Another GM Recall Class-Action Lawsuit: What Happens Next? - Injured
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Another GM Recall Class-Action Lawsuit: What Happens Next?

Yet another GM recall class-action lawsuit has been filed in federal court, with more than 600 plaintiffs alleging injuries and deaths due to the car manufacturer's faulty ignition switches.

The suit was filed by a Corpus Christi, Texas-based law firm, based largely on crashes that occurred after GM's bout in bankruptcy court in 2009. Attorney Robert Hilliard told The Associated Press that this makes the suit exempt from GM's attempt to shield itself under bankruptcy law.

What should you know about this most recent class-action lawsuit, and what happens next?

Class Action for Injuries, Deaths

This certainly isn't the first legal shot fired in the melee that is GM's ignition switch recall nightmare, but it has its own unique quirks. Like many prior lawsuits, it claims that GM knew about the defective switches as early as 2001, yet failed to recall the affected cars until 2014 -- recalls which are expanding just about every month.

However, unlike many of the other cases, the latest suit focuses on deaths and injuries which occurred in ignition-switch defect-bearing vehicles after 2009. Why the importance of the time distinction? It's because GM was reorganized via bankruptcy back in 2009, creating a legal divide between the "old GM" and the current, post-bankruptcy GM.

GM has argued that this prevents the current GM from inheriting the legal sins of the "old GM," and that all claims involving "old GM" should be handled in federal bankruptcy court. This new suit attempts to sidestep that argument by only focusing on injuries and deaths which occurred after the 2009 bankruptcy, which were allegedly caused by the ignition switch defect. The AP reports that in the lawsuit, 29 plaintiffs are alleged to have died because of this defect, and 629 are claiming injury.

Other Pending Suits

Many of the other class-actions pointed at the car manufacturer for the ignition-switch defect are based on purely economic damages. In these cases, plaintiffs allege that by not recalling the affected cars sooner, GM caused vehicle owners economic damages from lack of use and diminished resale value.

What's Next for GM?

As more and more lawsuits begin to pile up in New York federal court, GM is faced with a tough situation. It's also currently under investigation by the federal government for potential criminal action related to the recall, and the findings may be dynamite for any pending civil cases.

Unless these suits and probes are not settled soon, GM may be cruising for another bankruptcy.

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