A General Motors Co. lawyer demanded the widow of a car-crash victim drop a plan to seek punitive damages from the auto maker, even though the company's government-brokered overhaul does not bar plaintiffs from going after such legal penalties, the Wall Street Journal reported today. The GM lawyer in a March 3 email told a lawyer representing the widow of a man killed in a GM-made U-Haul truck that GM could not be sued for punitive damages in the case. Other lawyers say that assertion stretches beyond what they believe is GM's legal exposure in product-liability cases. Even so, after receiving the email, the widow's lawyer abandoned plans to make a claim for punitive damages against GM. The dispute highlights questions now arising over how much legal protection GM and Chrysler Group LLC have in certain product liability cases following 2009 government rescues that exceeded $70 billion. A bankruptcy judge allowed Chrysler to immunize itself from new punitive-damage claims arising from alleged manufacturing defects in vehicles sold before its restructuring. GM received a $50 billion government rescue at the height of the financial crisis and then sold its best assets to the U.S. Treasury in a 2009 bankruptcy sale—making it a new auto maker legally divorced from the company that manufactured the U-Haul and millions of other vehicles. The newly formed GM posted a record $7.6 billion profit last year.
