GM Mediator Crash Payouts

A plan recently developed for General Motors (GM) by Mediator Kenneth Feinberg, who previously helped develop terms following the 9-11 terror attacks, BP oil spill and multiple shooting incidents, will provide compensation for people killed in accidents caused by faulty ignition switches. Under the guidelines, families will be offered $1 million for the death of the victim, plus $300,000 for the surviving spouse and $300,000 for each of the victim's surviving dependents. Those payments are intended to cover non-economic losses, such as emotional distress. Claimants in the case can choose options for economic losses and look at the victim's previous earnings, benefits, age and household to determine how much should be awarded, including a victim's past, present and assumed future income. The protocol takes effect August 1. GM has launched a website that describes the plan-- www.gmignitioncompensation.com. Victims submitting personal injury claims are being compensated for economic and non-economic losses on a sliding scale, from $500,000 if they were hospitalized for at least 32 days, down to $20,000 for one overnight hospitalization. Eligible claimants who were physically injured in an accident related to the ignition switches but not hospitalized overnight will receive up to $20,000 for medical treatment. The compensation plan also notes that, "because the physical injuries are so vastly different, and have significantly different long-term effects," each major injury claim will be evaluated to establish non-economic loss. Lawsuits against GM claim a death toll of around 60. The U.S. Department of Transportation already fined GM $35 million for the safety issues related to the delayed recall. See news story here-- http://cbsn.ws/1qgPuzY

ADR Bars Fees in Auto Defect Suits

Congress in 1975 set forth a policy to encourage warrantors to establish procedures whereby consumer disputes could be fairly and expeditiously settled through informal dispute settlement mechanisms under the Magnuson-Moss Act. Apparently, this was not successful enough in resolving consumer disputes regarding chronically defective automobiles. Consequently, many states enacted Lemon Law legislation to address perceived problems. Use of Better Business Bureau's (BBB) Auto Line is required prior to filing suit under the Magnuson-Moss Act, but is not a prerequisite to an action under the Lemon Law. A three-judge panel of the Superior Court of New Jersey’s Appellate Division recently ruled in Nissan’s favor, stating consumer claimants were not eligible for attorneys’ fees as a matter of law because they were bound to an alternative dispute resolution process as a term of their warranties. Claimants signed away their rights to pursue civil actions by accepting arbitration decisions. BBB Auto Line requires aggrieved consumers to mediate the claim first, then proceed to arbitration if the mediation process proves unsuccessful, with the consumer given a choice between an impartial arbitrator or a three-person panel. Plaintiffs were sent to Auto Line after first trying to circumvent that forum with civil suits. While successful in getting Nissan to repurchase the defective vehicles, the arbitrator did not award attorneys’ fees-- prompting new suits and an appeal when trial judges dismissed those suits. The appellate panel found that Plaintiffs were not entitled to attorneys’ fees because of their participation in the ADR process and signatures on settlements that waived legal action related to the same claim. Plaintiffs were not bound to accept the informal dispute settlement decision, but neither rejected the award of repurchase in favor of initiating legal action with the hope of collecting attorneys' fees. It was found the absence of an attorneys' fees award neither violates statutes nor offends public policy. See story here http://bit.ly/1aLYWH7 and opinion http://www.judiciary.state.nj.us/opinions/a6034-11a0116-12.pdf

"Imported from Detroit" Mediation

In a countersuit of sorts stemming from clothing company Pure Detroit's use of "Imported from Detroit," the T-shirt maker in Michigan sued Chrysler, claiming that Chrysler's campaign amounts to false advertising since the featured vehicles are built elsewhere. U.S. Magistrate Judge Hluchaniuk has given the parties until April 3rd to report on whether a mediation session is successful. Apparently, the Chrysler 200, 300 and Town & Country aren't built in Detroit. The automaker sued the T-shirt company last year over its use of the phrase first used to promote Chrysler 200 during Super Bowl in an ad featuring Eminem. Chrysler has a website to sell clothing and other products with the "Imported From Detroit" logo and that merchandise isn't being made in Detroit, either. Chrysler says it donated proceeds of its sales of the merchandise to several Detroit charities. U.S. District Judge Tarnow previously refused to grant a preliminary injunction blocking the sale of the shirts by Pure Detroit. Often the outcome of early motions for injunctive relief can prompt mediation. It seems likely this case will go away, given the lack of serious justiciable issues. See story here- http://bit.ly/GBaEEr