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GM Judge Throws Out Key Ignition Claim in Second Trial

March 28, 2016
A federal judge ruled that the driver hadn’t presented enough evidence to show that GM made false or misleading statements about the defect.

General Motors Co. won a partial victory in its second trial over faulty ignition switches as a judge threw out a key fraud claim against the automaker, a company spokesman said, boosting the company’s outlook for resolving hundreds of similar cases on better terms.

A federal judge in Manhattan on Monday dismissed the fraud claim, finding that driver Dionne Spain hadn’t presented enough evidence to show that GM made false or misleading statements about the defect in its cars, the spokesman said. The ruling wasn’t immediately available in court records. The ruling follows an earlier rejection of other claims including a demand for punitive damages.

Jurors at the trial in Manhattan federal court will still weigh whether Spain’s 2007 Saturn Sky had a defect and whether the defect led to a crash on a New Orleans bridge in 2014.

"Dismissing the fraudulent misrepresentation claim was the right decision because there was not sufficient evidence presented at trial to even send it to the jury to decide,” spokesman Jim Cain said in an emailed statement.

GM, which recalled millions of vehicles over the flaw in 2014, admitted using defective ignitions switches for years and hiding it from customers and regulators. But the company is challenging suits that it believes wrongfully blame the flaw for crashes, injuries and deaths.

Criminal Probe

The Detroit-based carmaker has already paid out more than $2 billion to resolve legal issues stemming from the scandal, including $900 million to end a criminal probe by the U.S. government; $575 million to settle a shareholder suit and more than 1,380 civil cases by victims; and $595 million through a victims’ compensation fund outside of court.

An e-mail to lawyers for Spain wasn’t immediately returned.

The first case, selected by the plaintiffs, ended in embarrassment for their lawyers, who are among the best-known attorneys in the industry. That trial ended abruptly midstream when GM revealed evidence that the plaintiffs, an Oklahoma couple, had lied under oath and wrongfully blamed GM for the family’s eviction from their “dream house.”

Plaintiffs in all the cases allege GM endangered drivers and passengers by delaying the recall of defective vehicles. Due to a weakness in the design of ignitions switches, jostled keys or a bump from a knee could shut off the engine, disable steering, brakes and airbags, and leave occupants helpless as vehicles careen out of control.

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Licensed content from Bloomberg, copyright 2016.

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