General Motors now faces up to $10 billion in additional defective ignition switch claims, because the Supreme Court rejected the automaker’s final appeal.
Previously, GM lawyers tried to convince a federal appeals court that because of the company’s 2009 bankruptcy filing, the “new GM” is not liable for the negligent acts of the “old GM,” which included installing defective ignition switches into millions of vehicles. Furthermore, they claimed, the automaker recalled 2.6 million vehicles and set up a $600 million victims compensation fund, which should have sufficiently put the matter to rest. However, the Second Circuit Court of Appeals was unpersuaded, ruling that the “new GM” should have known about the issue long before the company went public with the defect, and so in this instance, bankruptcy did not absolve the company of liability.
Defective ignition switches on GM vehicles have been associated with more than 120 fatalities.