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U.S. judge declines to order 'park it now' notices for GM cars

GM Chief Executive Officer Mary Barra testifies during a House Energy and Commerce hearing on Capitol Hill in Washington April 1, 2014. REUT
GM Chief Executive Officer Mary Barra testifies during a House Energy and Commerce hearing on Capitol Hill in Washington April 1, 2014. REUT

By Jessica Dye

(Reuters) - A federal judge on Thursday rejected a bid to compel General Motors Co to tell customers to stop driving millions of cars that have been recalled for defective ignition switches.

Attorneys representing Charles and Grace Silvas, the owners of a recalled 2006 Chevrolet Cobalt, had sought an emergency order directing GM to issue "park it now" notices for the 2.6 million vehicles that have been recalled since February over the switches. The notices would have told owners that the cars were too dangerous to remain on the road.

GM opposed the motion, arguing that the vehicles were safe to drive as long as nothing extra was attached to the key while it was in the ignition.

U.S. District Judge Nelva Gonzales Ramos in Corpus Christi, Texas, denied the request in a ruling on Thursday, saying that she would defer to the National Highway Traffic Safety Administration, a federal agency that oversees auto safety.

"The court is of the opinion that NHTSA is far better equipped than this court to address the broad and complex issues of automotive safety and the regulation of automotive companies in connection with the nationwide recall," Ramos wrote.

A spokesman for GM, Greg Martin, said the company respected the court's decision.

A lawyer for the plaintiffs, Robert Hilliard of Hilliard Munoz Gonzales, called it a "sad day for tomorrow's victim."

"Unfortunately at GM, when profits come up against morality, profits seldom lose," he said in a statement.

The ruling averts a potentially costly ramp-up in GM's recall efforts. The company has started to ship replacement switches to dealerships, but it has not instructed customers to stop driving the cars. Its website advises customers that it is "very important" to remove additional weight, like fobs, from the key ring, and to make sure the vehicle is in park before exiting.

GM's website also advises consumers about the risk that switches could also malfunction if the vehicle "experiences rough road conditions or other jarring or impact related events."

Some have questioned whether the recall does enough to protect customers from the ignition switch risks. U.S. Senator Richard Blumenthal last month echoed the request for a "park it now" notice, saying that customers should "verify, and do not trust, these recalled cars," according to a March 28 statement.

Last week, GM announced it was taking a higher-than-expected charge of $1.3 billion in the first quarter, primarily to cover the cost of recall-related repairs and courtesy transportation, compared with a previously announced $750 million charge.

At least 13 deaths in Saturn Ions, Chevrolet Cobalts and other models have been linked to the faulty ignition switches, which are prone to being bumped or jostled into accessory mode while cars are still moving. That can shut off engines and disable power steering, power brakes and airbags.

The company is facing numerous lawsuits over the vehicles, on behalf of individuals injured or killed in crashes or customers who say their cars lost value as a result of the recall.

Plaintiffs in those cases have accused GM of knowing about the defect for at least a decade, but failing to recall cars until this year. GM has apologized and said it is moving as quickly as it can to replace the switches.

The case is Silvas v. General Motors, U.S. District Court for the Southern District of Texas, No. 14-89.

(Reporting by Jessica Dye in New York; editing by Matthew Lewis, Bernard Orr)

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