DETROIT — For more than a year, a lawsuit filed by Brooke Melton’s family has caused migraines for General Motors.
Litigation over the 29-year-old nurse’s death was settled by GM last October — but not before it laid bare how the company allowed millions of small cars to stay on the road more than a decade after GM discovered ignition switch flaws linked to at least 13 deaths.
Now the case could upend GM’s strategy to compensate victims and limit its legal liabilities in such tragedies.
Melton family lawyers want to reopen the case and show GM fraudulently concealed the switch problem. If they win, more plaintiffs are likely to take the company to court or expect bigger payments.
Those payments are under the management of one of the nation’s top crisis compensation experts. GM has hired Kenneth Feinberg to settle hundreds of death and injury claims from crashes caused by the switches.
Using a methodology developed to compensate victims of the Sept. 11, 2001, terrorist attacks, Feinberg rolled out his plan Monday. In death cases, it considers age, annual earnings, and number of dependents. People can opt for quick settlements or they can go to Feinberg with extraordinary circumstances that might warrant more money. There’s no limit on the total amount Feinberg can pay in death cases, and GM has no right to appeal.
But that total could rise if the Meltons’ lawyers can prove GM fraudulently hid the switch problem and other plaintiffs start demanding higher compensation. Other settled cases could be reopened and go to trial, raising the risk of big punitive damages, said Peter Henning, a law professor at Wayne State University.
The Melton family settled their case for $5 million but now alleges a GM engineer who designed the switch lied under oath and the company covered it up.
At issue are ignition switches in 2.6 million older Chevrolet Cobalts, Saturn Ions, and other GM compact cars sold from 2003 to 2010. The switches can slip from ‘‘run’’ to ‘‘accessory,’’ causing engines to stall. That knocks out power steering and brakes, making the cars difficult to control, and it disables the air bags.
In March 2010, Melton’s 2005 Cobalt went into a spin near Atlanta. Another car hit the passenger side, knocking it off the road and into a creek. Melton was killed.
At first, police thought she was driving too fast. Facing a claim from the other driver, Melton’s family hired lawyer Lance Cooper, who sued GM because Melton’s car had stalled inexplicably days before the crash. Sensors showed the ignition switch slipped into ‘‘accessory’’ just before the crash. The suit alleged she lost control as the engine stalled.
Through documents provided by GM, Cooper determined engineers knew years before Melton’s crash that the Cobalt’s ignition switch could easily slip out of the “run” position. But instead of warning drivers through a recall, GM sent dealers a bulletin telling them how to fix the problem — but only if a customer complained.
During depositions, Cooper presented evidence from an engineering expert who found that parts inside Cobalt switches had been changed after Melton’s car was manufactured. The change tightened the switches and made them unlikely to slip out of ‘‘run.’’
In a deposition, engineer Ray DeGiorgio, the lead switch designer, told Cooper he knew nothing about the changes and never authorized parts maker Delphi Corp. to alter the switches. Cooper contends DeGiorgio lied under oath and GM’s lawyers concealed it.
After DeGiorgio’s deposition in May 2013, an attorney for GM reported the switch alteration to company lawyers, calling it a ‘‘bombshell.’’
Cooper knew he was on to something. But thinking he was unable to prove a cover-up, he reached the deal for GM to settle with Melton’s parents. Yet a report released by GM last month shows the lawyer who represented GM warned of a ‘‘substantial adverse verdict’’ in a trial.
After the case was settled and GM recalled the cars, Congress summoned CEO Mary Barra to Washington. Staffers demanded thousands of documents. That unearthed a major problem for GM. Delphi provided a GM Form 3660 from April 2006 that showed DeGiorgio signed off on changing the switches but didn’t change the part number, making the alteration harder to track.
Senator Claire McCaskill, Democrat of Missouri, told Barra that DeGiorgio perjured himself and said GM withheld the form in the Melton case, though required to provide it.
Three weeks ago, GM dismissed 15 employees — including DeGiorgio.
Cooper has filed a motion contending the Meltons would not have settled had they known DeGiorgio lied. Lawyers say punitive damages could far exceed the $5 million settlement. They won’t settle with Feinberg because they want a trial to find out what happened in Brooke’s crash.