There are a lot of losers in Chrysler’s bankruptcy.
Shareholders, taxpayers, employees and car dealers are going to take a hit in some way. But because of a more obscure part of the auto maker’s federal bankruptcy case, you can add another group to the list: Chrysler drivers who get in an accident.
Their right to sue the re-formed car company about defective vehicle claims has apparently evaporated. Or, in the words of U.S. Bankruptcy Court Judge Arthur Gonzalez, “They are extinguished.”
In Middle Georgia, that includes the Davis family. They lost Jimmie Davis in March 2007 when the Jeep Grand Cherokee he was driving flipped on Ga. 27 outside Americus. Davis was trapped in the vehicle, according to coverage in the Hawkinsville Dispatch and News.
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His family contends that the Jeep’s roof wasn’t strong enough, a condition that caused “a gruesome death,” daughter Jan McGuire wrote in a recent letter to The Telegraph.
Chrysler spokesman Mike Palese, while not commenting on this case specifically, said the company is “saddened any time someone is injured in one of our vehicles.” He also said all company vehicles “meet or exceed” federal safety standards, including roof strength standards, something borne out by independent consumer group testing.
The Davis family filed a lawsuit in Sumter County State Court in January, but Chrysler hasn’t answered the complaint yet, McGuire said. Now it seems the case has nowhere to go. Said McGuire: “This is a gross miscarriage of justice.”
It’s hard to say how many people will be affected by the change in liability rules, but it’s fair to say the number could grow significantly. There are about 10 million Chrysler vehicles on the road, according to the company. And the court’s ruling doesn’t just affect people who have already been in an accident, but those now driving Chrysler brand vehicles who have an accident in the future.
And General Motors, which is larger than Chrysler, has also filed bankruptcy.
Its case could take a similar path through the courts.
“You’ve got a lot of families riding around right now that don’t realize the storm that’s coming their way,” said John Ramsey, a Houston, Texas, attorney who specializes in automobile liability cases and represents the Davis family.
Consumer advocacy groups have been fighting the change, but with the Supreme Court’s recent decision not to review Chrysler’s bankruptcy, it’s not clear where the case can go.
Members of Congress are hearing from constituents, but it’s not clear what they can do about it, said Doug Moore, U.S. Rep. Jim Marshall’s press secretary.
“We are very concerned about it,” Moore said. “This is something that everyone (in Congress) has heard about.”
Congress can’t pass a retroactive law to address the situation, but it could set up a victim’s fund to help people financially, said Clarence Ditlow, with the Center for Auto Safety.
But the bottom line for Ditlow is that the situation isn’t fair.
“There’s a lot of difference between a bank getting 30 cents on the dollar (for Chrysler stock), but a guy in a wheelchair is living on Medicaid the rest of his life,” Ditlow said.
Ramsey said some members of Congress are petitioning the White House, and that “unless the Obama administration steps in, I really don’t see what else could happen.”
Jeep Grand Cherokees such as the one the Davises were driving meet federal standards for roof strength, according to the Insurance Institute for Highway Safety, which performs product tests.
However, a March 2008 report from the institute labelled the Jeep’s roof “one of the weakest” of the 11 sport utility vehicles tested.
“This is a safety debate that’s been going on for a long, long time,” said Russ Rader, spokesman for the institute. “We have argued that the federal standard is too weak.”
Chrysler spokesman Palese said bankruptcy wasn’t a perfect answer for the company, but it’s better than liquidation.
“Bankruptcy is a very difficult and challenging process,” Palese said. “It was the only option available to us to create a viable company.”
To contact writer Travis Fain call 744-4213.