Senator Ed Markey (D-MA) holds up a GM ignition assembly during a hearing of the Senate Commerce, Science and Transportation Committee's Consumer Protection, Product Safety, and Insurance Subcommittee on Capitol Hill July 17, 2014 in Washington, D.C.

Senator Ed Markey (D-MA) holds up a GM ignition assembly during a hearing of the Senate Commerce, Science and Transportation Committee's Consumer Protection, Product Safety, and Insurance Subcommittee on Capitol Hill July 17, 2014 in Washington, D.C.

CEO Mary Barra says GM is committed to doing the right thing for the families of people killed and those injured because of faulty ignition switches. Defective switches were installed in approximately 2.6 million cars. GM has hired mediator and attorney Ken Feinberg to evaluate claims and make compensation offers. The individual pay-outs will likely range from a few thousand dollars into the millions. Ken Feinberg, who previously lead the 9/11 victim compensation fund and several other high profile compensation efforts, joins Diane to talk about how he’ll be evaluating claims against GM and what families with losses can expect.

Guests

  • Kenneth Feinberg independent administrator, GM's victim compensation plan former special master, U.S. Government's September 11th Victim Compensation Fund

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. General Motors is preparing to pay millions of dollars to victims of car crashes caused by their faulty ignition switches. Attorney Ken Feinberg, who led the September 11th Victim Compensation Fund, is in charge of the effort. He joins me in the studio to talk about the kinds of claims to be considered and what families of those killed or injured can expect.

  • 10:07:25

    MS. DIANE REHMI'm sure there are many of you who'll want to join us. Call us on 800-433-8850. Send us an email to drshow@wamu.org. Follow us on Facebook or send us a tweet. Ken Feinberg, it's good to have you here.

  • 10:07:46

    MR. KENNETH FEINBERGWell, glad to be here once again. Thank you.

  • 10:07:49

    REHMI'm so glad. Ken, GM has hired you as an independent administrator of their compensation program, which I gather begins on Friday. Tell us who can file a claim.

  • 10:08:07

    FEINBERGYou can file a claim if you suffered a physical injury as a result of the accident, if you lost a loved one as a result of the accident. There are a certain limited number of automobiles that GM manufactured that had potentially this defective switch. If you were in one of those automobiles, if you were the driver, if you were the passenger, if you were a pedestrian walking down Connecticut Avenue, if you were an occupant of a second vehicle that collided with one of these vehicles, all potentially eligible, if you can demonstrate that the defective switch was the proximate cause of the accident.

  • 10:08:55

    REHMThat's going to be tough to demonstrate.

  • 10:08:58

    FEINBERGIt's going to be very difficult, but we'll help. The reason it's so difficult is many of these accidents, as you know, Diane, occurred over a decade ago. The car is long gone. The black box computer that tells you about what happened with the car, unavailable. So we've got some rules that will help. Did the airbag deploy? If the airbag did not deploy, there's a chance the power was off. The ignition switch failed.

  • 10:09:34

    FEINBERGWhat do the photographs of the accident show? What does the police report say? What about the insurance investigation? Did you go to the dealer or an independent mechanic weeks before with a -- explaining there's something wrong, the car is stalling, it stops in the middle of the highway. And we'll work with claimants to try and reconstruct the link between the defect and the accident.

  • 10:10:01

    REHMYou've got 13 deaths, 54 crashes confirmed. Is that correct?

  • 10:10:08

    FEINBERGCorrect. That's what GM says.

  • 10:10:10

    REHMOkay.

  • 10:10:10

    FEINBERGNow, we'll see. We've at least those, but with thousands of potential drivers and accidents, we'll see whether and to what extent those numbers go up.

  • 10:10:23

    REHMI gather you've received about 3,500 inquiries so far.

  • 10:10:30

    FEINBERGSo far. People have started calling, emailing, writing, writing to GM. We think now we're starting to understand maybe this was related to the switch. What should we do? When do we file a claim? How long do we have to file? How long will it take to get the money if we're eligible? All of these inquiries are coming in now.

  • 10:10:51

    REHMNow, some lawyers have said that there are at least 100 deaths.

  • 10:11:00

    FEINBERGSpeculation. Might be, might be more, might be less. I have no idea. Until we can corroborate a claim that's been filed, actually submitted to me for consideration, I have consistently refused to speculate on deaths, physical injuries, serious injuries, less serious injuries. We shall see.

  • 10:11:22

    REHMAre there different categories that you'll be looking at?

  • 10:11:28

    FEINBERGThree categories -- four, really. Deaths, catastrophic injuries, quadriplegics, paraplegics, brain injuries, burn victims, less serious physical injuries resulting in hospitalization. If you're in the hospital overnight or five nights or 20 nights or more than 30, we'll compensate. And then we've added a fourth category, if you were injured, but didn't go to the hospital. But you received medical treatment within 48 hours of the accident, even on an outpatient basis, you may be eligible.

  • 10:12:07

    REHMHow much money has GM set aside for these claims?

  • 10:12:13

    FEINBERGGM last week said they've set aside between 400 and 600 million, but I have a commitment from GM that there is no cap. And when you say set aside, if there are eligible claims to be compensated in excess of 400 to 600 million, GM has categorically, publically stated they will honor those -- all those payments.

  • 10:12:38

    REHMKen Feinberg, you're -- you've got to be the man on the hot seat.

  • 10:12:46

    FEINBERGIt goes with the territory.

  • 10:12:47

    REHMYeah, it goes with the territory and it started back at 9/11.

