DETROIT -- General Motors last week lost its bid to throw out lawsuits tied to ignition-switch failures before its 2009 bankruptcy. The decision allows hundreds of pending cases to go forward, but it might not significantly increase the automaker's financial hit from the recall crisis beyond the more than $2 billion it already has paid.
The plaintiffs suing GM still have to prove their case against the company, something they have failed to do in all of the so-called bellwether lawsuits that have reached court so far.
GM already has settled matters involving nearly all of the deaths and many of the injuries from crashes that occurred before its bankruptcy, through a $595 million compensation fund administered by lawyer Ken Feinberg. The fund approved claims without considering the date of the accident or negligence by the driver.
The U.S. Supreme Court's refusal to hear GM's appeal of a lower-court ruling means the company's bankruptcy doesn't provide indemnity for the ignition-switch defect, because GM didn't disclose the problem during its bankruptcy filings. However, it doesn't resolve any of the remaining plaintiffs' cases, which involve injuries as well as allegations that vehicles lost value as a result of the defect.
"It gives them a fighting chance, which they would have been prohibited from having before," said Doug Bernstein, a bankruptcy lawyer and partner with the Plunkett Cooney law firm in suburban Detroit. "It gives them potentially a day in court that they may not have otherwise had. They still have to prevail on the merits."
Robert Hilliard, a Texas lawyer who has filed many of the cases against GM, said the Supreme Court's decision to not get involved should help bring "long overdue justice" to his clients and others.
"Now, GM can hide no more," Hilliard said in a statement. "These cases are factually some of the most tragic stories, and also some of the strongest in terms of clear liability of GM's intentional misconduct. Each case will soon be sent back to its local venue and each one will be tried to a verdict."
A GM spokesman said the decision rendered in July by the 2nd U.S. Circuit Court of Appeals "departed substantially from well-settled bankruptcy law." GM plans to address the issues it raised in the appeal as cases are heard in other venues, the spokesman said.
GM recalled more than 2.6 million small cars in 2014 to replace ignition switches that could slip out of place, cutting power to the engine and to airbag, steering and braking systems.