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Ga. suit still causing trouble for GM



Published: Wed, July 2, 2014 @ 12:00 a.m.

By TOM KRISHER

AP Auto Writer

DETROIT

For more than a year, a lawsuit filed by Brooke Melton’s family has caused major migraines for General Motors.

Litigation over the 29-year-old nurse’s death was settled by GM last October. But not before it laid bare how the company allowed millions of small cars to stay on the road more than a decade after GM discovered ignition-switch flaws linked to at least 13 fatalities.

Now the case could upend GM’s strategy to compensate victims and limit its legal liabilities in such tragedies.

The Melton family lawyers want to reopen the case and show that GM fraudulently concealed the switch problem. If they win, more plaintiffs are likely to take the company to court or expect bigger payments.

Those payments are under the management of one of the nation’s top crisis-compensation experts. GM has hired Kenneth Feinberg to settle hundreds of death and injury claims from crashes caused by the switches. Feinberg, who announced terms of his plan Monday, says there’s no limit on the total amount he can pay. But that total could rise if the Meltons’ lawyers can prove that GM fraudulently hid the switch problem, and other plaintiffs start demanding higher compensation.

The family settled the case for $5 million, but now alleges that a GM engineer who designed the switch lied under oath and the company covered it up.

At issue are the ignition switches in 2.6 million older Chevrolet Cobalts, Saturn Ions and other GM compact cars sold from 2003 to 2010. The switches can slip from “run” to “accessory,” causing engines to stall. That knocks out power steering and brakes, making the cars difficult to control, and it disables the air bags.

The Meltons face some obstacles before they get another day in court. Judges prefer not to reopen settled cases. And GM has moved the case from Cobb County, Ga., to the federal system, avoiding, for now, a judge with extensive knowledge of GM’s conduct.

A look at the case and its impact:

THE CRASH

Just before 7:30 p.m. on a rainy Wednesday in March of 2010, Melton’s 2005 Cobalt went into a spin on Highway 92 near Atlanta. Another car hit the passenger side, knocking it off the road and into a creek. Melton, who was wearing her seat belt, was killed.

At first, police thought she was driving too fast and hit standing water. Facing a legal claim from the other driver, Melton’s family hired lawyer Lance Cooper, who sued GM because Melton’s car had stalled inexplicably a few days before the crash. Sensors in the car showed the ignition switch had slipped into “accessory” just before the accident. The lawsuit alleged that she lost control because the engine stalled.

Through documents provided by GM in pretrial discovery, Cooper determined that engineers knew years before Melton’s crash that the Cobalt’s ignition switch could easily slip out of the run position. But instead of warning drivers through a recall, GM sent dealers a bulletin telling them how to fix the problem — but only if a customer complained.

A ‘BOMBSHELL’ AND A SETTLEMENT

During pretrial depositions, Cooper presented evidence from an engineering expert who found that parts inside Cobalt switches had been changed after Melton’s car was manufactured. The change tightened the switches and made them unlikely to slip out of “run.”

In one deposition, GM engineer Ray DeGiorgio, the lead switch designer, told Cooper that he knew nothing about the changes. Also, he never authorized part maker Delphi Corp. to alter the switches.

Cooper contends DeGiorgio lied under oath and GM’s lawyers concealed it. There should be documentation of such a dramatic change to a part, but GM failed to produce it, even when ordered by a judge, Cooper said. “It’s all part of the cover-up,” he said.

After DeGiorgio’s deposition in May 2013, an attorney representing GM reported the switch alteration to company lawyers, calling it a “bombshell.”

Cooper knew he was on to something. But thinking he was at a legal dead-end to prove a cover-up, he reached the deal for GM to settle with Melton’s parents, Beth and Ken.

A report released by GM last month shows that the lawyer who represented GM warned of a “substantial adverse verdict” in a trial.

SECRET DOCUMENT SURFACES

After the case was settled and GM recalled the cars, congressional subcommittees summoned CEO Mary Barra to Washington. Staffers demanded thousands of documents from GM and parts maker Delphi.

The request unearthed a major problem for GM. Delphi provided a GM Form 3660 from April of 2006 that showed that DeGiorgio signed off on changing the switches but didn’t change the part number, making the alteration harder to track.

At a hearing, Sen. Claire McCaskill, D-Missouri, told Barra that DeGiorgio perjured himself, and also said GM withheld the form in the Melton case, even though legally required to provide it.

“Corporations think they can get away with hiding documents from litigants and there will be no consequences,” McCaskill told her. “I want to make sure there’s consequences.”

Barra replied that if GM withheld a document, it will “deal with” those responsible.

REOPENING THE CASE

About a month after that hearing, Cooper filed a motion in Cobb County, Ga., contending that the Meltons would not have settled had they known that DeGiorgio lied and GM covered it up.

Their lawyers say punitive damages against GM could far exceed the $5 million settlement. And they won’t settle with Feinberg because they want a trial to find out what happened in Brooke’s crash.

“We hope someone during our case will be helped; maybe a life will be saved somewhere,” Ken Melton said.


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