The Wall Street Journal reported something very interesting about GM last week.
http://online.wsj.com/article/BT-CO-20120516-718162.html
GM claims it can’t be sued for punitive damages related to product liability issues–cars with defects–before the bailout because the “new GM” can’t be held responsible for something the “old GM” did. By allowing only compensatory damages, most potential plaintiffs will not find it worthwhile to sue. While punitive damages are often excessive, there is no reason that GM should be exempt from paying them while their rivals are not.
A no-punitive-damages clause was written into Chrysler’s bankruptcy deal. The notion of limiting a restructured company’s liability for past wrongs is often negotiated, but only in traditional bankruptcy proceedings. This was not negotiated in the GM deal. Of course, the proceedings were far from typical, with GM receiving a huge government bailout. Nonetheless, GM’s legal staff has decided to claim immunity anyway. I wonder if anyone will stop them.
The hypocrisy here is blatant. You might recall that GM was granted the privilege of counting “old GM” losses against “new GM” profits, another scheme that will cost the taxpayers billions. I guess the “old GM” is ignored when real money is on the line.
This time I agree with you, Dr. Parnell. If GM manufactured defected cars it cannot hide and play the New GM/Old GM game. This is a legal advisers’ trick.
Punitive damages in jury trials are way overdone in this country, but if it’s good for the goose its good for the gander. Leave it to GM to avoid the crap that all other companies have to deal with.