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NY Times article with details on the GM compensation fund

As you know by now, GM has announced a limited compensation fund for some of the victims of injuries caused by their defective cars.  I commented on it briefly here.  For more information, here is an article from the New York Times with a few more details.

Illinois Appellate Court reaffirms that there should be no cause of action by (or on behalf of) child against mother for injuries caused by mother during pregnancy

In 1988, the Illinois Supreme Court refused to recognize a cause of action by a child born with injuries caused by the negligence of the child's mother while she was pregnant.  See Stallman v. Youngquist, 125 Ill. 2d 267 (1988).  The court declined to recognize a legal duty on the part of a pregnant woman because the recognition of such a legal duty would create an environment wherein "[m]other and child would be legal adversaries from the moment of conception until birth."  It also reasoned that recognizing such a claim would allow the state to unduly interfere with a woman's right to autonomy during the pregnancy.
In a decision issued about three weeks ago, the Illinois Appellate Court reaffirmed this reasoning in a case that involved a pregnant woman who allegedly negligently caused the death of her own fetus.  Even though, by statute, Illinois recognizes the right of the next of kin to claim for the wrongful death of a fetus, the court found that this right could not be claimed against the mother.  The case is called National Railroad Passenger Corporation v. Terracon Consultants, and (for now) you can find a copy of the decision here.

In this case a pregnant woman was involved in an accident with a train.  As a result she died, which also resulted in the death of her fetus.  After settling claims for the wrongful death of the mother and fetus, one of the defendants sued the mother's estate in contribution claiming the mother's negligence was a cause of the fetus' death.  The plaintiffs then tried to distinguish Stallman by arguing that Stallman was not a contribution claim.  In response, the court correctly affirmed the lower court's dismissal of the complaint based on the principles expressed in Stallman, staing that 

We are not persuaded by the plaintiffs' argument that the public policy considerations discussed in Stallman−which . . .  involved a fetus subsequently born alive−do not apply equally when the fetus does not survive. As the defendants point out, declining to recognize the applicability of the Stallman holding to situations where a fetus does not survive the injuries allegedly inflicted unintentionally by the mother of the fetus would create the paradoxical and potentially unjust situation wherein a fetus that did not survive its injuries could bring a claim against its mother, but a fetus that did survive its injuries could not. We agree with the defendants that duty should not hinge on the nature and extent of the injury involved. The Stallman court declined to recognize a legal duty on the part of a pregnant woman, during her pregnancy, to "guarantee the mental and physical health of another" at birth, because the recognition of such a legal duty would create an environment wherein "[m]other and child would be legal adversaries from the moment of conception until birth." Stallman v. Youngquist, 125 Ill. 2d 267, 276 (1988).  

In accordance with this reasoning, and the other thoughtful and compelling public policy reasoning put forward by the Stallman court ..., we believe the court likewise would have rejected the idea that a pregnant woman has a legal duty, during her pregnancy, to guarantee that her fetus will survive to birth, as that too would create an environment where mother and child were legal adversaries during the pregnancy. Accordingly, although we recognize that the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 2008)) itself does not specifically prevent an unborn fetus from asserting a claim against an allegedly negligent mother, we hold that the recognition of a cause of action for wrongful death asserted by an unborn fetus against the mother of the fetus would be incongruent with the reasoning underlying the Stallman holding that there is no duty on the part of a mother to her unborn fetus. Therefore, we decline to recognize such a duty and such a cause of action.

I think the court here reached the correct result.  It can certainly be argued that pregnant women have a moral duty to exercise reasonable care to prevent injuries during pregnancy, but the question is whether that moral duty should be a legal duty, a violation of which can be vindicated through tort law.  I happen to think Illinois has reached the correct decision on this issue, for the reasons explained in Stallman and in Remy v. Mcdonald, 801 NE2d 260 (Mass 2004).

Record number of car recalls now includes my own!

