Judge Throws Out Fraud Claim Against GM

A federal judge in Manhattan dismissed a claim that General Motors had made “false or misleading statements about the defect in its cars.”

Judge Jesse Furman did not issue a written opinion, but agreed with GM that the plaintiff in the second lawsuit over the company’s ignition switch controversy, Dionne Spain, hadn’t presented enough evidence to show that the company made fraudulent or misleading statements about the ignition defect.

While the fraudulent-misrepresentation claim was denied, the court will still decide whether the defect in Spain’s 2007 Saturn Sky caused an accident on a New Orleans bridge in 2014.

This is the second major setback for consumers seeking damages from the ignition switch fault. The first “bellwether” case went down in flames when it was revealed that the plaintiffs in that case committed fraud when they blamed GM for the eviction from their home, when in fact the eviction was due to a forged check from a retirement account.

GM has acknowledged that the fault caused 124 deaths, but many more death claims were rejected by their compensation fund, which has so far paid out $595 million.

The company has also paid $900 million in penalties stemming from an investigation by the U.S. government, and $575 million to settle a suit by shareholders and a number of civil cases brought by victims.

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