GM Engaged in Cover Up of Ignition Switch Problems

The law firms handling one of the high-profile lawsuits against General Motors due to its faulty ignition switch allege the automaker actively engaged in a cover up problems that led to the deaths of more than 65 people.

During a news conference on Monday, attorneys for the family of Brooke Melton, who died in 2010 as a result of an accident tied to the faulty switch, said documents produced by GM and the supplier of the switches, Delphi Automotive, under seal, show that high-level executives knew there was a problem with the switches, but declined to do anything about it.

GM declined to comment on the press conference.

Lawyers at The Cooper Firm and Beasley Allen Law Firm, who are representing the Melton family, said investigators turned up documents – emails and transcripts of conversations – that show employees at both companies knew there was a problem, but elected not to do anything about it due to the costs involved at the time.

“They knew it was a safety issue but chose to ignore it,” said Lance Cooper, during a press conference announcing a second settlement agreed to by the Melton family.

Cooper did not provide any details about which executives knew about the problem because the documents were produced under seal.

According to Cooper, those documents were not submitted to Anton Valukas, the former U.S. attorney the automaker hired to investigate the problem. Valukas’ firm, Jenner & Block L.L.C., produced a report – known as the Valukas Report – that exonerated senior GM executives and blamed the problem on poor communication and other factors.

(Bankruptcy judge may rescind GM’s liability shield. For more, Click Here.)

“Valukas chalked it up to incompetence,” Cooper said. “It was a cover-up.”

The Meltons initially agreed to a settlement of $5 million, but when the extent of the problem became public, they filed a second lawsuit against GM. In the suit they claimed the automaker withheld documents vital to their case.

As result, the Meltons and GM reached a second settlement that allows the family to keep the initial $5 million – which they offered to return when they filed their second lawsuit – plus an additional undisclosed sum, Cooper said.

(Click Here for details about the flurry of deadline claims for GM’s compensation fund.)

The two firms still plan to proceed with a class-action suit against the automaker. They expect to begin deposing GM executives in May, they said during the press conference today with an eye toward going to trial early next year.

That trial is just part of a litany of litigation the automaker is likely to be engaged in for the foreseeable future. Several suits have been filed asking that the company’s liability protection granted as part of its bankruptcy in 2009 be eliminated due to this issue. This would open the floodgates for suits ranging from those related to death and injuries to claims for the lost value of the cars with the faulty switches.

Additionally, the Justice Department is engaged in a criminal investigation into the matter. The Cooper Firm hasn’t responded to a query from TheDetroitBureau.com asking if it has been contacted by federal investigators.

(To see more about GM’s compensation fund claims, Click Here.)

The problems with the vehicles resulted in the recall of more than 2.5 million small cars produced by GM’s divisions over a decade. GM established a victims’ fund of $600 million, which is administered by attorney Kenneth Feinberg, to compensate victims and their families for deaths and injuries suffered as a result of the ignitions.

Initially, GM tied 13 deaths to the problem, but that number has grown to 67 deaths and 113 injuries, according to Feinberg, who was involved in the process of reaching the second settlement with the Melton family. There are 133 more death claims the still being investigated by Feinberg and his team.