GM Settles Ignition Switch Lawsuit
General Motors (GM), the nation's largest automaker, settled a second lawsuit brought by the Melton family alleging that the company failed to fix ignition problems that it knew had caused accidents and deaths. This is a victory for GM because it removes the possibility that GM's senior officers, including CEO, Mary T. Barra, will be questioned under oath for the failure of the company to recall defective vehicles.
The Melton family settled an initial lawsuit two years ago for $5 million after GM's official admitted that the company had been having issues with defective ignitions for at least ten years. The family filed this initial suit after Ms. Melton died after she lost control of her 2005 Chevrolet Cobalt when the ignition key slipped into the accessory position, which shut down the car's engine power and disabled the car's airbags.
During depositions during the first lawsuit, the Melton's discovered that GM had secretly upgraded its switches without changint he part's identification number. By doing this, it became difficult to discover the cause of accidents that caused death and injuries. This discovery led to GM's recallinng of approximately 2.6 million cars closting about $3 billion to recall and compensate accident victims. Congressional investigation and other government inquires followed shortly thereafter. The company was fined $35 million by federal regulators for failing to fix the defect in a timely manner.
This lawsuit was instrumental in uncovering how GM had failed to fix its faulty ignition problems despite knowledge about accidents caused by sudden losses of power. It led to widespread changes within GM, including the dismissal of 15 employees, a change in its engineering organization and the implementation of a new safety department.
It was after this that the Melton's filed their second lawsuit, which was to force GM to admit that they had concealed evidence of the ignition problem. It is this lawsuit that is being settled now.
The terms of the settlement agreement have not been disclosed. The settlement to the Melton family is being paid by GM's compensation program, which allows accident victims or their families to file claims even if they had received prior settlements from the company. But there is a catch--victims or their families cannot pursue a lawsuit once they have been compensated through the program.