GM to face barrage of customer lawsuits in New York

June 9, 2014, 6:24 PM UTC
GM CEO Mary Barra Testifies To House Hearing On The Company's Ignition Switch Recall
WASHINGTON, DC - APRIL 1: General Motors CEO Mary Barra testifies before the full House Energy and Commerce hearing room in a hearing entitled "The GM Ignition Switch Recall: Why Did It Take So Long?" April 1, 2014 on Capitol Hill in Washington, DC. The committee is hearing testimony on a safety defect that's been linked to at least 13 deaths and has sparked a 2.6 million-vehicle recall. (Photo by Allison Shelley/Getty Images)
Allison Shelley—Getty Images

General Motors (GM) fired 15 employees after releasing the results of an internal probe last week, but the legal ramifications of that report are just about to start playing out in court.

The automaker has already seen an onslaught of civil lawsuits related to the faulty ignition switch issues at the heart of the delayed recall that spurred the company’s internal investigation earlier this year. On Monday, the U.S. Judicial Panel on Multidistrict Litigation granted GM’s request to consolidate several dozen civil lawsuits filed against General Motors by customers who allege the company’s February recall of 2.6 million vehicles caused their cars to lose value. The panel said in its order that the consolidated cases will be heard in the Southern District of New York by federal judge Jesse Furman.

Auto parts supplier Delphi Automotive (DLPH), a former GM subsidiary that supplied the company with the faulty ignition switches, is also a defendant in the consolidated lawsuits. The judicial panel noted in its decision that New York is an appropriate venue for the cases considering that both GM and Delphi emerged from bankruptcy in that district in 2009.

“Several judges in this district, including Judge Jesse M. Furman, have heard appeals related to General Motors’ bankruptcy and, therefore, have some familiarity with the common defendant and its prior bankruptcy proceedings,” read the decision from the seven-judge panel.

More than 80 civil lawsuits have been filed by GM customers alleging that the value of their vehicles suffered as a result of the company’s actions, with claims potentially ranging from $500 to $1,000 for each car, according to the Wall Street Journal, which reported over the weekend on the large pool of plaintiffs’ attorneys taking aim at the company. Reuters added in a report on Monday that GM has asked the federal bankruptcy court in Manhattan to rule on whether or not the company is liable for actions occurring at GM before it emerged from bankruptcy five years ago, based on the terms of the company’s bankruptcy settlement.

The civil lawsuits are not connected with various wrongful death or personal injury claims brought against GM as a result of the 13 deaths and dozens of injuries caused by the defective switches. In one case, the family of a woman killed in one of the affected vehicles has asked a Georgia state court to nullify its previous settlement with GM so they can refile their lawsuit in light of information in the internal probe showing that GM employees were aware of the faulty ignition switches years before the recall was ordered.

The botched recall also resulted in GM paying a record $35 million fine to the U.S. Department of Transportation, while last week’s internal probe results also led Fortune to posit that GM could potentially be charged with manslaughter in connection with the deaths.