Articles Posted in Products Liability

The National Law Journal has this article on the future of products liability claims against Chrysler and GM.   The United States Supreme Court has not yet ruled on the petition of consumers and plaintiffs’ lawyers concerning the Chrysler bankruptcy.

Chrysler has 160 pending cases and GM has about 300.

Here is an article from The Hill that gives more information on how existing products liability claims against GM and Chrysler will be handled.  Bottom line:  claimants will be unsecured creditors, and will be thrown into the pot with all of the other unsecured creditors.

Of course, to the extent that the claims are covered by insurance, and the insurance company is still viable, the money should be paid.  The problem, of course, is that the self-insured retention for these companies is quite high (I don’t know how much) and thus those able to prove their claims will be in the unsecured creditor pool for the retention amount and can only look to the insurance company for excess amounts.

For my other posts on this subject look here, here, and here.

Here is an interview with two plaintiffs’ lawyers who are actively involved in seeking monies for tort claimants who have claims against Chrysler and General Motors.

I have also included an article from www.HispanicBusiness.com that says "Fiat will be protected from any product liability lawsuits arising from claims of flaws in Chrysler vehicles sold before the sale’s closing later this month. Anyone filing such lawsuits will be able to recover only from the limited assets of the old company."

Finally, here is the point of view of a claimant as published in the Daily News.

I have read Judge Gonzalez’s Order of June 1 concerning the sale of substantially all of the assets of Chrysler to Fiat, and it certainly appears to me that the sale will cut off  future products liability claims. 

Here is the key language Pages 42 – 44 of  the Court’s Order.

Category (3) consists of tort and consumer objections. Those objections relating to  lemon law and warranty claims have been resolved by the modification of relevant language in the Fale order. An objection (ECF Docket No. 1231) was raised regarding an environmental claim, but the property to which the claim related is no longer owned by the Debtors and the objection is therefore overruled. Various objections were raised related to property damage claims and personal injury and wrongful death claims, including those which have not yet occurred. Some of these objectors argue that their claims are not “interests in property” such that the purchased assets can be sold free and clear of them. However, the leading case on this issue, In re Trans World Airlines, Inc., 322 F.3d 283 (3d Cir. 2003) (“TWA”), makes clear that such tort claims are interests in property such that they are extinguished by a free and clear sale under section 363(f)(5) and are therefore extinguished by the Sale Transaction. See id. at 289, 293. The Court follows TWA and overrules the objections premised on this argument. Even so, in personam claims, including any potential state successor or transferee liability claims against
New Chrysler, as well as in rem interests, are encompassed by section 363(f) and are therefore extinguished by the Sale Transaction. See, e.g., In re White Motor Credit Corp., 75 B.R. 944, 949 (Bankr. N.D. Ohio 1987); In re All Am. Of Ashburn, Inc., 56 B.R. 186, 190 (Bankr. N.D. Ga. 1986).

If you are breathing and can read, you know that Chrysler has filed a Chapter 11 bankruptcy petition.

I am not a bankruptcy lawyer.  I am not a corporate lawyer.  But the filing has some immediate consequences readily apparent to the reasonably prudent tort lawyer.

1. Pending Cases.  All tort cases against Chrysler will be stayed by the filing of the petition.  In the short-run, it will bring all action in those cases to a halt, even if suppliers and other defendants are parties to the case.  In the coming months, motions will be filed to permit the action to proceed against the non-Chrysler defendants and those issues will have to be sorted out.  Cases on appeal will also be stayed for some period of time.  People who have unpaid judgments against Chrysler will not be able to collect on those judgments.  Plaintiffs  who have judgments on appeal secured by surety bonds will be able to collect from the surety bond issuer if they are successful on appeal,  but the appeal will be stayed in the short-run.  Plaintiffs  who have judgments on appeal that are not secured by a surety bond will be general, unsecured creditors if they are successful on appeal.  Some effort will be made to have some money set aside from Chrysler’s assets to pay pending judgments and pending claims.  How much will be paid on the dollar value of those judgments and claims?   By what process will the valuation of the pending claims be determined?  All of that remains to be seen.    Some of you may ask:  Chrysler has liability insurance, doesn’t it?  Yes, but the self-insured retention is very high. 

A mentally retarded 13-year old girl has been permitted to purse a claim against a sperm bank that sold her mother sperm 14 years ago.  She has claimed that the sperm had a genetic defect that caused her mental retardation.

The case is Donovan v. Idant Laboratories.  Read more about the case here.

Thanks to Jonathan Turley for informing me of the opinion.

Here is a list of the peanut and peanut butter products that have been recalled.

Please don’t rush to New York and file a lawsuit over yesterday’s crash. 

There is no reason to inject a lawsuit into the middle of the celebration over the wonderful outcome from what could have been a horrific tragedy. 

So, don’t embarrass plaintiff’s lawyers or the legal system by an immediate filing of suit.  Take a deep breath.  Discover some facts.  Talk to potential defendants and try to work something out before running  to the courthouse and trying to grab the spotlight. 

The Department of Transportation has a site dedicated to car safety.  The site gives information about safety recalls, defect investigations, and early warning reports.

Want to learn more?  Go here.