Tag Archive | "Anton Valukas"

GM Does Not Have to Turn Over Notes to Ignition-Flaw Plaintiffs: Judge

A U.S. judge on Thursday refused to let plaintiffs’ lawyers suing General Motors Co access notes from lawyers the company hired to prepare an internal report on the automaker’s decade-long mishandling of a deadly ignition-switch flaw, reported Reuters.

U.S. District Judge Jesse Furman in Manhattan said interview notes from the “Valukas report” – named for Anton Valukas, chairman of law firm Jenner & Block, who GM hired to spearhead the investigation – were protected by attorney-client privilege.

While the ruling shields materials that could boost the cases by plaintiffs, they will be able to learn the identities of interviewed witnesses who were not named in the report.

Facing a backlash over its handling of the ignition-switch defect, GM tapped Valukas, a former federal prosecutor, last year to conduct a comprehensive review of why the company took so long to address the problem. The defect resulted in the recall of 2.6 million vehicles. A program to compensate victims has so far identified 45 deaths linked to the switch.

Valukas and his firm conducted more than 350 interviews with 230 witnesses, Furman wrote, and each lawyer took careful notes and prepared summaries of the conversations. The final report issued in June 2014 cited a series of missteps by GM employees, from lawyers to engineers, which allowed the problem to go unresolved for years.

The report is public, and GM has agreed to produce documents cited in the report to plaintiffs’ lawyers, who have sued on behalf of individuals injured or killed as a result of the switch, and customers whose vehicles lost value.

However, the company balked at turning over certain materials, including interview notes. GM said the notes were protected by attorney-client privilege because they were prepared by Jenner & Block lawyers. But plaintiffs’ lawyers argued that GM never intended to keep the Valukas report confidential, and that the notes were not protected because they were not legal advice.

Furman disagreed, saying GM had established a “valid claim” that the communications were privileged. And “the cost of withholding the materials is outweighed by the benefits to society of encouraging full and frank communication” between lawyer and client, he wrote.

Plaintiffs’ lawyer Steve Berman said he was disappointed with the ruling, but pleased to receive the list of unnamed witnesses. He also said plaintiffs believed the report was “flawed.”

GM did not immediately respond to a request for comment.

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Barra Faces Scrutiny in House Over G.M. Recalls

Washington — Mary T. Barra, chief executive of General Motors, walked into a crowded House hearing on Wednesday with her high-powered lawyer at her side, confident that his exhaustive internal investigation about a deadly defect would convince lawmakers that G.M. is taking safety seriously, reported The New York Times.

But instead Ms. Barra came under attack again for G.M.’s long failure to recall defective small cars, and now faces further investigations into its safety issues, including a revelation that an employee experienced stalling problems in 2005 in a Chevrolet Impala that was not recalled until this week.

The hearing was an opportunity for G.M. to rebuild credibility with lawmakers, as well as the family members of crash victims who packed the room, after admitting in February that it failed for more than a decade to recall millions of defective cars tied to at least 13 deaths and 54 accidents.

Yet the nearly three hours of testimony by Ms. Barra and G.M.’s outside lawyer, Anton Valukas, left lawmakers more frustrated and skeptical about the nation’s biggest carmaker’s commitment to safety.

“The report does not answer all the key questions,” said Diana DeGette of Colorado, the ranking Democrat on the House Energy and Commerce subcommittee on oversight, as a phalanx of Ms. Barra’s top lieutenants looked on. “The report singles out many individuals at G.M. who made poor decisions or failed to act, but it doesn’t identify one individual in positions of high leadership who was responsible for these systemic failures.”

The most damaging moment came when Representative Fred Upton, a Republican of Michigan and chairman of the committee, produced a string of emails from 2005 showing that one employee had alerted others about a stalling incident in an Impala.

The employee, Laura J. Andres, wrote that the Impala she was driving at 45 miles an hour had inexplicably shut off when she hit a bump.

“I think this is a serious safety problem, especially if this switch is on multiple programs,” she wrote to another employee. “I’m thinking big recall.”

That vehicle, however, was not recalled until this week, when the Impala was among 3.36 million cars worldwide recalled for a faulty ignition key.

Those vehicles were in addition to the 2.6 million Chevrolet Cobalts, Saturn Ions and other small cars that G.M. started recalling in February for a defective ignition switch that could suddenly cut engine power and disable air bags.

