GM faulty-switch cases sent to federal court in New York

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NEW YORK (Reuters) -- A federal judicial panel today ruled that lawsuits against General Motors Co. over economic damages allegedly caused by a recent recall for faulty ignition switches will be heard in Manhattan.

The cases will be sent to U.S. District Judge Jesse Furman in the Southern District of New York, according to the ruling from the U.S. Judicial Panel on Multidistrict Litigation, which considers requests to consolidate related lawsuits in U.S. federal courts.

More than 80 lawsuits have been filed by customers who allege that their cars lost value as a result of the recall, which began in February. GM had asked that the cases be consolidated and transferred to New York, the same district where it filed for and emerged from bankruptcy in 2009.

GM is currently asking the federal bankruptcy court in Manhattan to determine whether claims brought by plaintiffs over the recall are blocked by the terms of its bankruptcy sale order, which created "new GM" and largely barred liability against the new company for the pre-bankruptcy conduct of "old GM."

The order does not affect lawsuits over personal injuries or deaths allegedly caused by the vehicles.

Plaintiffs' lawyers suing the company had also asked that the cases be consolidated but disagreed on where. The forums they suggested were Los Angeles -- where litigation against Toyota Motor Corp. over acceleration issues was transferred -- as well as Miami, New Orleans, San Francisco and Texas.

In its order today, the panel said that the Manhattan district was the most appropriate choice, since it was the same district as GM's bankruptcy, as well as the bankruptcy of Delphi Automotive Plc, a GM supplier that made the switch at issue. Delphi has been named as a defendant in some of the cases.

Several judges in New York, including Furman, "have some familiarity with the common defendant and its prior bankruptcy proceedings," the panel wrote.

The panel, which travels around the country, heard oral arguments on the request in Chicago.

An attorney for some of the plaintiffs, Steve Berman, said in an e-mail that he was "happy to be (in New York), as we hear this judge is terrific."

Representatives for GM and Delphi did not immediately respond to requests by email for comment.

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