Just six months into 2014, auto makers have already smashed the record for the most cars recalled in any one year, with 37.5 million vehicles recalled due to defects or safety concerns.  For more on that story go here.

And now that includes my own car!!

I guess this falls in the category of thinking "it can't happen to me...", right?  Well, it did.  I recently got a letter from my car's manufacturer telling me of a problem with the car and letting me know what to do about it.  They will gladly take care of it... and free of charge to boot!

Interestingly, my car is not manufactured by any of the companies that have been in the news because of recalls recently.  So this was a bit of a surprise.  Also interestingly, although not surprisingly, the letter does not mention the word recall in any way.

Chrysler-Jeep has recall issues too

The U.S. National Highway Traffic Safety Administration (NHTSA) released a letter on July 2, indicating that Chrysler dragged its feet in issuing a Jeep recall that ultimately impacted 2.5 million vehicles, and is taking too long to make repairs necessary prevent gas tanks from exploding, suggesting that the delays may have already resulted in four deaths. The letter refers to Jeep Grand Cherokee and Jeep Liberty model SUVs that appear to have a design defect linked to at least 51 fiery crashes over the past three years.  Go here for the full story.

One more problem looming for GM: what did they know back in 2009 during bankruptcy proceeding and other settled cases

A few days ago I commented on GM's proposed compensation fund and, among other things, noted that the fund would not take into account the fact that GM is protected from liability in certain lawsuits as a result f its bankruptcy in 2009.   A new story in Bloomberg from a few days ago suggests there is another reason for this.  According to the story, U.S. Bankruptcy Judge Robert Gerber recently stated in a hearing that plaintiffs in certain cases would have a stronger case if they could prove GM executives knew about the faulty ignition switch problems when testifying during its 2009 bankruptcy.  The judge is quoted as saying that "If they knew about it and intended to keep it from me, that might constitute fraud on the court.”  You can read the story here.  As I suggested in my previous post, GM is not acting out of the goodness of its heart.  It is trying to do damage control.

Meanwhile in a related story reported in the Chicago Daily Law Bulletin on July 3, the family of a woman who died in an accident related to the ignition switch defect is seeking to reopen a case it settled with GM back in October arguing the company committed fraud on the court in that litigation too. GM engineer who designed the switch lied under oath and the company covered it up.  They also argue that the company did not produce relevant documentation during discovery even when ordered by the judge.  It was not until after the case settled that relevant documents were revealed as part of Congressional hearings that the information was discovered.

About a month after that hearing, the plaintiffs filed a motion to reopen the case contending that they would not have settled had they known that the GM witness lied and that the company covered it up.

For obvious reasons, the plaintiffs have said they won’t settle with the recently announced fund administered by Ken Feinberg.  Punitive damages alone could far exceed the previously obtained million settlement.  Plus, the trial could finally bring out the details of GM's knowledge and conduct.

Courts are usually reluctant to reopen lawsuits once they are settled. But the documents now available could help the plaintiff's argument.  Needless to say, if the plaintiffs are successful in reopening the case, other cases could be reopened, and more plaintiffs are likely to take the company to court or expect bigger payments from the compensation fund.  GM should be very worried.

UPDATE (7/27/14):  GM had the case removed to federal court but the court later decided the case should have remained in state court.  For more information go here.

Chart on GM recalls

You are not alone if you have lost count of the many different recalls by GM.  But don't worry, someone prepared a chart.

GM announces compensation fund for some victims of injuries caused by their defective cars

At the same time GM has announced more recalls, it has announced a limited compensation fund for some of the victims of injuries caused by their defective cars. This is not surprising since there had been reports of GM hiring Ken Feinberg some time ago. (See here and here.)
 
