by John Pacenti
jpacenti@alm.com
Florida has jumped into the fray of lawsuits filed against General Motors Corp. for recalls of 2.6 million vehicles with potentially faulty ignition switches blamed for crashes and at least 13 deaths throughout the country.
Podhurst Orseck of Miami and Higer, Lichter & Givner of Aventura filed the class action lawsuit Monday on behalf of Maria Elena Santiago as General Motors CEO Mary Barra faced two days of grilling by congressional committees on the recalls.
Six similar lawsuits have been filed around the country, said attorney Peter Prieto, a partner at Podhurst Orseck. Some of the cases are economic loss claims, such as Santiago’s, others are for wrongful death and personal injury.
“What makes this case unique and wrong is they concealed it for a long time,” Prieto said. “They knew this switch was defective for almost a decade and they failed to disclose the problem.”
GM’s own records indicate the automaker failed to take appropriate measures because of costs, he said.
It’s very possible a multidistrict litigation will be requested to consolidate cases for pretrial matters.
The new case has been assigned to U.S. District Judge Kathleen Williams in Miami. It claims fraud by concealment, violation of the Michigan Consumer Protection Act and violation of the Florida Unfair and Deceptive Trade Practices Act.
Santiago, a Miami resident, drives a 2007 Saturn Ion and had an incident three years ago where her car stalled as she was moving onto a highway. She maneuvered off to the side and got the car restarted.
The lawsuit seeks damages for the loss in value of the vehicle.
“Her car is valued a lot less because of this dangerous defect,” Prieto said. “It would be very difficult for her to resell it now.”
After emerging from Chapter 11 bankruptcy in 2009 with the help of the American taxpayer, the Detroit carmaker was on the mend financially.
The initial recall was announced in February, and GM announced this week another 1.2 million vehicles would be recalled for a problem with power steering.
GM has recalled vehicles worldwide because the defective ignition switches might cause engines to stall and prevent air bags from deploying in crashes.
GM spokesman Greg Martin said in a statement last week to the National Law Journal, an ALM affiliate of the Daily Business Review: “We deeply regret the circumstances that led to the recall. We have launched an internal review to give us an unvarnished report on what happened and to improve our processes so our customers do not experience this again.”
On the congressional inquiries, experts on corporate damage control said Barra didn’t have much choice but to make the most of the situation and gave her high marks for her performance on the hot seat.
“Barra’s rope-a-dope is the best of GM’s bad options today,” said Washington crisis management consultant Eric Dezenhall. “There isn’t a corporate lawyer in the country that’s going to allow her to engage in freelance speculation about things she doesn’t know yet. No, that’s not satisfying to the public and media, but the alternative is much worse.”
The Associated Press contributed to this report. John Pacenti can be reached at (305) 347-6638.
