GM Wins Important Ruling in Ignition Switch Litigation

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Since 2014, when General Motors Co. (NYSE: GM) issued its first recall related to a faulty ignition switch, the company has recalled a total of 2.6 million vehicles and paid out more than $2.6 billion in fines and settlements. On Wednesday, the company received a bit of a break when a Manhattan judge ruled that expert testimony would not be allowed in certain cases related to the ignition switch defect.

The faulty ignition switches have been linked to 124 deaths and as of November 30 there remain 1,723 unresolved personal injury and wrongful death claims against GM. The company has settled more than 1,700 claims already, according to a report at Automotive News.

In his ruling, U.S. District Judge Jesse Furman said that plaintiffs could not use expert testimony to make a connection between the defective switches and their effect on the crashes.

Plaintiffs alleged that the switches may have rotated from the “run” position at the moment of impact to the “off” or “accessory” position and then back to “run” before the vehicle’s airbags were activated. Furman disallowed the testimony as “unreliable” saying there was no evidence that such a rotation had occurred anywhere.

The ruling is likely to have a “significant” impact on “a swath” of pending litigation the judge said.

GM stock closed up about 0.2% on Thursday, at $41.38 in a 52-week range of $31.92 to $46.76. Shares were inactive in Friday’s premarket trading. The 12-month consensus price target is $46.70.