I have not read the details of the compensation system so I will limit my comments to the reports I have seen in the press. First, the good news: According to Feinberg (as quoted in this article the day after he announced the compensation fund), the fund will pay $1 million for each death plus a calculation of lifetime earnings lost as well as $300,000 for a spouse and for each dependent. In addition, GM would not hold driver negligence against anyone who files a claim and it will not claim to be protected from having to compensate victims of accidents before its July 10, 2009 bankruptcy restructuring agreement. There will be no cap on the overall amount of money G.M. has agreed to spend on victims’ payments. Even families who have already settled lawsuits with G.M.related to the ignition switch defect would be eligible for payouts (after deducting the amount already received from the total).
 
Obviously accepting compensation from the fund means the victims will waive their right to sue. But this is not necessarily a bad thing if the compensation from the fund is equivalent to, or close enough to, that which the victims would expect to recover in a lawsuit. And, very importantly, Feinberg claims the victims would be able to collect their funds faster than if they chose to go through litigation.
 
This all sounds good, but there is always a catch. First, one thing the claimants give up when giving up their right to sue is the chance to recover punitive damages, which - given what we know now - you would expect would be huge if the cases ever get before a jury. Second, the compensation fund only applies to those who suffered injuries related to the 2.6 million cars recalled in February. When you consider that GM has recalled almost 30 million cars for a variety of defects, the fund actually only covers a small amount of cars and victims. Third, in order to qualify, claimants will have to prove that the defect was the proximate cause of their injury. This will not be easy. Many of the claimants will undoubtedly struggle to collect such evidence because they may no longer have the cars or the paperwork from accidents that took place years earlier. As a result, claimants will have to hire lawyers who will in turn have to gather the evidence necessary to prove their claims (including having to hire experts), all of which will likely result in expenses about as high as those they would incur if they were going to litigate the cases anyway. Finally, to help avoid these costs, Mr. Feinberg has said his team will help people complete their claims. This is the type of conduct that led a federal judge to find that it was misleading for Feinberg to call himself "neutral" or "independent" in administering BP's $20 billion oil spill victim compensation fund and that generated a big debate as to whether he acted unethically in the process. See here, here, here and here.
 
Of course, as is true of most things, the devil is in the details. It is possible the fund will turn out to be a great alternative to litigation and a fair way to resolve the claims. But if the deal sounds too good to be true, it probably is. GM would not be doing this if it did not think it was a great advantage to them in some way. They are not in the business of helping people. They are trying to save money and their reputation. (And a big part of those savings will come in the form of not having to pay for punitive damages.)
 
We will just have to wait and see. Meanwhile, the New York Times seems to be impressed. Here is an OpEd piece praising the compensation fund approach and an Editorial, which praises the program but says GM should do more.
 

Link to my article on strict liability approaches in cases of injuries caused by dogs, particularly by pit bulls

Long time readers of this blog will remember that I have been following the saga that started with the Maryland Court of Appeals decision in Tracey v. Solesky, in which the court changed the elements of a claim based on the fact that the dog in question was a pit bull. The decision generated a lot of debate and, although it took the legislature two years to do it, a bill was finally approved a few months ago to abrogate its holding.
 
I just finished a draft of an article in which I take a closer look at the decision, the different approaches to strict liability in dog cases and the consequences of the recently approved bill.
 
You can acces the full article here. I welcome your comments. Here is the abstract:
 

Two years ago, the Maryland Court of Appeals issued an opinion in a case called Tracey v. Solesky in which it modified the common law of the state related to strict liability in cases involving injuries caused by dogs. Although Solesky was neither a big departure from the applicable law at the time nor an adoption of the alternative, and more prevalent, view in other jurisdictions, the Maryland legislature eventually abrogated its holding entirely. As a result, the current applicable doctrine is a collage of different approaches and it is difficult to see how it protects victims of dog attacks more than they were protected before Solesky. This article reviews the tort law doctrines that operate to manage the costs of injuries caused by dogs and discusses the consequences of the approval of the new statute in Maryland. It concludes that instead of reverting back to the common law predating Solesky, a more careful balancing of the interests involved should have resulted in either adopting the prevalent view in the majority of jurisdictions or in an understanding of how Solesky actually advanced a better public policy than the common law it modified.