GM Seeks to Extend Winning Streak in Texas IgnitionSwitch Trial

GM Seeks to Extend Winning Streak in Texas Ignition-Switch Trial

Aug. 9, 2016
 A third trial started on August 9 in what could be one of its toughest cases: a Texas teenager arrested for manslaughter in a death later linked to the faulty switch seeks compensation.

General Motors Co. has put two civil trials over its defective ignitions behind it without a loss. A third trial started on August 9 in what could be one of its toughest cases: a Texas teenager arrested for manslaughter in a death later linked to the faulty switch seeks compensation.

“This crash was not caused by a reckless 19-year-old but by a defect GM admits existed,” Zachary Stevens’s attorney Katie Ray told the jury. “The evidence will show not that Zach was reckless but that GM was.”

The company will make its opening statements later.

GM this year won one trial in New York federal court and got the alleged victim in the other to drop his suit after being accused of lying on the stand. The suits filed in state court like the one in Houston tend to be harder to defeat: plaintiffs don’t need a unanimous verdict; judges often allow more evidence; and juries lean towards bigger awards.

The carmaker has said it will argue that Stevens was driving recklessly when he killed another driver. The police report says he was speeding before losing control. Still, after Stevens’s lawyer blamed the crash on the defect, a manslaughter charge was dropped. Stevens is asking to be paid for the cost of his defense in the criminal case and compensation for his injuries. The deceased’s family has already resolved its claim against GM.

More Cases

Even after the settlement of the government’s criminal probe, a shareholder suit and almost 1,800 civil claims over whether GM did enough to address defective ignition switches, hundreds of civil cases remain, leaving open how much the scandal will cost the company.

Already the legal bills have topped $2 billion. Millions of cars were affected, and hundreds more civil cases have been consolidated in New York federal court. Others are in state court cases like Stevens’s.

The Texas judge has said GM can’t tell jurors that Stevens, then 19, was on his way to a substance-abuse recovery class ordered after an arrest for possession of marijuana. A toxicology report showed he wasn’t driving under the influence.

$70,000 Offer

Stevens turned down an $70,000 offer from the GM victims’ fund. That would have covered his parents’ legal bills for fighting the manslaughter case, though not his injuries. His lawyers can tell jurors about the attempted prosecution, but not the settlement offer or GM’s resolution with the deceased driver’s family. And they’ll only be able to say that GM settled the government’s case and what it admitted to, not that it cost $900 million, Stevens’s attorney Josh Davis said before the trial.

Such restrictions are typical as judges try to ensure that nothing prejudicial gets into the trial, said law professor Carl Tobias at the University of Richmond in Virginia.

“The judge is doing all possible to have a clean trial and not allow anything in that might sway the jury inappropriately,’’ he said.

GM recalled millions of vehicles in 2014 over the switch defect, which has been linked to at least 124 deaths and 275 injuries.

In July, the company had mixed luck with the consolidated cases in New York after U.S. District Judge Jesse Furman dismissed many of the claims that cars had lost resale value due to the scandal. That came two days after an appeals court revived suits over hundreds of injuries and deaths that had been blocked by GM’s 2009 bankruptcy.

By Margaret Cronin Fisk and Laurel Brubaker

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Licensed content from Bloomberg, copyright 2016.

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