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In October 2005, Jeremy Warriner swerved his new Jeep Wrangler to avoid an oncoming car and crashed into a utility pole. The pole fell, trapping Warriner inside the car. Then, engineers hired by his attorneys alleged, the plastic brake fluid reservoir broke, setting the Jeep on fire.
Warriner awoke from a medically induced coma 5 1/2 weeks later with two amputated legs.
But his lawsuit against Chrysler ended before it even went to court. A federal Bankruptcy Court’s decision to allow Fiat to buy the automaker last week exempted the “new” Chrysler from past product liability claims. Now consumer groups are mobilizing to block General Motors from seeking similar protections in bankruptcy.
“This is not a normal bankruptcy,” said Warriner, 34, of Indianapolis. “It has been financed with our tax dollars. Our tax money is being used in a manner that blocks our 7th Amendment right to a trial.”
On Wednesday, an ad hoc committee representing hundreds of people injured in GM and Chrysler vehicles launched a television ad campaign protesting government-managed restructurings that throw “consumer safety protections out the window.”
“We all want GM and Chrysler to thrive -- but not at the cost of our own survival,” one spot says.
Lawyers are scrambling to file paperwork today to oppose the sale of GM’s assets. Christine Spagnoli, president of Consumer Attorneys of California, said the automakers’ pledge to guarantee warranties, parts and maintenance is misleading to customers.
“They’re saying, ‘If your brakes are bad, we’ll fix them. But if you crash and get hurt because your brakes are bad, we don’t want to be accountable for that,’ ” she said.
Warriner will still be able to seek compensation from the “old” GM and Chrysler, which will stay in bankruptcy to liquidate real estate and other hard-to-sell assets. But senior Treasury advisor Ron Bloom told a Senate committee that personal injury awards would probably be smaller.
“We really don’t have an alternative, other than to essentially write an endless check to deal with that situation,” he testified last week.
So consumer groups are pressing Congress to intervene. One solution is to require the “old” companies to have product liability insurance to cover claims. Another is to set up a special trust for victims, as with the bankruptcies of asbestos manufacturers.
Warriner’s mediation date was scheduled for May 5. But on April 30, Chrysler filed for Chapter 11.
Consumer groups have since been competing for the attention of lawmakers and the Obama administration.
Last week, the Center for Justice & Democracy, Consumer Federation of America, Consumers for Auto Reliability and Safety, Public Citizen and U.S. PIRG expressed their concern in a letter to President Obama. “American lives hang in the balance,” the group’s letter says. “Right now, we know of numerous Chrysler and GM vehicle defects that are hurting and killing Americans, which will only get worse if this time bomb bankruptcy loophole is not closed.”
The groups argue that consumers may stop filing claims against GM and Chrysler, eliminating crucial data that the federal government uses to monitor product defects. And exempting liability removes the financial incentive to fix defects or warn consumers about them, they said.
This month, Joanne Doroshow, executive director of the Center for Justice & Democracy in New York, brought a number of victims and their families to Capitol Hill to lobby.
During congressional hearings, auto executives and Bloom defended the exemptions, saying they were necessary for a successful restructuring. GM and Chrysler might otherwise face liquidation.
“In the case of product liability, purchasers in a normal [bankruptcy sale] do not assume that sort of obligation,” GM Chief Executive Fritz Henderson said.
Yet Warriner continues to work in hopes that GM’s bankruptcy will be different than Chrysler’s. He has traveled to Washington twice for the hearings and to talk to lawmakers. He also launched a letter-writing campaign.
“No one is grasping how dangerous this is,” he said.
