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Chrysler and accidents yet-to-be

UPDATED 6:10 p.m.  A related plea to the Court, also challenging the Chrysler sale deal’s elimination of future claims against the automaker, has been filed.  It involves a wrongful death lawsuit pending in state court in California. It can be downloaded here.


If the Chrysler sale goes through soon, and a Chrysler-made vehicle is in a crash — perhaps during holiday traffic over July Fourth — is it unconstitutional to deny someone injured in that accident a right to sue?  That, in essence, is the question that five consumer groups, a Chrysler consumers’ committee, and three men who already have accident lawsuits pending against Chrysler are asking the Supreme Court to answer.

 They are seeking a chance for themselves and others to pursue existing and future accident claims against NewChrysler — the auto company that is to rise out of the government-managed rescue plan.  Their application for a delay of the plan can be read here.

Under the terms of the rescue, NewChrysler would be freed of current and future lawsuits seeking money damages for injury (or death) caused by cars or trucks that were sold by “old” Chrysler before the sale deal took effect.  Millions of those cars, oif course, are still on the road.

If that provision remained intact, there is almost no doubt that it would be repeated in any deal to spare bankrupt General Motors Corp. from existing and future accident claims, thus affecting millions more cars and trucks now in use.

Keeping the victims from suing, their lawyers argue, is not only beyond the power of a bankruptcy court, but raises “an important constitutional issue” about cutting off legal rights of people who, as of now, have no idea that they may someday be hurt in an auto crash.

The most immediate impact of the provision would be on those who already have sued Chrysler for accident harms, the application suggests.  William Lovitz, Farbod Nourian and Brian Catalono joined in the consumer groups’ challenge because they are suing right now.

Lovitz’s mother was killed, and her son claims that was due to design flaws in Chrysler-made cars.  Catalano is making the same claim for his own mother’s death. And Nourian is suing for his own injuries, medical bills and lost wages following a serious accident involving a Jeep Cherokee.

“Given that no funds remain in Chrysler to pay any claims,” and that the sale deal would bar claims that NewChrysler has liability for “old” Chrysler’s products, they say to the Court, “the claims of each of these individuals will disappear, with no consideration of the merits of their individual cases or of the merits of the issues they seek to present to this Court.”

The constitutional claim being asserted by the consumers and victims is tied to the simple fact that people do not know, now, that they could be in an accident in the future.  “The future causes of actions of people who have not yet suffered a loss or injury due to the defect in their vehicles would not be covered,” the application notes.

That, it adds, is where the constitutional problem — a violation of due process — arises.  “Because people who will, but have not yet, suffered injury from defects in Chrysler vehicles do not know that they will be injured in the future, they cannot receive either meaningful notice that their rights are being adjudicated or a meaningful opportunity to be heard,” it says.

The application contends that the constitutional problem goes beyond claims for injuries that may be suffered because of flawed products made by the auto companies.  There is no realistic way, it argues, to expect that a consumer will monitor legal notices in the newspapers disclosing that a maker of consumer goods has filed for bankruptcy, so the consumer not yet harmed by that product should go to court to make a claim in case they are hurt by it in the future — to make sure they get in before any filing deadline.

While those who are injured in the future by a Chrysler car or truck  may try to sue to undo the ban on potential lawsuits, but the ruling by the bankruptcy court would be a precedent hard to overcome, so a lawyer to file such a lawsuit may be hard to time, according to the consumer groups’ plea.