Catalano is the daughter of Linda Catalano who died on August 3, 2008.  The 55-year-old mother and grandmother had completed a garage sale and had left her home several blocks away to collect the remaining sale signs along the road.  She evidently stopped the vehicle along the roadway to pick up a sign.  She placed her vehicle into what she must have believed to be Park and opened the door and stepped out of the Chrysler Mini-Van to pick up her signs, with the engine running and the driver’s side door open.  The vehicle then “self-shifted” into reverse, knocking Catalano to the ground and dragging her underneath the left front tire, where it pinned her.

The Catalanos sued Chrysler over this longstanding defect, but the litigation was swept away by the Chrysler bankruptcy and sale to Fiat. Christina and her brother had attended the dinner, with a vague plan for her brother to stand up in the middle of the crowd and demand that Chrysler help the defect victims abandoned in the bankruptcy. But Christina, a 31-year-old UAW steel mill worker noticed that no one was near the stage where Marcchione was giving his speech about the ailing auotmaker’s future prospects. As the CEO concluded his remarks with a commitment to accountability, Catalano walked onto the stage and took the microphone from the event moderator.

“I thought, ‘What a perfect transition. Here he is talking about accountability and here I am ready to tell him how he needed to finally take some,’” she recalled. “I don’t remember exactly what I said. My adrenaline was pumping. I said, ‘You want talk about accountability, but you left hundreds of victims in the dust. My mother was killed by a Chrysler defect.’ He didn’t reply. I said, “If it was your mother who was killed by this, you would be up here, too.”

Security hustled Catalano off the stage and out of the room. News accounts made a brief mention of her appearance, without bothering to find out who she was.

Christine Catalano, as a bankruptcy activist, had been sending Chrysler letters, protesting in front of the headquarters and asking for a meeting.

“He’s ignored us, and we never got a response. But it’s not like he could avoid me last night.”

Catalano said that her mother’s sudden death has been “hard and devastating,” the crash has been all the more galling by its cause – a false park condition that the company has been well aware of for decades.

“I consider it murdering my mother,” she says. “This could have been prevented. When they take accountability, then maybe I’ll stop. Until then, I’m going to keep coming back and coming back.”

More on the GM and Chrysler bankruptcies and the victims they left behind.

It would be heartwarming to imagine a corporate come-to-Jesus moment, but cooler calculations apparently prompted this new tack, including increased pressure from injury victims, Congress, and the threat of state-by-state litigation into the legality of wiping away future claimant’s rights.

Chrysler said it looked at its revenue forecasts and decided that it could afford to pay claims.

“While Chrysler Group still faces challenges, we are confident that the future viability of the company will not be threatened if we accept these claims,” John Bozzella, senior vice president of external affairs and public policy, said in a statement.

Perhaps the steel trap-like mental reflexes that led Chrysler to the present low finally snapped into place. Could Chrysler really afford not to accept the claims? Imagine an automaker wounded by low reliability and safety ratings struggling to promote consumer confidence in its brand. Would it really need a story in the local paper decrying this unjust quirk of the bankruptcy, every time one of its super-great products created another permanently injured victim?

Yet Chrysler, like its brother-in-bankruptcy General Motors, is still stiffing liability claims filed before the company’s April 30 filing.  Those unfortunate enough to have experienced a vehicle defect that caused a death or injury before the bankruptcy still have no recourse against the companies.

Justice shouldn’t be meted out based on a date on the calendar.

Chrysler: Date of Bankruptcy Exit: June 10

What’s Out: The new Chrysler has no liability for any vehicles built by the old Chrysler. That means: the liability for all current, pending and future claims of any Chrysler vehicle built before the automaker exited bankruptcy belong to the old company.

Recovery of Unsecured Claims: Projected to be zero (or at most ½ cent/dollar).

General Motors: Date of Bankruptcy Exit: July 10

What’s In: The new GM agreed to assume liability for vehicles built by the old company, if the incident occurs after July 10, when GM exited bankruptcy.

What’s Out: The old GM retains the liability for all current and pending claims. If the incident occurred before July 10th, it is considered a pending claim, even if it has not yet been filed.

