in a nationwide class action filed under Michigan consumer protection law. The dealership, holding 36 of the recalled cars, claims they are “highly dangerous vehicles whose value has greatly diminished” and that it has been forced to pay interest on loans to keep or buy cars that don’t sell, according to a complaint filed on April 16.

Motley Rice is working with an attorney who has filed an additional dealership suit against GM. Nettleton Auto Sales Inc. in Jonesboro, Ark., which owns three recalled cars, filed its class action on May 23. The case, brought under consumer laws in Michigan and Arkansas, seeks to represent all car dealerships that purchased recalled GM cars before Jan. 31.

Randall Pulliam, a partner at Little Rock’s Carney Bates & Pulliam, which filed the suit, did not respond to a request for comment.

Motley Rice, which has an office in Providence, represented the state of Rhode Island in a massive public nuisance lawsuit against three lead-paint manufacturers. The firm obtained a verdict that held paint companies liable for $2.4 billion in cleanup costs, but the Rhode Island Supreme Court overturned the award in 2008. Motley Rice went on to represent 10 cities and counties in California in a $1.15 billion lead-paint decision this year.

Contact Amanda Bronstad at abronstad@alm.com.