GM Settles Defective Ignition Switch Case With Georgia Family

(RTTNews) - Lawyers representing Ken and Beth Melton, whose claims against General Motors (GM) for the death of their daughter exposed a 10-year cover-up of the ignition switch defect, announced that a second lawsuit has been resolved with a confidential settlement.

Brooke Melton, 29, died in a March 2010 crash when the ignition switch in her 2005 Cobalt slipped into the accessory position as she was driving, causing her car to skid into another vehicle. The initial resolution of her case touched off a national controversy over GM's deception, resulting in $35 million in civil fines, millions of vehicles recalled, Congressional hearings over GM's failures and the National Highway Traffic Safety Administration's or NHTSA lackluster response, and a multi-district litigation or MDL. Among the revelations: GM lied under oath in the original Melton case, prompting her parents to pursue GM again for fraud.

Ken and Beth Melton are hoping that Brooke's death serves as a catalyst to motivate General Motors and other major automakers to address deadly defects promptly, instead of ignoring them, and prevents other needless tragedies. Lance Cooper and his firm in Marietta, Ga., and the Beasley Allen firm in Montgomery, Ala., represented the Meltons.

"One of the most important issues for the Meltons was accountability. This is a company that concealed this defect for years. They wanted to hold GM accountable, and that is what refiling the lawsuit did," Cooper said. "They are grieving parents who simply wanted the truth and for no one else to suffer a similar loss."

The 2010 crash was initially attributed to Brooke losing control of her car on a rainy night. But an investigation revealed the vehicle was equipped with a faulty ignition switch that allowed the key to turn out of the "run" to the "accessory" or "off" position, cutting power steering, anti-lock braking, lights, and disabling the air bags.

After 18 months of discovery and a court order, GM finally produced documents showing that GM engineers first noted the ignition switch problem during the Cobalt's production stage. GM took the defective vehicles to market anyway, and began to rack up complaints almost immediately. GM attempted to "fix" the problem with an October 2005 Technical Service Bulletin, but failed. For the next nine years, dozens of individuals died and hundreds of others were injured by the defective switches.

In September 2013, the Meltons agreed to settle their case with GM for $5 million. At the time, GM admitted knowledge of the defect, but claimed ignorance on the matter of who changed the defective ignition switch design or authorized that change. Five months later, GM announced a recall for a small subset of the vehicles affected by the defect, but told NHTSA nothing about its long history.

On February 19, 2014, the Meltons alerted NHTSA to GM's knowledge of the faulty switch, and requested that the agency open an investigation called a Timeliness Query to determine if GM met its legal obligation to recall a vehicle within five business days of discovering a defect and if the company had failed to recall all of the affected vehicles.

"The fact that Mr. and Mrs. Melton would be willing to take on a corporate giant and end up being directly responsible for alerting both the government and the public to a massive cover-up by General Motors is one of the most courageous things that I've experienced in my career as a lawyer," Jere Beasley, Principal & Founder of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., said.

By April 2014, the Meltons learned that GM knew much more about the defect than it attested to in 2013, and asked the company to rescind the original settlement. The couple offered to return the money, and filed a second lawsuit in State Court of Cobb, County, Ga., charging GM with putting a known defective vehicle on the highway and with fraud in the original lawsuit and settlement.

GM established a victim compensation fund to evaluate claims to determine eligibility and compensation amounts for drivers, passengers and pedestrians killed or injured by one of the defective GM vehicles. As of Febrary 1, GM had received a total of 4,180 claims for compensation, according to Kenneth Feinberg, the fund administrator.

To date, Mr. Feinberg has determined that 64 deaths and 108 other injury claims are eligible for compensation. But for the Meltons' efforts, most of these injured drivers and passengers would not have received any compensation, much less fair and appropriate compensation from GM. Mr. Feinberg took an active role in working with the Meltons' attorneys to settle the claims arising out of the second lawsuit.

The Melton lawsuit also caused the GM ignition switch litigation to move forward in the MDL. In September 2014, U.S. District Judge Jesse Furman, who is overseeing the MDL, ruled against GM's efforts to halt discovery efforts, noting coordinated discovery in the MDL and the Melton case should proceed immediately. The first MDL case is scheduled for trial in January 2016 due in large part to the Meltons' decision to proceed with their second lawsuit.

GM recalled 2.6 million vehicles since February 2014 over problems with the ignition switch. The largest U.S. automaker was aware of faulty ignition switches on Chevrolet Cobalts and other small cars for more than a decade, but it did not recall them until 2014.

GM closed Friday's trading at $38.05, down $0.38 or 0.99 percent. In after-hours trading, the stock further declined $0.05 or 0.13 percent and ended at $38.00.