General Motors LLC, the successor company to the car maker that required a government bailout, is seeking to keep a GM ignition recall lawsuit filed by the Orange County, California district attorney in federal bankruptcy court where the company was first formed.
The company argues that while the district attorney alleges police powers and that in seeking to have the GM recall lawsuit sent back to a federal judge in California, the official cannot cite police powers based on the nature of the action and even if it was, he is bound by the stay issued by the bankruptcy court.
Precedent holds that “when the primary purpose of government lawsuit is to seek money damages or other monetary relief for past conduct, and not to prevent future conduct that could harm the public health or safety, the police or regulatory power’ exception does not apply,” according to the motion.
The district attorney seeks damages on behalf of California residents affected by the GM ignition switch defect as well as injunctive relief, but General Motors writes that the latter is already covered by National Highway Traffic Safety Administration recalls.
The car maker also argues that even if it was sent back to California, the GM ignition recall lawsuit would be put on hold until the bankruptcy court issues a ruling as have many other cases including those that the judge has heard before. The motion also cites testimony regarding the GM ignition switch defect where the district attorney agreed that there would be no action taken.
To the point of the stay in general, the company argues that the judge overseeing the multidistrict litigation has already ruled on GM ignition switch lawsuits that conflate the actions of “Old GM” and “New GM” including “‘used GM vehicles sold on or after July 10, 2009’ — many of which would have been manufactured by Old GM before that date.”
It also cites the judge’s comments from a hearing on a similar case, refusing to send the lawsuit back to another court. He said, “if you want to deal with it the mechanism is going to be by a no stay pleading. Sooner or later your concerns are going to be heard, but the chances of you being allowed to litigate them in another court before I’ve ruled on this issue are about the same as me playing for the Knicks, or in your term it’s the Rockets.”
The GM Ignition Switch Lawsuits affected by the motion are centralized as In Re: Motors Liquidation Co., Case No. 09-bk-50026, in the U.S. Bankruptcy Court for the Southern District of New York.
In general, GM ignition recall lawsuits are filed individually by each plaintiff and are not class actions.
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