General Motors received some bad news when the U.S. Supreme Court refused to overturn a lower-court ruling that allows victims of faulty GM ignition switches produced before the 2009 bankruptcy to sue the company for damages.
The automaker cannot hide behind the bankruptcy concept of Old GM and New GM.
The ruling could create billions of dollars in liability, approaching the amount that Volkswagen is paying in the U.S. for illegally modifying diesel engines to pass emission tests.
While there have been no fatalities in the VW case, the company has had to pay huge fines and buy back vehicles from many customers.
GM's ignition switches caused well over 100 deaths, but the company has argued that the liability rests with Old GM and not the current company.
The company did set up a $595 million compensation fund administered by lawyer Ken Feinberg and has resolved claims involving nearly all of the deaths and many of the injuries from crashes that occurred before its bankruptcy.
But the courts have ruled that the remaining plaintiffs can sue GM and that the company cannot hide behind the bankruptcy. So there will be plenty of opportunities for victims to prove whether GM personnel were well aware of the defect. There will likely be many trials, with huge potential losses for GM.
There has been a cloud over whether GM executives knew of the problem and chose to do nothing. Certainly, with many cases possibly going to trial, the potential of discovery through depositions becomes quite high. It will be interesting to see what the new investigations turn up.
The company has been able to hide behind the bankruptcy for many years. Now it appears there will be an opportunity to find out what happened during this very long period when the defective switches continued to be manufactured and installed in vehicles.
The high court's ruling will have far-reaching consequences. The trials may finally reveal responsibility for these deaths.