Recovery of Unsecured Claims: Unsecured claims in GM are predicted to receive between 10-20 cents on the dollar, several years from now. This is based on projections; there is no guarantee. Cost of administration claims will likely be paid in full for anyone having an accident in the five weeks in between when GM entered and exited bankruptcy, once the old company is liquidated.

Consumers for Auto Reliability and Safety, along with Consumer Action, Center for Auto Safety, Center for Justice & Democracy, and National Consumers League, have petitioned the Federal Trade Commission to require labels informing buyers of a used Chrysler’s unique liabilities. The label they’ve suggested goes like this:

“WARNING    This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.”

The California-based advocacy group CARS is asking for the designation under the FTC’s 1985 Used Car Rule, which was promulgated to prevent used car dealers from misrepresenting or failing to mention to buyers important facts about warranty coverage, via a Buyer’s Guide sticker displayed on the vehicle.

The bankruptcy and sale of the once-innovative American carmaker Chrysler to Fiat SPA concluded on June 10^th, with $6.6 billion in federal financing. In just 42 days, the government pushed the major players over the finish line and successfully fended off attempts from investors and victims of Chrysler defects to re-jigger the deal. The owners of the “new” Chrysler are a union retirees’ trust, with 55 percent, Fiat, with a 20-percent share that could grow to 35 percent, and the U.S. and Canadian governments, which hold minority stakes.

In a June 11 New York Times story, an anonymous Treasury official said: “This morning’s closing represents a proud moment in Chrysler’s storied history. The Chrysler-Fiat alliance has now exited the bankruptcy process and is poised to emerge as a competitive, viable automaker.”

“If shirking your due care responsibilities to customers who trusted you is a source of pride, then Chrysler’s chest must be puffed out so far that the buttons are popping off its pinstriped jacket. The bankruptcy has wiped away all current, pending and future claims against vehicles manufactured by the ‘old Chrysler,’ said Safety Research & Strategies president Sean Kane.

General Motors, which completed its bankruptcy nearly a month later, had sought the same freedoms from product liability. But the company was taken aback by the highly publicized efforts of consumer advocates and attorneys representing defects victims to retain their rights to seek compensation via the state tort system. There were news reports about the victims GM was leaving behind and television advertisements opposing GM’s move to shed all liability. Twelve state attorneys general from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota, Vermont, Illinois, California, Kansas and Ohio objected to the sales, arguing that the bankruptcy court overstepped its legal authority in granting the elimination of successor liability.

GM and the White House’s Auto Task Force, headed by Steven Ratner, who has since stepped down, came to an eleventh-hour agreement, in which GM agreed to accept liability for any future claims against vehicles built under its old ownership. Current and pending claims, however, have been wiped off the table.

In a mere 40 days, GM emerged from bankruptcy with fewer brands, fewer workers and a whole lot of taxpayer cash – $50 billion. (GM is keeping its Chevrolet, Cadillac, Buick and GMC brands and selling or shuttering Hummer, Saturn, Saab and Pontiac.) As of July 10, the majority owners of General Motors are the taxpayers, with a 61 percent stake; and the United Auto Workers health care trust, which owns 17 percent; the Canadian government, which owns 11.7 percent, with the remainder going to bondholders of the old company.

CEO Fritz Henderson told the Associated Press that the revamped automaker will be “faster and more responsive to customers than the old one.”

“Apparently the new GM is doing that by telling the old customers who have been harmed by a GM defect to drop dead,” said Rosemary Shahan of Consumers for Auto Reliability and Safety.

Best feet forward aside, consumer and auto safety advocates are not done demanding that the new companies do something to compensate victims of defects. Indiana Congressman Andre Carson has filed the Jeremy Warriner Consumer Protection Act after Jeremy Warriner, who lost both legs and suffered severe burns in a vehicle fire he alleges was sparked by a faulty brake fluid container on his 2005 Jeep Wrangler. The bill would require the newly-restructured GM and Chrysler to carry liability insurance and force the carmakers to cover claims made against them for any defective products produced by their predecessor company.

A consortium of victims, their attorneys and consumer groups are working on other avenues of redress.

