Texas Trial Law Advocate : Texas Business Litigation Lawyer & Attorney : Craig Cherry : Haley & Olson Law Firm : TX Personal Injury, Product Liability

According to the Wall Street Journal, a new court filing late Friday by General Motors Corporation ("GM") makes clear the auto manufacturer has agreed to assume legal responsibility for injuries caused by vehicle defects occurring after it emerges from bankruptcy protection.  This concession from GM means consumers who are injured in car wrecks after GM emerges from Chapter 11 bankruptcy protection, but in vehicles that were manufactured before GM filed for bankruptcy protection and during GM's bankruptcy proceeding, will still be able to bring product liability claims against the "new" GM.

Specifically, the filing on Friday by GM states that GM will:

"expressly assume all products liability claims arising from accidents or other discrete incidents arising from the operation of GM vehicles occurring subsequent to [the emergence of New GM], regardless of when the product was purchased."

This is, without question, seen as a major victory for consumers who are injured in car wrecks involving GM vehicles.  Previously, under the terms of GM 's original bankruptcy plan, GM would have been able to avoid such liabilities after selling its "good" assets to a "New GM" owned by the government.  According this new filing, consumers will now be able to seek compensation for their injuries if they were injured in a  vehicle manufactured by the "Old GM", whether the vehicle involved was manufactured before or after GM sought bankruptcy protection, as long as the wreck occurred after GM emerges from bankruptcy protection.

While this is seen as a major victory for consumers, there are hundreds (if not thousands) of claims that were pending against GM before it sought bankruptcy protection.  As of right now, it appears GM intends to leaves those liabilities behind in bankruptcy.  However, consumer advocates argue the "New GM" should accept those liabilities as well.  A hearing on Tuesday before the bankruptcy court should shed some light on whether or not the "New GM" will also agree accept liability for those pending claims.

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Hydroxycut, a group of dietary supplements sold by Iovate Health Sciences, Inc. in New York, has been voluntarily recalled from the market by Iovate after the U.S. Food and Drug Administration (FDA) issued a warning about potential serious health risks through the use of the supplements.

The Hydroxycut dietary supplements are marketed for weight loss, as fat burners, as energy-enhancers, as low-carb diet aids, and for water loss.  According to the FDA, there have been serious liver injuries reported through the use of these products including, elevated liver enzymes, jaundice and liver damage which required a liver transplant.  At least one death due to liver failure has been reported to the FDA.

According to the FDA, signs of liver damage include:

jaundice (yellowing of the skin or whites of the eyes) and brown urine, nausea, vomiting, light-colored stools, excessive fatigue, weakness, stomach or abdominal pain, itching, and loss of appetite.

The FDA has warned consumers to stop using the Hydroxycut products in order avoid any undue risk.  The Hydroxycut products which have been recalled include the following:

• Hydroxycut Regular Rapid Release Caplets
• Hydroxycut Caffeine-Free Rapid Release Caplets
• Hydroxycut Hardcore Liquid Caplets
• Hydroxycut Max Liquid Caplets
• Hydroxycut Regular Drink Packets
• Hydroxycut Caffeine-Free Drink Packets
• Hydroxycut Hardcore Drink Packets (Ignition Stix)
• Hydroxycut Max Drink Packets
• Hydroxycut Liquid Shots
• Hydroxycut Hardcore RTDs (Ready-to-Drink)
• Hydroxycut Max Aqua Shed
• Hydroxycut 24
• Hydroxycut Carb Control
• Hydroxycut Natural

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On June 10, the Eleventh Circuit Court of Appeals affirmed a district court's granting of summary judgment in favor of Hoffman-La Roche, Inc., the manufacturer of the drug Accutane.  The case involved the tragic death of the son of U.S. Rep. Bart Stupak (D-Mich), who was 17 years old when he took his own life.  Laurie Stupak sued Hoffman-La Roche, Inc. alleging the manufacturer was negligent in failing to warn that Accutane (an acne drug) could cause suicide without any premonitory (warning) symptoms.

The package of Accutane that B.J. Stupak was taking did not warn of a risk of suicide without any warning symptoms.  The court ruled, however, that because Hoffman-La Roche, Inc. did not know at the time that patients using Accutane could experience a desire to kill themselves without any warning signs, the drug manufacturer could not be held liable. 

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Late yesterday, in a two-page order, the U.S. Supreme Court decliend to hear a challenge by three Indiana state funds and consumer groups regarding the sale of Chrysler's assets to Italian automaker Fiat.  In the order, the Supreme Court did not address the merits of the challenge by the Indiana funds. Rather, the order simply said that the Indiana funds "have not carried the bruden" of proving that intervention by the Supreme Court was necessary.

In another win for Chrysler on Tuesday, bankruptcy judge Aurthur J. Gonzalez approved Chrysler's request to terminate 789 dealer franchises immediately over the objections by scores of dealers.

As a result of the decisions by the U.S Supreme Court and Judge Gonzalez on Tuesday, there is a clear path for the sale of Chrysler's assets to Fiat and Chrysler is expected to emerge from bankruptcy very soon, possibly as early as today.

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In a 5-4 decision, the U.S. Supreme Court ruled today in Caperton v. A.T. Massey Coal Co., Inc. that elected judges must disqualify themselves from hearing cases involving people or companies who spent large amounts of money to help get them elected to the bench.

Writing for the majority, Justice Anthony Kennedy, held that the Due Process Clause requires disqualification when a party's campaign spending had a "disproportionate influence" in a case that was "pending or imminent". 

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Today, Justice Ruth Bader Ginsberg temporarily delayed the sale of Chrysler's assets to Fiat after two groups petitioned the high court for review of orders approving the sale by the bankruptcy judge and the Second Circuit Court of Appeals.  The Court's order does not state how long the delay will last.  Chrysler has claimed its deal with Fiat is a critical part of its plan to emerge from Chapter 11 bankruptcy protection and that if a sale to Fiat does not close by June 15, Fiat has the option of pulling out of the agreement, leaving Chrysler with no other choice but to liquidate.

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On Saturday, the U.S. Supreme Court was asked to block the sale of Chrysler assets to Italian automaker, Fiat, by two groups.  One group, consisting of Indiana state pension and construction funds argues that the terms of the sale favor unsecured creditors at the expense of secured stockholders and that the use of TARP funds to finance the bankruptcy is unconstitutional. 

The second group protesting the sale is a group of individuals that claim the terms of the sale would limit their ability to recover in product liability actions filed against Chrysler.  Last Monday, in a ruling that outraged many consumer rights advocates, the bankruptcy judge overseeing the Chrysler bankruptcy ruled that Fiat could not be held liable for product defects in Chrysler vehicles.

Justice Ginsberg has the authority to isse or reject a stay herself or refer the application to the full U.S. Supreme Court.

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On Friday, the U.S. Court of Appeals for the Second Circuit approved the sale of most of the assets of Chrysler to Italian automaker Fiat.  However, the court of appeals said the deal could not be completed until June 8 or until the U.S. Supreme Court decides not to hear the case.  The deal is primarily opposed by a group of Indiana pension funds that acquired $42.5 million in secured Chrysler debt last year.  The pension funds argue the deal is unfairly biased towards secured creditors.

In addition to approving the sale of Chrysler's assets, the bankruptcy judge overseeing the Chrysler bankruptcy also ruled that Fiat will not be responsble for any future product liability claims filed by the owners of current Chrysler vehicles.  It is believed General Motors will likewise seek the same relief in its bankruptcy proceeding regarding future product liability claims involving vehicles it manufactures before coming out of bankruptcy. 

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