First GM ignition-switch lawsuit is dismissed amid perjury allegations

NEW YORK (Bloomberg) -- The Oklahoma mail carrier at the center of the first trial over General Motors' deadly ignition-switch defect is dropping his claims after being accused of lying to the court.

Robert Scheuer, 49, will walk away from the case empty-handed, ending a lawsuit that was supposed to serve as a guide for hundreds of others against GM over the ignition switch, his lawyer said in a filing today in U.S. District Court in Manhattan.

Scheuer had sued over claims the defective switch in his 2003 Saturn Ion disabled his airbag in an accident, leading to neck and back injuries. But the case collapsed after GM found evidence undermining several claims, including the extent of his injuries and details surrounding his family’s eviction from their “dream house” after the wreck. 

"I really do commend you for doing the right and sensible thing," U.S. District Judge Jesse Furman told lawyers for both sides during a brief hearing today, before excusing the 12 jurors hearing the case.

Furman on Thursday granted GM’s request to show jurors evidence that Scheuer and his wife, Lisa, had fabricated the story blaming GM for their eviction about four months after the accident. The judge said the new evidence would probably be “devastating” to the case. 

'Apparent lies'

“The apparent lies the plaintiff and his wife told the jury ended the trial early, and we are pleased that the case is over without any payment whatsoever to Mr. Scheuer,” GM spokesman James Cain said in a statement.

GM claimed Scheuer had doctored a federal-government check stub to provide “proof of funds” to move into the family’s new home. When the real estate agent found out, the family was evicted, the carmaker said. GM said the real estate agent had come forward after the trial started, and that the company had extensive evidence that it had nothing to do with the family’s financial troubles.

Scheuer and his wife both hired criminal-defense attorneys this week after the carmaker accused them of lying.

The case was chosen as the first for trial by Robert Hilliard and Steve Berman, two of the top plaintiffs’ lawyers in the U.S., who are leading the ignition-switch litigation. They haven’t denied the allegations of forgery and perjury against their client.

'Way past unusual'

Hilliard called the development "unexpected and stunning."

"El Nino is unusual," he said Friday. "This is way past unusual." Still, he said he thought Scheuer had a "strong shot" at winning his case before the recent developments.

"To have any trial end in such an unexpected and unfortunate way is disappointing, especially given the time and effort we put into getting ready,” Hilliard said. “There are legitimate concerns about the safety of this vehicle as a result of this defect. A jury needs to decide, and that’s unrelated to a dream house issue. The next jury will have that opportunity."

Furman said on Thursday if GM's account of the misleading testimony is correct, it might show that the "plaintiff and perhaps his wife have committed a fraud on this court."

GM recalled 2.59 million cars due to the defect and has already paid more than $2 billion in legal costs and settlements. Despite GM’s admissions, the company is challenging liability in hundreds of individual cases.

Bellwether cases

The Scheuer trial was the first of six bellwether ignition-switch cases intended to help the carmaker and thousands of motorists in possible settlements and other litigation after GM admitted the flaw affected millions of vehicles.

In the bellwether system, each side chooses representative cases for alternating trials. Now the attention will turn to one picked by GM.

It was filed by plaintiffs who claim they were injured in a January 2014 crash on an icy bridge in New Orleans. GM is already hinting at its defense in that case, which is set for trial in March.

Other accidents 

At least 38 other vehicles “had accidents on the same bridge that evening due to black ice weather conditions,” Cain said today. “This was a very low-speed crash and there is no claim about airbag non-deployment. Rather, the claim is the switch rotated causing a loss of control.”

Furman said it had become clear that Scheuer's case was an "outlier," and that a verdict was unlikely to yield important information about the litigation as a whole.

“Plaintiff’s counsel picked the wrong plaintiff and didn’t vet him well enough to catch huge problems with using him in a bellwether. The judge cannot be amused,” said Erik Gordon, a business professor at the University of Michigan who isn’t involved in the case.

Another lawyer involved in ongoing GM litigation today criticized the selection of the Scheuer case as a bellwether.

"The case selected as the bellwether case for trial should never have been filed, much less selected as the case to try in the MDL (GM multidistrict litigation)," Jere Beasley, principal and founder of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., said in a statement.

"While the MDL is dealing with some issues on a single case, we have made sure our GM clients’ cases are moving forward successfully. We feel confident we’ll be able to represent them effectively despite problems that may arise in other cases along the way."

Bloomberg, Reuters and Automotive News contributed to this report.