McCaskill questions whether secret settlements obscured extent of GM’s ignition switch problems

Sen. Claire McCaskill (D-Missouri). SOURCE: commerce.senate.gov

Although General Motors had known about problems with its ignition switches suddenly turning off as early as 2003, it took the company more than a decade – and after at least 13 deaths – to take steps to fix the problem.

GM finally issued a recall of more than 2 million vehicles earlier this year largely thanks to evidence uncovered by a trial lawyer representing the family of Brooke Melton, a 29-year-old pediatric nurse who was killed when her 2005 Chevy Cobalt suddenly lost power on a highway in Atlanta in March 2010.

During the litigation, Melton’s attorney, Lance Cooper, with the help of an expert engineer, identified the ignition switch defect due to low torque and exposed GM’s cover-up of the problem by changing to a new switch with a higher torque in 2006 but using the same part number as the defective switch.

At the hearing before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance, Sen. Claire McCaskill emphasized the critical role Cooper played in “exposing a serious safety issue with a product – work that should have been done by GM and…by federal regulators.”

McCaskill wondered if other litigants had discovered the defect, like Cooper, but were prohibited from disclosing them to the public  due to confidentiality clauses in their settlements. McCaskill, a former prosecutor, questioned whether GM had used confidential settlements to mask the true extent of the ignition switch problem.

“Why are they [GM] requiring confidential settlements?” asked McCaskill. “I think that is something that we need to understand because it is in fact of those confidential settlements that many of these problems do not get the light of air that they should.”

Below is the exchange between McCaskill and GM CEO Mary Barra on the company’s litigation practices:

Sen. Claire McCaskill (D-Missouri):
Ms. Barra, how many lawsuits relating to the defect both pending and closed as well as settlements has GM been a defendant or a co-defendant?

Mary Barra, CEO of General Motors:
I don’t have that information. I can provide it to the committee.

Sen. Claire McCaskill (D-Missouri):
I’m assuming you’ve had some briefing from your counsel about your exposure on this defect?

Mary Barra, CEO of General Motors:
We have not talked about exposure. We have – it’s very important once we realized this situation we immediately hired Anton Valukas. We don’t want to have multiple investigations. We thought it was most important to have –

Sen. Claire McCaskill (D-Missouri):
I’m not asking about investigations. I’m saying as the CEO of General Motors you have not had a briefing by your General Counsel about the litigation that is ongoing against your company concerning this defect. You’ve not had that conversation?

Mary Barra, CEO of General Motors:
I’ve been focused on getting the parts for customers.

Sen. Claire McCaskill (D-Missouri):
We would like to know how many cases have been filed. We would like to know how many cases have been completed. We would like to know how many are settled. And most importantly, how many of those required confidentiality? How much whack-a-mole has been going on in terms of trying to deal with these lawsuits on a one-off basis and leveraging what a lawyer wants to do for their client with the requirement of secrecy.

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