A federal district court judge in New York City’s Southern District, applying Virginia law, recently invoked the concept of a manufacturer’s “post-sale duty to warn” to hold an automobile company potentially liable for failing to warn about an alleged defect in a car that it technically did not even manufacture. The ruling came in the context of the General Motors Ignition Switch multidistrict litigation (14-MD-2543).
Manufacturer versus Post-bankruptcy Successor
The plaintiff’s compact car went off the road, but its airbags failed to deploy because of an alleged defect in the car’s ignition switch that caused the airbags to move to the “off” position. Judge Jesse Furman denied a motion for summary judgment brought by the “new” GM, the post-bankruptcy successor to the “old” GM (OGM), the car’s actual manufacturer, noting, for example, that “new GM” (NGM) had assumed OGM’s warranty obligations to its customers when NGM entered into the 2009 sales agreement with OGM. The Court further noted the contacts between the plaintiff and NGM under Virginia state law might indeed recognize a post-sale duty to warn about OGM’s allegedly defective ignition switches. Additionally, he stated, “there is evidence that new GM had ‘actual knowledge’ of the ignition switch defect when it acquired the assets of old GM.” Continue Reading Revisiting the Post-Sale Duty to Warn