Michigan Won't Discipline Lawyers in GM Ignition Case
March 27 2016 - 11:50PM
Dow Jones News
General Motors Co. lawyers who lost their jobs over the auto
maker's ignition-switch crisis will avoid relinquishing their law
licenses.
Michigan authorities in February and March denied requests from
an ignition-switch victim's father to investigate a half dozen
former GM employees, according to documents The Wall Street Journal
reviewed.
Jay Gass, a Tennessee retiree, asked Michigan's Attorney
Grievance Commission to launch the probes and suggested the former
employees be stripped of their state law licenses, the documents
show. Mr. Gass's 27-year-old daughter died in 2014 in a car with
the faulty switch after GM failed for more than a decade to recall
vehicles with the safety defect, now linked to 124 deaths.
The back-and-forth is part of the fallout from GM's
ignition-switch crisis that continues to reverberate, even after
the Detroit auto maker reached settlements with the U.S. Justice
Department, shareholders and thousands of consumers totaling more
than $2 billion. Jurors will deliberate as soon as this week in an
ignition-switch trial under way in a New York federal court, and GM
faces other probes two years after recalling roughly 2.6 million
older vehicles with the defective part.
GM's safety crisis sparked debate over lawyers' obligations to
sound alarms on the defective switches, which can slip from the run
position and disable safety features including air bags. Some GM
lawyers reviewed and settled cases involving the switch that didn't
reach senior executives' desks for years, according to a
company-commissioned report by former U.S. attorney Anton
Valukas.
GM paid a $900 million penalty in September to settle a Justice
Department criminal investigation and admitted to misleading
regulators and consumers about the switch. But no individuals were
charged. None of the lawyers Mr. Gass cited has been accused of
wrongdoing by the Michigan commission or other authorities.
The Michigan commission, a state supreme court arm that polices
lawyer misconduct, rejected his requests, saying the matters were
litigated and resolved. "The tragedies that resulted from various
individuals employed by General Motors are not subject to review by
this agency," a commission staffer wrote in separate letters to Mr.
Gass that the Journal reviewed. The letters supported decisions not
to reveal confidential client information.
A corporate lawyer's obligation to speak up varies by state.
Florida lawyers, for instance, must breach confidentiality to warn
consumers at risk of death or bodily harm. But GM lawyers weren't
required to do so under Michigan's professional conduct rules, said
Stephen Gillers, a legal ethics professor at New York University's
law school.
Michigan and most other states "leave it up to the lawyer's
conscience," Mr. Gillers said. Lawyers also aren't likely to face
discipline by state authorities for failing to alert senior
executives absent complaints from GM, he said.
Mr. Valukas found a longtime pattern of incompetence and neglect
but no intentional coverup in GM's failures with the switch. Chief
Executive Mary Barra in June 2014 said employees were dismissed
over the switch for reasons including failing to act responsibly or
urgently.
"They failed to take the extra step," said Mr. Gass, a
61-year-old former FedEx Corp. manager, referring to GM
lawyers.
The Gass family accepted more than $1 million from a GM
compensation fund supervised by outside lawyer Kenneth Feinberg,
part of the $595 million the company offered victims. But Mr. Gass
expressed frustration that former GM employees lost only their
jobs.
His daughter died March 18, 2014, when her 2006 Saturn Ion with
the defective switch crashed into a tractor trailer on a Virginia
interstate highway. Mr. Gass had received a recall notice days
earlier.
The lawyers Mr. Gass referenced included William Kemp, who
worked at GM for decades and sat on a committee deciding whether to
settle legal cases. Mr. Kemp didn't alert GM's general counsel,
Mike Millikin, to the ignition switch defect until early 2014 and
in hindsight said he probably should have, Mr. Valukas's report
said. The report absolved the since-retired Mr. Millikin.
Mr. Kemp told the Michigan commission that he continually pushed
the ignition-switch issue with other employees, didn't improperly
conceal information and wasn't required to divulge confidential
client information.
His response expressed condolences to the Gass family and added
that the slow pace of GM's investigation of the switch had
frustrated him. Mr. Kemp also said he disagreed with many aspects
of the Valukas report. A lawyer for Mr. Kemp declined to
comment.
"GM's legal team has undergone profound changes," a company
spokesman said. Mr. Millikin in July 2014 told lawmakers he
directed lawyers to alert him to any future potential settlements
involving death or serious injury. His replacement, Craig Glidden,
has worked with regulators on taking more proactive safety
measures. GM endorses regulators' desire for exceptions in
confidential legal settlements so car companies will share
information with government officials.
Write to Mike Spector at mike.spector@wsj.com
(END) Dow Jones Newswires
March 27, 2016 23:35 ET (03:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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