In Response to GM Ignition Switch Recall, Senate Bill Seeks to Limit Secret SettlementsMay 23, 2014
Two U.S. Senators have introduced a measure that seeks to limit the use of secret settlements in liability suits, Detroit Free Press reports. The measure, known as the Sunshine Litigation Act, was proposed in response to the General Motors' ignition switch recall; according to some senators, GM has entered into secret settlements with some of the owners of the 2.6 million recalled cars that have a faulty ignition switch. The bill would urge federal judges to consider public interest before sealing court records in personal injury and prooduct liability lawsuits.
The faulty ignition switch can place the car out of the “run” position, suddenly cutting power to the engine and disabling functions such as power steering, antilock brakes and airbags. According to the Detroit Free Press, the defect has been linked to 13 deaths and 42 crashes. GM took over a decade to recall Chevrolet Cobalts, Saturn Ions and other models that have the defective switch. According to the New York Times, records show that GM knew about the issue in 2004 but turned down proposals to correct it. The issue is being investigated by Congress, the Justice Department and federal safety regulators.
Senators Richard Blumental, D-Conn., and Lindsey Graham, R-S.C., explained the dangers behind secret settlements in the GM litigation, stating that the “concealment prevented the public, and future GM car owners, from learning about the dangers posed by these faulty ignition switches.” Blumenthal also said that “This legislation would have enabled people to be aware of the threats to safety posed by the faulty ignition switches and deaths could have been prevented,” A maximum fine of $35 million was issued to GM last week for failing to disclose the faulty ignition switch problem sooner.
In some cases, there are protective orders that shield liability settlements from the public. The measure would create a legal presumption that negates this when a judge decides that the health and safety of the public outweigh the secrecy of the settlement. Under the new measure, information discovered in one case would be required to be shared with similar cases. Additionally, a court would not be able to restrict a party in the settlement from disclosing public or safety information to federal or state agencies.