Plaintiffs alleging defects in crashes that occurred before June 1 are, for the moment, SOL. Their only hope now lies in Congressional interference. Indiana Congressman Andre Carson has filed the Jeremy Warriner Consumer Protection Act after Jeremy Warriner, who lost both legs and suffered severe burns in a vehicle fire he alleges was sparked by a faulty brake fluid container on his 2005 Jeep Wrangler. The bill would require the newly-restructured GM and Chrysler to carry liability insurance and force the carmakers to cover claims made against them for any defective products produced by their predecessor company

“Justice shouldn’t be a roll of the dice – but in this case apparently it is – particularly for those who were injured or killed prior to the bankruptcy” says Sean Kane, president of SRS. “I don’t know how either GM or Chrysler expects to build on a brand when they walked away from their responsibilities. It’s un-American and Americans aren’t going to forget.”

And that’s mainly because victims and consumer advocate groups aren’t going to let them. Post-July-fourth fireworks, anyone?

Pity the poor used Chrysler dealer trying to peddle some pre-bankruptcy bargain with this sticker:

“WARNING    This vehicle was produced prior to the date when the Chrysler bankruptcy was approved. If you buy this vehicle and are injured or killed, even if your injuries were caused by the manufacturer, you or your survivors will not be able to recover your losses by taking action against the manufacturer. If your passengers are injured or killed, even if their injuries were caused by the manufacturer, they and their survivors will not be able to recover their losses by taking action against the manufacturer.”

Nothing says “Buy me” like the smell of newly cleaned upholstery and the thought of imminent death and paralysis-by-car. But the good folks at Consumers for Auto Reliability and Safety (along with Consumer Action, Center for Auto Safety, Center for Justice & Democracy, and National Consumers League) argue that’s exactly what consumers should bear in mind if they take a chance on a pre-bankruptcy Chrysler. The California-based advocacy group is petitioning the Federal Trade Commission to require labels informing buyers of a used Chrysler’s unique liabilities granted by the bankruptcy and sale to Fiat.

CARS are asking for the designation under the FTC’s 1985 Used Car Rule, which was promulgated to prevent used car dealers from misrepresenting or failing to mention to buyers important facts about war anty coverage, via a Buyer’s Guide sticker displayed on the vehicle.

“Prospective purchasers of those Chrysler vehicles are likely to be unaware which vehicles were produced prior to the bankruptcy proceeding. This is particularly true since two vehicles that are the same make and model, and are identical in appearance and design, but differ solely by a single day in their date of manufacture, will afford their purchasers entirely different levels of protection.”

Chrysler buyers risk losing millions in medical expenses, lost wages and other expenses, CARS says, and the bankruptcy proceedings can not possibly provide adequate notice to those who may be harm by a defect on some later date.

Those victims certainly weren’t the concern of Chrysler, Fiat, the White House’s Auto Task Force or the bankruptcy judge who hung them out to dry. Let’s see if the FTC cares.

The automaker and the government task force were apparently unprepared for the vigorous opposition mounted by the state attorneys general, consumer advocates, and victims of GM defects and their attorneys. GM had hoped to skip out on an estimated millions of dollars in pending claims and any future death and injury claims involving GM vehicles built pre-bankruptcy. The company was in murky legal territory in its quest to extinguish future claims – which may explain its capitulation on that point.

It’s still not immediately clear what will happen to the current claims.

“The bottom line is: liability shouldn’t be based on when you bought the car,” says SRS President Sean Kane, who has been among those advocating for a change to the bankruptcy terms. “I don’t believe there’s a lot of tolerance for that from the public.  It certainly isn’t the way you build brand equity going forward.”

GM’s walk-back does nothing for the victims of Chysler’s defective products. But   Congressman Andre Carson (IN) has just introduced the Jeremy Warriner Consumer Protection bill, which would require GM and Chrysler to purchase insurance for past, current and future liability claims.  And, the team that brought you this compromise is likely to keep applying the pressure, until both automakers take responsibility for defects.

