Bloomberg News

GM Recall ‘Park-It’ Request Weighed by Judge in Consumer Lawsuit

April 04, 2014

A request to force General Motors Co. (GM:US) to tell drivers of 2.59 million recalled small cars to “park it” until faulty ignitions switches are fixed is being considered by a federal judge in Texas.

U.S. District Judge Nelva Gonzales Ramos, at a hearing today in Corpus Christi, is weighing what customers call a “fail-safe solution” to defects linked to 13 deaths, which they say make the cars too dangerous to drive until they’re fixed.

The request for a park-it order was made by plaintiffs in a proposed class-action lawsuit seeking as much as $10 billion for the lost value of Chevrolet Cobalts and other small-car models recalled this year. The automaker (GM:US) is facing lawsuits by car owners or investors in Michigan and California, among other states, as well as lawsuits involving injuries and deaths as it seeks to address criticism it knew of the defect for at least a decade and failed to correct it.

GM Chief Executive Officer Mary Barra fielded pointed questions and accusations from Congress this week, with one senator saying GM had a “culture of coverup” and another predicting it may face criminal liability.

At a Senate hearing on the recall, U.S. Senator Richard Blumenthal asked Barra to warn drivers who were still “behind the wheel of those cars” that they shouldn’t drive them because they were unsafe.

Meeting at the company’s Washington offices with families of accident victims, Barra said the cars can still be driven safely, according to Bob Hilliard, an attorney for plaintiffs in two lawsuits against the Detroit-based automaker who organized the session.

GM has said it faces $750 million in first-quarter charges for recalls of almost 7 million vehicles, including repair costs for ignition and other faults.

The case is Silvas v. General Motors LLC, 14-cv-00089, U.S. District Court, Southern District of Texas (Corpus Christie).

To contact the reporters on this story: Laurel Calkins in Federal Court in Corpus Christi, Texas, at laurel@calkins.us.com. Linda Sandler in New York at lsandler@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Andrew Dunn at adunn8@bloomberg.net Stephen Farr


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