Officials with the Department of Justice (DOJ) released information that General Motors (GM) will pay a $900 million fine as part of the criminal investigation into the automaker’s delayed action in reporting its faulty ignition switch. GM covered up the ignition switch problems for more than a decade, leading to hundreds of accidents and injuries. GM has admitted to 124 deaths linked to the defect. GM eventually recalled close to 3 million vehicles affected by the ignition switch defect.
The ignition switch defect affected mostly older model vehicles, particularly the Chevrolet Cobalt and Saturn Ion. The defect allowed the key to move from the “run” position to the “off” position, cutting power and disabling the vehicle’s power steering, power brakes and airbags.
Beasley Allen Principal & Founder Jere Beasley said, “GM’s criminal conduct would never have been disclosed but for the work done by Ken and Beth Melton, the parents of Brooke Melton, who was killed when her Chevy Cobalt crashed. The Meltons set out to find out why Brooke was killed. With the help of Lance Cooper, a lawyer from Georgia, the Meltons learned that the ignition switch in Brooke’s car was the culprit. They sued GM and the criminal acts that caused their daughter’s death were discovered. There would be no criminal fine and no multidistrict litigation (MDL) if the Meltons hadn’t had the courage and determination to act. Our law firm was honored to have been asked by Lance Cooper to join with his firm in the Meltons’ lawsuit and the rest is history. Sadly, the criminal fine is no consolation for all of the hundreds of families who were devastated by GM’s conduct. Somebody with GM should have gone to jail.”
Under the terms of the agreement, released by U.S. Attorney Preet Bharara, GM admits it failed to disclose the deadly ignition switch problem to the public in a timely manner. The DOJ agrees to dismiss two criminal charges, for wire fraud and scheming to conceal material facts from a government regulator, if GM complies with the terms of the agreement for three years. The $900 million fine must be paid by Sept. 24.
Beasley said, “I am afraid the public doesn’t fully realize that GM – a corporate entity – is guilty of a criminal offense, and because of the conduct of GM officers and employees, at least 124 innocent victims were killed. The National Highway Traffic Safety Administration (NHTSA) dropped the ball and GM intentionally covered up for a full decade a known safety defect. In this country, we normally put criminals in jail, but corporations pay huge fines and keep on doing business. Ken and Beth Melton did the work of the government in this matter and they are due full credit for today’s announcement.”
GM already paid a $35 million civil penalty following an investigation by the NHTSA. The company set aside $4.2 billion last year and established a victims compensation fund, overseen by Kenneth Feinberg, which paid victims and their families at least $1 million each if they met the criteria to qualify.