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GM judge throws out key ignition claim in second trial

GM is challenging suits that it believes wrongfully blame the ignition flaw for crashes, injuries and deaths.
GM is challenging suits that it believes wrongfully blame the ignition flaw for crashes, injuries and deaths.

(Bloomberg) -- General Motors Co. won a partial victory in its second trial over faulty ignition switches as a judge threw out a key fraud claim against the automaker, a company spokesman said, boosting the company’s outlook for resolving hundreds of similar cases on better terms.

A federal judge in Manhattan on Monday dismissed the fraud claim, granting a GM motion that driver Dionne Spain hadn’t presented enough evidence to show that the company made false or misleading statements about the defect in its cars. U.S. District Judge Jesse Furman didn’t issue a written opinion. The ruling follows Furman’s earlier rejection of other claims, including a demand for punitive damages.

Jurors in Manhattan federal court will still weigh whether Spain’s 2007 Saturn Sky had a defect and whether that defect led to a crash on a New Orleans bridge in 2014. GM rested its defense Monday and the case will go to the jury Tuesday.

Fraudulent misrpresentation claim dismissed

“Dismissing the fraudulent-misrepresentation claim was the right decision because there was not sufficient evidence presented at trial to even send it to the jury to decide,” GM spokesman Jim Cain said in an e-mailed statement.

An e-mail to lawyers for Spain wasn’t immediately returned.

GM, which recalled millions of vehicles over the flaw in 2014, admitted to using defective ignition switches for years and to hiding the fact from customers and regulators. But the company is challenging suits that it says wrongfully blame the flaw for crashes, injuries and deaths.

Criminal probe

The Detroit-based carmaker has already paid out more than $2 billion to resolve legal issues stemming from the scandal, including $900 million to end a criminal probe by the U.S. government; $575 million to settle a shareholder suit and more than 1,380 civil cases by victims; and $595 million through a victims’ compensation fund outside of court.

The first case, selected by the plaintiffs, ended in embarrassment for their lawyers, who are among the best-known attorneys in the industry. That trial ended abruptly midstream when GM revealed evidence that the plaintiffs, an Oklahoma couple, had lied under oath and wrongfully blamed GM for the family’s eviction from their “dream house.”

Plaintiffs in all the cases allege GM endangered drivers and passengers by delaying the recall of defective vehicles. Due to a weakness in the design of ignitions switches, jostled keys or a bump from a knee could shut-off the engine, disable steering, brakes and airbags, and leave occupants helpless as vehicles careened out of control.

The case is In re General Motors LLC Ignition Switch Litigation, 14-MD-2543, U.S. District Court, Southern District of New York (Manhattan)

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