Among the employees included in the 2005 email traffic was Raymond DeGiorgio, a switch engineer on the Cobalt who was one of 15 G.M. employees fired this month for their roles in failing to fix the small-car ignition problem first identified inside the company more than a decade ago.

The Impala emails raised questions of whether G.M. had a pattern of ignoring safety problems and avoiding expensive recalls.

Ms. Barra testified that she did not believe that recalls were routinely avoided in the past. “If there was a serious safety problem, a recall would have been done,” she said.

But lawmakers were hardly satisfied with her answer, or with the 325-page report prepared by Mr. Valukas, a former United States attorney hired by G.M.

Acknowledging the victims’ families throughout the room, Ms. Barra repeated her apologies for G.M.’s failure to repair defective cars.

She also asserted that the inquiry had uncovered all the mistakes inside G.M. that contributed to the long-delayed switch recall. “The Valukas report was comprehensive,” Ms. Barra said. “It was very far-reaching.”

But Bruce Braley, a Democrat of Iowa, questioned the report from the start, noting that the cover page said that it was protected by attorney-client privilege, and that portions delivered to the committee were blacked out.

“We on this panel do not know who some of the victims were,” Mr. Braley said.

G.M. has consistently declined to name any victims or offer details of the accidents it has linked to the switch defect.

Another line of questioning focused on the role of Mr. DeGiorgio, the engineer who approved the design of the Cobalt switch and who later modified it in 2006 — but did not change the part number, making it difficult to uncover the problem later.

Mr. Valukas characterized Mr. DeGiorgio as bearing much of the responsibility for allowing the faulty switch to be installed, and then not alerting others in G.M. that older cars needed to be recalled once the part had been changed.

But Jan Schakowsky, Democrat of Illinois, suggested that others inside G.M. may have been aware of Mr. DeGiorgio’s secret decision to upgrade the switch in 2006. She confronted Mr. Valukas about an unnamed “supply quality engineer” who signed off when Mr. DeGiorgio changed the switch.

Mr. Valukas played down that engineer’s knowledge of the issue, and dismissed it as a procedural matter that did not include oversight of Mr. DeGiorgio’s actions. That response did not satisfy Ms. Schakowsky.

“The problem at G.M. is deeper than just one rogue engineer,” she said. Mr. Valukas was asked several times to defend his conclusion that there was no concerted cover-up by G.M. employees of the switch problems.

Asked repeatedly to define a cover-up, he said it would mean that someone within G.M. was deliberately withholding information about a safety defect.

“If the individual has the information and deliberately tries to conceal it, that’s a cover-up,” he said.

He said that did not appear to be the case with the multiple failures of dozens of G.M. employees to address the ignition problem.

Representative Phil Gingrey, a Republican from Georgia, disagreed, saying that the G.M.’s protracted delay in recalling dangerous vehicles “smacks of a big cover-up to me.”

Ms. Barra held firm on several issues, including her refusal to release a revised number of deaths tied to the faulty ignition switch, or how many people suffered serious injuries as a result of the defect.

Representative Pete Olson, a Republican of Texas, challenged Ms. Barra’s assertion that the company knew of only 13 deaths.

“That’s a problem, because on the wall behind, you have 15 photographs,” he said, referring to photos of deceased accident victims brought to the hearing by family members.

Ms. Barra also said she “can’t speculate” on the number of serious injuries related to the defective vehicles, deferring on the subject until the lawyer Kenneth R. Feinberg recommends a compensation program and claims are filed.

“We really won’t know until the program is fully administered,” Ms. Barra said.

Other revelations at the hearing included Mr. Valukas’s testimony that the switch supplier, Delphi, did not cooperate with his investigation. “We have not been given access to the Delphi witnesses,” he said.

In the end, the panel said it would continue to investigate G.M., including the role of safety regulators, and may hold more hearings on the subject. A Senate panel said it would call back Ms. Barra this summer. “Our work isn’t done,” said Charlotte Baker, spokeswoman for the committee on the majority side.

Before the hearing, some family members of crash victims told reporters about the devastating effect of G.M.’s failure to fix the switch. “Why did they fail to act?” said Laura Christian, the birth mother of 16-year-old Amber Rose, who was killed in a July 2005 crash in Dentsville, Md. “I still dream of my beautiful daughter as if she were alive.”

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