As Bruce Springsteen once put it, “same old story same old act; one step up and two steps back.” So it goes with auto safety news today.
First, the positive. Longtime PopTort followers will remember our very extensive coverage of the Obama-era GM/Chrysler bankruptcies, and later, the horrendous GM ignition switch defect and cover-up, which led to hundreds of casualties (probably many more). The last time we covered all of that was in 2016, when;
A United States federal appeals court finally said what everyone already knew: In 2009, General Motors’ deceived the lower bankruptcy court – not to mention its own suffering customers – about its lethal ignition switch defect. This was just to avoid compensating customers injured or killed in crashes caused by that defect. And GM should not have been allowed to get away with that.
In other words, this 2nd Circuit decision stripped GM of product liability immunity, which the bankruptcy court had granted it, finally allowing crash victims to sue the company over this lethal defect.
We knew GM would go right to the U.S. Supreme Court for help, so our general feeling was, “it was good while it lasted.” But yesterday, the Court did something kinda extraordinary:
The U.S. Supreme Court let stand Monday a lower court ruling that General Motors can no longer avoid lawsuits from potential victims of ignition-switch defects that came before its bankruptcy.
The Supreme Court declined to consider an appeal from General Motors to keep a legal shield intact from its 2009 bankruptcy that would have protected the automaker.
Writes Bloomberg, “The Supreme Court’s action is a setback for GM Chief Executive Officer Mary Barra, whose first year in the job was consumed by the ignition flaw linked to at least 124 deaths and recalls of 2.59 million vehicles.” GM’s statement indicates that the company will continue to fight these claims in court. (GM, take the advice of the stock analysts. Please stop. Just stop.)
Indeed when it comes to auto safety, events eventually seem to always turn negative. The Attorney General of New York – a guy whom we generally really like – pulled a real head-scratcher yesterday by settling with auto dealers who sell used cars with safety defects. As Consumer Reports writes, this “[n]ew legal settlement means used cars for sale with open safety recalls may become more common.”
On Friday, New York Attorney General Eric Schneiderman announced settlements with 104 car dealerships that sold vehicles with unresolved safety recalls without informing the buyers.
The settlements allow dealers to continue to market and sell used cars with open safety recalls as long as they disclose the issue in their advertising and in showrooms before the sale.
It's the latest wrinkle in a consumer-unfriendly trend that has opened up the sale of more potentially unsafe used cars to the public.
The settlements with the dealerships come weeks after the Federal Trade Commission finalized settlements allowing auto dealer companies to market used cars with unresolved safety recalls, as long as they provide a general statement in advertising that the cars might be subject to a recall.…
Consumers Union, the policy and mobilization division of Consumer Reports, has criticized the settlement. "No company should offer to sell a car that has a defect that hasn't been fixed. It's an irresponsible practice that could put consumers at risk," says William Wallace, a Consumers Union policy analyst. It’s even more deceptive, he says, if the car has been labeled certified pre-owned.
Last year, five U.S. Senators sent a letter to the FTC and the National Highway Traffic Safety Administration, making clear that allowing dealers “to sell used cars subject to open safety recalls ...is a threat to public safety.” Moreover, “this ‘disclosure’ arguably amounts to nothing more than a legal disclaimer that could absolve dealers from their responsibilities and would likely do little, if anything, to meaningfully convey to consumers the existence of an open recall and dissuade them from purchasing such vehicles due to their safety risks.”
And just to tie a neat little bow around this whole mess of a story, among the kinds of defective cars that dealers sell?” GM cars with lethal ignition switch defects. So, a couple big steps back. Take it Bruce!