A More Detailed Look At Our Case Against General Motors

This an an excerpt from the document, “Memorandum Opinion Enforcing Provisions of Sale Order With Respect to the Moore, Et Al. Plaintiffs”.

This dispute involves allegedly contaminated groundwater that migrated from property previously owned until July 2009 by General Motors (“Old GM”) and now owned by General Motors LLC (“New GM”) into the water wells of nearby properties that were used by homeowners for drinking water and other normal household uses. The alleged contaminant is sodium chloride (“road salt”), allegedly used in excessive quantities by Old GM and then by New GM to treat the roads on the Milford Proving Grounds (“MPG”) in Michigan during winter months. The plaintiffs in an action pending in U.S. District Court for the Eastern District of Michigan allege that the contaminated groundwater caused personal injury and property damages. New GM asks this Court to enforce the Sale Order entered by the bankruptcy court to accomplish the bankruptcy sale of most of Old GM assets, including the MPG, to New GM, and to enjoin the plaintiffs from proceeding with some but not all of the claims asserted in the pending action.

New GM acknowledged during argument that it assumed liability for any required environmental response costs, whether Old GM or New GM contaminated the groundwater, although, at this stage at least, no government agencies charged with enforcing environmental laws has required remediation.

The Court concludes below that many but not all of plaintiffs’ claims may be asserted against New GM, some because they raise claims for which New GM contractually assumed liability and other because the claims may be asserted against New GM based on its own conduct.

Complicating matters, the plain language of the Sale Order and Sale Agreement are not a model of clarity regarding the contours of New Gm’s liability for common law claims for personal injury and property damage due to environmental contamination.

Judge Gerber previously construed the provisions of the Sale Order and Sale Agreement concerning environmental law in In re Gen. Motors Corp.
In the Sale Decision Judge Gerber interpreted the environmental provisions of the Sale Agreement to require New GM to comply with the Environmental Laws relating to the Transferred Real Property.

New GM did not assume liability for claims relating to the property based on Old GM’s conduct. Accordingly, the Court holds that the Moore Plaintiffs are precluded from proceeding with their common law claims against New GM related to Old GM’s conduct (Counts III through VII).

As explained below, the Court concludes as follows:

• Plaintiffs may not assert common law claims against New GM for personal injury or property damage based on groundwater contamination that migrated from the MPG before the sale of the Property to New GM was completed.
• For personal injury or property damage claims based on groundwater contamination from Old GM’s dumping of road salt before the Property sale to New GM, but which migrated from the Property after the Property was owned by New GM, the Sale Order does not bar such claims.
• In addition, the Moore Plaintiffs are permitted to proceed with their common law claims against New GM related to New GM’s conduct. However, the Moore Plaintiffs must remove their claim for exemplary damages based on conduct of Old GM.

Don’t forget to check out our feature on Jalopnik.com for a more detailed look at this case, including interviews with the plaintiffs and our head attorney, Mr. Alexander McH. Memmen.