About 3,400 individuals will die or be injured in a General Motors or Chrysler vehicle due to an automotive defect in the companies’ first year post-bankruptcy, according to a new analysis conducted by Safety Research & Strategies

SRS has released its report, Public Safety at Risk: Bankruptcies Leave Legacy of Defects, Injuries and Deaths as part of its ongoing efforts to highlight the plight of the victims of the Chrysler and GM bankruptcies. Under the terms of each automaker’s transition from their old, debt-burdened incarnations to their liability-free future entities, hundreds of pending death and injury claims will be eliminated. But the latent – and in some cases, well-known, but never resolved – automotive defects will continue to manifest themselves in the 40 million GM and Chrysler vehicles built before Chapter 11, which remain in the U.S. fleet.

Chrysler’s average annual number of death and injury claims in the reporting period is477, resulting with an average of 636 casualties per year (casualties are individual deaths and injuries). For General Motors, the average annual claims rate is 2,171 with an average of 2,779 casualties per year. The average combined casualties per year, for both companies, is 3,415. These claims can be expected to continue at the same pace, resulting in approximately 3,400 new casualties each year during the next couple of years, the report says.

The bankruptcies’ termination of consumers’ rights to redress will likely exacerbate these problems. The National Highway Traffic Safety Administration and automakers rely on death and injury claims to detect defect trends. If these claims are not filed, NHTSA and GM and Chrysler will lose an important surveillance tool .And, while both companies will be responsible for launching recalls and doing repairs, there will be fewer safety recalls for vehicles built by the old GM and Chrysler:

“If neither company is responsible for the past and future claims involving 40 million vehicles, few will file death or injury claims. If death and injury claims data do not reflect the status of real-world problems on the road, safety is compromised. And, if GM and Chrysler no longer bear the liability for uncorrected defects, the automaker has few motivations to fix the pre-bankruptcy problems.”

Following the path set by the Chrysler bankruptcy and sale to Fiat, GM has sought protection from liability claims for deaths and injuries that occur in vehicles manufactured before the bankruptcy. Eight states attorneys general, from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont filed an objection with the U.S. Bankruptcy Court in New York on Friday. Illinois, California, Kansas and Ohio have joined the objections.

The states, which will eventually shoulder the financial burdens of permanently injured victims of automotive defects, argue that the bankruptcy court overstepped its legal authority in granting the elimination of successor liability. More to the point, the attorneys general have called out this provision as an evisceration of states’ rights:  “…these offensive provisions, taken as a whole, divest consumers of substantial legal rights, without any regard for state laws that may, when a claim is eventually made, be read to hold otherwise.”

To the average consumer, the new General Motors will be indistinguishable from the old General Motors with a critical exception:

“To allow Newco to purchase substantially all of the Debtors’ assets, continue in the manufacture and sale of GM vehicles, enjoy the good will that comes along with the purchase of the GM name and brand, and still avoid any claims brought against it on the theory of successor liability contrary to state law is an unconscionable and wholly insupportable result that will harm innocent consumers.”

So far, in a Detroit News story, the automakers pulled the linings out of their corporate pockets and shrugged. Chrysler said that it was “saddened” that consumers had been injured in their vehicles and GM says that it feels consumers’ pain. Neither seemed inclined to stand behind their products or contemplate the challenges on some future sales floor when enough consumers figure out the raw deal that awaits.

Other states are expected to formally join the objection.

Joinder and Limited Objection of the States of Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont 06/19/09

The States of Illinois, California and Kansas join the Joinder and Limited Objection of the States of Connecticut, et al. 06/19/09

The money quote:

“We have heightened concerns about GM abandoning its legal obligation to customers that have been injured or killed by one of its defective products. The New GM has a continued responsibility to recall and repair vehicles manufactured by old GM. New GM’s request for liability protection creates an unjust and illogical dichotomy in which the company is responsible for removing and repairing a vehicle defect, but would not be responsible for the injuries and deaths caused by that very same defect. The rights and responsibilities GM owes to its customers do not end with an arbitrary date. We insist that you fulfill its obligations to injured customers and their families. We request that you consent to assuming the obligations of the Old GM.”

The letters went out Tuesday, with the responses due back to the committee by Friday.

Bipartisan Senate Commerce Committee Letter Requesting Chrysler Fulfill Legal Obligations to Injured Customers 06/09/09

Bipartisan Senate Commerce Committee Letter Requesting GM Fulfill Legal Obligations to Injured Customers 06/09/09