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GM switch plaintiff drops case after being accused of lying

This Jan. 8, 2016 photo provided by the U.S. District Court, Southern District, taken by a court employee/photographer, shows a section of a General Motors car in a courtroom in New York where jury selection began Monday, Jan 11, 2016, for a trial meant to narrow legal issues for hundreds of civil lawsuits brought against General Motors over faulty ignition switches. (U.S. District Court, Southern District via AP)
This Jan. 8, 2016 photo provided by the U.S. District Court, Southern District, taken by a court employee/photographer, shows a section of a General Motors car in a courtroom in New York where jury selection began Monday, Jan 11, 2016, for a trial meant to narrow legal issues for hundreds of civil lawsuits brought against General Motors over faulty ignition switches. (U.S. District Court, Southern District via AP)

(Bloomberg) -- The Oklahoma mail carrier at the center of the first trial over General Motors Co.’s deadly ignition-switch defect is dropping his claims after he and his wife were accused of lying in court, in a major victory for the carmaker.

Robert Scheuer, 49, will walk away empty-handed, ending a lawsuit that was supposed to serve as a guide for hundreds of others against GM over the ignition switch, his lawyer said in a filing Friday in Manhattan federal court.

Scheuer sued over claims the defective switch in his 2003 Saturn Ion disabled his air bag in an accident that led to neck and back injuries. The case, the first of six so-called bellwether trials used to help settle mass litigation, collapsed after GM found evidence undermining several claims. They included the nature of his injuries and his family’s eviction from their “dream house” after the wreck.

“The apparent lies the plaintiff and his wife told the jury ended the trial early, and we are pleased that the case is over without any payment whatsoever to Mr. Scheuer,” a GM spokesman, James Cain, said in a statement.

‘Devastating’ evidence

U.S. District Judge Jesse Furman on Thursday granted GM’s request to show jurors evidence that Scheuer and his wife, Lisa, had fabricated the story blaming GM for their eviction about four months after the accident. The judge said the new evidence would probably be “devastating,” making the suit “almost worthless as a bellwether case.”

“To have any trial end in such an unexpected and unfortunate way is disappointing, especially given the time and effort we put into getting ready,” Scheuer’s lawyer Robert Hilliard said Friday. “There are legitimate concerns about the safety of this vehicle as a result of this defect. A jury needs to decide, and that’s unrelated to a dream house issue. The next jury will have that opportunity.”

Detroit-based GM claimed Scheuer had doctored a federal- government check stub to provide “proof of funds” to move into the family’s new home. When the real estate agent found out, the family was evicted, the carmaker said. GM said the real estate agent had come forward after the trial started, and that the company had extensive evidence that it had nothing to do with the family’s financial troubles.

Scheuer and his wife both hired criminal-defense attorneys this week after the carmaker accused them of lying.

Bellwether cases

Their trial was the first of six bellwether ignition-switch cases intended to help the carmaker and thousands of motorists in possible settlements and other litigation after GM admitted the flaw affected millions of vehicles.

In the bellwether system, each side chooses representative cases for alternating trials. Now the attention will turn to one picked by GM.

It was filed by plaintiffs who claim they were injured in a January 2014 crash on an icy bridge in New Orleans. GM is already hinting at its defense in that case, which is set for trial in March.

Other accidents

At least 38 other vehicles “had accidents on the same bridge that evening due to black ice weather conditions,” Cain said Friday. “This was a very low-speed crash and there is no claim about airbag non deployment. Rather, the claim is the switch rotated causing a loss of control.”

The first case for trial was chosen by Hilliard, who with Steve Bermanis leading the ignition-switch litigation. Hilliard hasn’t denied the allegations of forgery and perjury against the Scheuers in the case dismissed Friday.

Related: GM ignition nightmare won't go away, for victims or company

“Plaintiff’s counsel picked the wrong plaintiff and didn’t vet him well enough to catch huge problems with using him in a bellwether. The judge cannot be amused,” said Erik Gordon, a business professor at the University of Michigan who isn’t involved in the case.

GM recalled 2.59 million cars due to the defect and has already paid more than $2 billion in legal costs and settlements. Despite GM’s admissions, the company is challenging liability in hundreds of individual cases.

The company argued all along that Scheuer’s wreck wasn’t bad enough to trigger the air bag, and that he had suffered from severe neck and back pain for more than a decade before the crash.

Agent’s evidence

The Scheuers testified the eviction from their home was GM’s fault because Robert Scheuer suffered memory loss after the wreck and misplaced a check for a down payment. GM said that, after the trial started, the couple’s real estate agent reached out with evidence of the alleged forgery and planned to testify about it.

According to the company, Robert Scheuer altered the original check by adding “$441” to the original amount, $430.72, making it appear to be $441,430.72. The carmaker said he also altered the date and used Postal Service stickers from his job to make it appear the check had been mailed, when it hadn’t.

The case is Fleck v. General Motors LLC, 1:14-cv-08176, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from David Welch and Sophia Pearson.

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Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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