GM, Chrysler may dodge liability lawsuits

First, Patrick James lost his 10-year-old daughter in a van rollover crash. Now, he may lose the right to hold the vehicle maker liable.
Chrysler LLC and General Motors are asking the courts to shield them from some product liability claims as part of their bankruptcy restructuring plans. If approved, the financially strapped automakers could not be held liable for injury and wrongful-death claims linked to vehicles sold before the companies were reorganized.
"If our government lets this happen, I will not and thousands of other people will not, have a lawsuit or the opportunity to have our day in court," said James, who runs a non-profit group on van safety out of his home in Knoxville, Tenn.
"That's what's mind-boggling about this whole thing," James said.
James and other consumers who have claims pending against the automakers got a reprieve on Monday when Supreme Court Justice Ruth Bader Ginsburg put a temporary hold on the sale of Chrysler to Italian carmaker Fiat.
But the hold lasted only a day.
The Supreme Court cleared the way for the deal to go forward on Tuesday, rejecting a bid by the consumer groups and three Indiana pension plans to block the sale of most of Chrysler's assets to Fiat. The auto companies and the Obama administration had warned that intervention could have caused the deal to collapse.
GM filed for bankruptcy protection on June 1.
No one has a hard figure on how many product-liability claims are pending against Chrysler and GM, but there are at least 170 suits against Chrysler totaling more than $600 million, said Clarence Ditlow, executive director of the Center for Auto Safety in Washington.
GM paid $1.1 billion in product liability claims in 2007 and $921 million in 2008, according to a filing with the Securities and Exchange Commission.
Consumers with pending suits aren't the only people who will be affected if the companies are shielded against product liability. Future liability suits also would be barred against Chrysler and GM for vehicles sold before the companies were reorganized.
That not only would trample on consumers' rights, it also would leave a lot of accident victims with no legal recourse to recover damages, said Rosemary Shahan, president of Consumers for Auto Reliability and Safety in Sacramento, Calif.
"There are people who have lost family members or who have been paralyzed for life or who have lost limbs," Shahan said. "They often have these huge medical expenses. They want to live independent lives. They have been paralyzed, and they need Chrysler to pay them so they can have a life."
To deny them a chance to hold the automakers liable "just seems cruel," she said.
In James' case, his daughter, Lexie, was killed two years ago when the 15-passenger van she was riding in spun out of control and flipped over four times on Interstate 26 near Columbia, S.C.
The accident happened when a 13-year-old tire on the van separated, causing the driver to lose control. Lexie, an honor roll student, was wearing her seat belt but was somehow thrown from the vehicle. She died at the scene.
James filed a wrongful death suit last year against Chrysler, which built the van, and Michelin North America, which made the tire.
Government tests have shown that 15-passenger vans are more likely than other vehicles to roll over when carrying five or more people. The National Highway Traffic Safety Administration has issued four safety warnings about such vehicles since 2001.
Chrysler stopped making the vans in 2002 because of falling sales but insists they are safe.
James said his suit has never been about money but is about holding automakers accountable and making sure the public knows about vehicle safety hazards. If the companies aren't held liable, "what's going to happen is it's all going to get swept under the rug," he said.
"It's upsetting to me that, if this happens, we won't get our day in court to once again bring light to a very dangerous situation," he said.

(E-mail Michael Collins at collinsm(at)shns.com.)