U.S. District Court for the District of Maryland narrows defective

Daily Record, The (Baltimore), Sep 18, 2008 by Caryn Tamber

A federal judge has narrowed the scope of a lawsuit over cars alleged to have defective seatbacks.

The putative class-action suit, Lloyd et al. v. General Motors Corp. et al., gained attention last year when the Maryland Court of Appeals held that car owners could sue automakers over the seatbacks even if they had not suffered any physical injury.

The case was subsequently transferred to U.S. District Court for the District of Maryland, where Chief Judge Benson E. Legg decided last week that some of the plaintiffs do not count as members of the putative class. The remaining plaintiffs can continue to pursue their tort claims against the car companies but are barred from pressing their breach of implied warranty claims, Legg ruled.

The decision will have "minimal" effect on the case, said Stephen H. Ring, a Germantown solo practitioner who is part of the plaintiffs' legal team.

"There are sufficient additional counts in tort that we feel the case is amply supported under several theories of law," Ring said.

He said the plaintiffs are prepared to enter the discovery phase and declined to comment on whether there have been settlement negotiations.

Lawyers for the car companies did not return calls Wednesday. A spokeswoman for GM e-mailed a statement.

"GM is pleased that certain of plaintiffs' claims and some of the plaintiffs' cases as a whole have been dismissed, and GM looks forward to defending what remains of the case," spokeswoman Geri Lama wrote. "All of GM's seat designs at issue in the case, and indeed all GM seat designs, meet or exceed all applicable Federal Motor Vehicle Safety Standards."

Potential injury

The suit was filed nine years ago in Montgomery County by Timothy and Bernadette Lloyd, who named GM, Chrysler L.L.C. and Ford Motor Co. as defendants. The Lloyds alleged that the car companies all produced seatbacks between 1990 and 1999 that could not withstand the impact of a rear collision. Several car owners in other states sued over the seatbacks as well, some claiming the seats caused physical injury or death.

In a later amended complaint, the Lloyds added as a defendant Saturn Corp., maker of their 1995 Saturn. Over time, they added plaintiffs too. Eventually, the Lloyds sold their Saturn and bought a 1997 Dodge minivan.

In 2000, the Montgomery County Circuit Court dismissed the suit on grounds that the plaintiffs had not shown any injury from the seatbacks. The Court of Special Appeals agreed.

The case was argued before the Court of Appeals in 2003 but not decided until 2007. The top court held that the potential injury -- death or paralysis -- was so great and the probability of injury so high that the owners could sue under a purely economic loss theory.

After the case was reinstated, the plaintiffs added more plaintiffs and expanded the putative class, changes that resulted in the removal of the case to federal court.

'Publicly available' information

In his ruling last week, Legg eliminated from the case six plaintiffs who did not own a class vehicle, though they may rejoin if the class is expanded.

Legg also took up defendants' argument that the plaintiffs' claims came too late. He wrote that in Maryland, the statute of limitations for tort claims is three years, but it's tolled until the plaintiff discovers the injury. The defendants argued that the seatbacks problem had been publicized before the plaintiffs bought their cars, so they should have known about it then.

"What the named plaintiffs knew and when they knew it, however, is a fact-intensive question that cannot be determined from the face of the amended complaint," Legg wrote. "Despite the Defendants' assertions, the mere fact that information was 'publicly available,' even if featured on an episode on '60 Minutes,' does not compel the conclusion that each individual plaintiff should have been aware of [] it at the time they purchased their vehicle.

"Although such a conclusion is plausible, the Court is persuaded that this is a question for discovery," he continued.

The statute of limitations for implied warranty actions is four years from when the car is first put into service and cannot be tolled, Legg wrote. Because of that statue of limitations, the eight remaining plaintiffs cannot sustain their implied warranty claims, he decided.

WHAT THE COURT HELD

Case:

Lloyd et al. v. General Motors Corp. et al., U.S. Dist. Ct. No. BEL-07-2487. Published. Opinion by Legg, C.J. Posted Sept. 11, 2008.

Issue:

Should the plaintiffs' tort and breach of implied warranty claims be allowed to proceed?

Holding:

Yes, in part. Some of the plaintiffs do not own class vehicles, so their claims are dismissed. The remaining plaintiffs may go ahead with their tort claims but not their implied warranty claims.

Counsel:

Stephen H. Ring for plaintiffs; Karen N. Walker, Washington, D.C., John D. Wilburn, McLean, Va., Mary Catherine Zinsner, McLean, Va. for defendants.