The report issued last week by Jenner & Block's Anton Valukas helped answer a lot of lingering questions concerning General Motors's ignition-switch problems.It also could help a lot of plaintiffs' lawyers looking to go after the company for financial losses, injuries and deaths.
Already, the company's size and self-confessed failures the report are attracting lawyers who forged some of the biggest civil settlements ever, from the landmark tobacco litigation to the Exxon Valdez disaster to Toyota Motor Corp.'s unintended-acceleration problems.
More than 80 ignition-switch-related civil lawsuits have been filed against GM, most seeking alleged economic damages, such as repair costs and declines in resale value on about 2.6 million cars recalled since February.
The company also will have to fight suits claiming the defective ignition switches caused serious injuries and deaths. While just a handful of cases are under way, lawyers say hundreds more could follow.
Chief Executive Mary Barra said Thursday that she wouldn't "speculate on anything involving litigation," and that the company would "do the right thing by victims."
But last week, Ms. Barra said the report demonstrated a "pattern of incompetence and neglect" in the auto maker's 11-year failure to recall cars equipped with a defective ignition switch.
Those statements, and other details embedded in the Valukas Report, have grabbed the attention of some high-powered plaintiffs' lawyers, including Elizabeth Cabraser, Mark Robinson, Steve Berman, and others.
One section of the report detailed an outside law firm's concerns about the company's legal exposure. In 2010, King & Spalding LLP advised GM to settle a wrongful-death suit filed in Tennessee, warning that "facts and circumstances surrounding the investigation...could provide fertile ground for laying the foundation for an award for punitive damages, resulting in a significantly larger verdict."
The defense strategy by GM includes a compensation program that will be launched in August and led by Kenneth Feinberg, the lawyer who managed the U.S. government's September 11 Victim Compensation Fund.
GM hasn't said how much money it will put into the fund. Victims and their families who file claims could get a check from the company, but they likely would have to agree not to seek damages from GM in court.
Some plaintiffs' lawyers said they are willing to consider the compensation fund once GM discloses more details. "We'll pursue the avenue by which our clients are going to be best served," said Adam Levitt, a lawyer in Chicago.
GM lawyers are trying to use the auto maker's bankruptcy in 2009 to insulate the company from depreciation-related claims before then. Plaintiffs' lawyers claim that would violate constitutional due-process rights, since GM allegedly knew about the ignition-switch problems but kept them secret for years.
U.S. Bankruptcy Judge Robert Gerber in New York is expected to rule by the end of summer.