Melton Family Charges GM with Fraud; Asks for Sanctions

The parents of Brooke Melton, who died in March 2010 crash caused by a well-known ignition switch defect, returned to a Georgia state court, charging General Motors with fraudulent concealment and perjury in the civil liability case that was settled in September. And, just for good measure, they’ve filed a sanctions motion, via their attorneys Lance Cooper and Jere Beasley for discovery abuse and spoliation of evidence.

The Melton case has unleashed a world of hurt on General Motors – an investigation by the National Highway Traffic Safety Administration, Congressional oversight, class action lawsuits and general opprobrium. The company knew for nearly a decade that a loose ignition switch in six models – including the 2005-2007 Cobalt – could move from the “Run” to “Accessory” or “Off” position, turning off the power steering, anti-lock brakes and disabling the airbags, before recalling 1.6 million vehicles in North America. At least 13 deaths have been linked to the defect. The decade-long narrative of what GM knew, when it knew it, how it responded to the problem – or not – included the revelation that one of the obstacles to pinpointing the defect was a design change to the ignition switch that GM originally blamed on the supplier, but no change in the part number – a huge No-No.

In the face of a document showing that the Cobalt's lead design engineer Ray DeGiorgio signed off on the new ignition switch without assigning a new part number, GM has since admitted that he may have lied under oath.

But just six months ago, GM was settling the Melton case under the ironclad assertion that though it knew about the defect, it had no idea who changed the defective ignition switch design or authorized that change – a change that attorney Cooper and his expert Mark Hood uncovered in their investigation. GM’s recent disclosures put the lie to those claims, so the Meltons have filed a new lawsuit in the State Court of Georgia in Cobb County, charging fraudulent concealment and perjury by DeGiorgio, who has been suspended with pay while GM investigates. During the Melton litigation, DeGiorgio repeatedly testified in a deposition that he knew nothing about any changes and GM backed him up.

Brooke Melton, 29, died when the ignition module of her 2005 Cobalt slipped into the accessory position as she drove along Highway 92 in Paulding County, Ga. Melton’s Cobalt skidded into another vehicle, and Melton died of her injuries in the crash. The incident was initially attributed to Melton losing control of her car on a rainy night. But the Melton family sought the counsel of Attorney Lance Cooper, after facing a legal claim from the driver in the other vehicle. After 18 months of discovery, which included a court order compelling the automaker to produce what it knew, documents revealed that GM engineers discovered the ignition switch problem during the Cobalt’s production stage,that the company sold them anyway, that GM began to receive complaints about the problem almost immediately, tried to make it go away with an October 2005 Technical Service Bulletin and implemented a “fix” that never solved the problem. Cooper did not keep this knowledge to himself. In February, on behalf of the Meltons, he asked NHTSA to open a Timeliness Query, based on GM’s longstanding knowledge of the defect and the inadequacy of the automaker’s first recall, which did not cover the entire affected population.

Although GM CEO Mary Barra has been appropriately contrite in Congressional oversight hearings, the company’s litigation department has taken a harder line. On April 11, the Meltons asked GM to rescind the original settlement, but the company refused, saying that it denied that it engaged in any improper behavior.  

This case has had far-reaching consequences for General Motors and NHTSA, which also knew about the defect in 2007, but declined to follow the investigative thread presented by a Wisconsin crash in which the airbags did not deploy and the ignition was found in the accessory position and GM’s TSB. The new long-term transportation bill, the Grow American Act has all sorts of proposed amendments to strengthen NHTSA’s regulatory and rulemaking powers and enhanced penalties to discourage automakers from treating the decision to recall as a business case. Surely some of this is rooted in the death of Brooke Melton. 

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