By Amanda Bronstad, The National Law Journal

Hundreds take ignition-switch claims to court.

More than 200 people who were injured or died in accidents attributed to an ignition-switch defect have filed new lawsuits this year against General Motors Co., having found little recourse in a victim compensation fund administered by attorney Kenneth Feinberg.

Most of the more than 40 lawsuits have been coordinated into a multidistrict proceeding in federal court in New York and were filed after a Jan. 31 deadline to submit claims with the fund. GM recalled more than 2.6 million cars and trucks worldwide last year due to the defect, which causes the ignition switch to slip into the accessory position, shutting down electrical power and disabling air bags.

On April 15, GM won a bankruptcy ruling that barred many of the claims brought in class actions filed by consumers alleging economic damages, as well as injury and death cases filed over accidents that occurred before 2009.

But most of these new lawsuits aren’t subject to that decision, and they add to the hundreds of other injury and death cases pending before U.S. District Judge Jesse Furman of the Southern District of New York, who is crafting a plan for the first trials against GM over the ignition switch to begin on Jan. 11.

The new suits also demonstrate the limits of Feinberg’s fund, which compensates only for victims with severe injuries or deaths who were in cars recalled for the ignition-switch defect. The fund does not pay victims alleging defects associated with 30 million cars and trucks that were recalled last year.

Click the image attached for the full chart.

Feinberg has handled compensation funds for victims of the Sept. 11, 2001, attacks and the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

As of April 10, nearly 1,700 claims submitted to the fund for deaths and injuries remained under review or lacked documentation — about 40 percent of all those filed with the fund. Only 241 were found eligible for compensation, while 1,318 were deemed ineligible.

Robert Hilliard, co-lead counsel over the injury and death cases in the coordinated litigation against GM, said some of his clients have been disappointed with the amounts Feinberg has offered, particularly to those with neck and back injuries.

“The fund also has a defect in that it was not designed to treat those who have very short hospital stays but still suffer permanent disabilities fairly,” said Hilliard, a partner at Hilliard Muñoz Gonzales in Corpus Christi, Texas. “A jury will likely award any one of these cases more than the total amount paid to date by Feinberg. ”

Feinberg, in an interview, insisted that only four claimants have rejected offers so far — three of whom were Hilliard’s clients.

As to the pending claims, Feinberg said that claimants have no documentation at all “or they’ve sent us something, and it’s woefully inadequate.” Feinberg, of Feinberg Rozen in Washington, said most people have received a letter requiring more documentation, such as police reports or photographs of the accident.

Feinberg has given claimants extra time. On Nov. 17, he extended the fund’s original deadline of Dec. 31. He said claimants have 60 days to provide documentation and, if they don’t, the fund gives them another 60 days before rejecting their claim as deficient.

But Hilliard said providing documentation is challenging, especially since most victims got rid of their cars without knowing anything was wrong with them. He also took issue with Feinberg’s awards, noting that most people with head and neck injuries were being offered less than $10,000. In general, the fund compensates victims who died or had severe injuries that required hospitalization. But many people with those injuries aren’t hospitalized, Hilliard said.

Feinberg offered another ­explanation for the new lawsuits: “The reason they’re probably filing a lawsuit is because they’re not eligible to participate in the program,” he said. In fact, many of the lawsuits involve cars and trucks that aren’t eligible for compensation under the fund.

Others, however, were brought amid concerns that the statute of limitations to file a suit is about to expire. Under the fund’s rules, victims must waive their right to sue if they accept a payment, but the fund doesn’t toll the statute of limitations until a claim is “substantially complete.” But they can also file suit while waiting for their claim to be processed.

Some lawyers said that they no longer want to wait for a decision from Feinberg. James Bilsborrow, an attorney at New York’s Weitz & Luxenberg who filed a case on March 27, said his client, Melissa Adams, provided additional documentation to Feinberg but hasn’t heard anything since Feb. 15. I think she has a valid claim and the fund should compensate her but don’t know if they will,” Bilsborrow said.

Her 2012 accident occurred in Tennessee, which has a one-year statute of limitations from the date GM acknowledged the defect, he said. “Her statute would run while waiting for a response from the facility, and we didn’t want that to happen.”

Meanwhile, Furman is getting lawyers ready for trial, with depositions of GM employees and additional discovery planned for the coming months. And Feinberg said the fund is expected to wind up by early summer. Feinberg said he’d be surprised if claimants eligible for compensation under the plan, or those ineligible because they didn’t have enough proof, will do any better in court.

“But I wish them well,” he said.

IMAGE: Kenneth Feinberg. Photo: Diego M. Radzinschi/NLJ

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