  • 10:12:53

    FEINBERGThat's right. You'll recall when I was on this show twice to talk about 9/11 and educating the public on how it would work and what the -- it was a -- you performed a great public service educating people. Since 9/11 we've done BP, and GM, One Fund Boston, the Boston Marathon, Virginia Tech, the Aurora, Colo. movie shootings, the Indiana State Fair. There have been some very tragic situations.

  • 10:13:27

    REHMHow has it affected you to go through all this and to hear these stories, to have to say no to some people?

  • 10:13:38

    FEINBERGIt's the -- it's the toughest part of the job.

  • 10:13:40

    REHMYeah.

  • 10:13:41

    FEINBERGThe toughest part is not designing a program, or calculating the amount of money. That is a rather mathematical, legal obligation. It is when you agree to meet personally with any claimant who lost a loved one, who was injured, who wants to see me, not really to talk about money, but more to vent about life's unfairness. "Why me, Mr. Feinberg? Why did I suffer this?"

  • 10:14:14

    FEINBERGOr to come to validate the memory of a lost loved one. "Mr. Feinberg, I lost my husband. We were married for 25 years. And he's gone. And I just want to explain to you what a decent, honorable, human being he was. And now that I've done that, thank you and goodbye."

  • 10:14:33

    REHMAnd what do you suppose has equipped you to do this work?

  • 10:14:40

    FEINBERGI don't know. I don't -- I'm equipped -- I've done it before, so they ask me to do it again.

  • 10:14:46

    REHMRight.

  • 10:14:46

    FEINBERGI must say I think there are thousands, maybe millions of Americans that could do what I do. This is not rocket science. It is not. You brace yourself for the emotion, the trauma of this, when you meet with people who have lost everything. And you become a -- like you, you become a very good listener. And you have to be empathetic. You cannot get angry. These folks have lost terrible personal tragedy. And money, I must say, is a pretty poor substitute for loss.

  • 10:15:24

    REHMIndeed. And what about those who've suffered economic loss, aside from whatever else?

  • 10:15:37

    FEINBERGIf you -- if your car was damaged, if you -- if the resale value of the car has been diminished you're not eligible under this program. You can go to GM, and there are various class-action lawsuits underway to compensate for economic loss of your vehicle. I am focused strictly on death and physical injury. That is all.

  • 10:16:02

    REHMYou mentioned that there are certain GM models. Run through them for us.

  • 10:16:11

    FEINBERGIt's in an official protocol that we have circulated, disseminated, but we're talking about models going back to the early part of 2003. We're talking about Cobalts. We're talking about Ions, Saturns. We are not -- certain Pontiac models. We are not talking about Cadillacs, GM trucks, GM tractors.

  • 10:16:37

    REHMWhat about Pontiac?

  • 10:16:38

    FEINBERGThere are a couple of Pontiac models in certain years. The Pontiac -- I think it's called the H5 and the Pontiac 6. There are a couple of Pontiac models, only a few, that may have had this defective ignition switch. And the protocol lays out -- and the claim form lays out -- all of the models and years of automobiles that are encompassed, potentially, by this program.

  • 10:17:09

    REHMAnd wasn't there an Opel?

  • 10:17:13

    FEINBERGYes. There's an Opel. There's a Daewoo, a foreign car. There are a couple -- there's probably a list of about 20 vehicles, models, years, that are listed in this program, that if you drove one of those automobiles in that year, those models, and were involved in an accident where it might have been the ignition switch, by all means file a claim and we'll evaluate it.

  • 10:17:38

    REHMAnd can people find those makes online?

  • 10:17:44

    FEINBERGYes. The entire claim form, the rules are all online. Or you can mail, email. We have that protocol readily available to be transmitted and disseminated. We'll send it to any claimant who wants more information. They can get a 1-800 number or go online and get that information.

  • 10:18:04

    REHMAnd one final detail. The accident had to have occurred before December 31, 2014. Is that correct?

  • 10:18:17

    FEINBERGThat's correct.

  • 10:18:18

    REHMAll right.

  • 10:18:19

    FEINBERGThis program will consider any accident involving one of these model vehicles, right up until December 31, the end of this year.

  • 10:18:29

    REHMKen Feinberg, he's an attorney in private practice, specializing in mediation and alternative dispute resolution. Short break. Your calls when we come back.

  • 10:20:01

    REHMAnd welcome back. Ken Feinberg is with me. He is, of course, an attorney in private practice specializing in mediation and alternative dispute resolution. He has been hired as an independent administrator of General Motors compensation program. He served in the same capacity pro bono for victims of 9/11 and for the Boston Marathon bombing. He is not in that position for GM. Some claims have already been made against GM. What's happened to them so far?

  • 10:20:53

    FEINBERGIf individuals made a claim against GM, they may have settled that claim and agreed not to sue or not to pursue any legal remedy, having settled the case. They can reopen the case with us. They can come back in now that we know it might be the defective ignition switch. And if we find that that claim's eligible and it's because of the switch, we will reopen the claim and pay additional compensation.

  • 10:21:19

    REHMBut wait a minute, back up. So they made a claim against GM on what basis?

  • 10:21:30

    FEINBERGThey may have said we don't know what caused the accident. It might've been brakes, it might've been part of the engine. We're not sure but unless you want to litigate with us, GM, we're prepared to settle the dispute. We don't know what the cause was. And GM may have settled that case rather than go to court. Now that we know that ignition switch failure may have been the cause, come back in, even though you signed a release, we'll reopen the claim and we'll consider it anew.

  • 10:21:59

    REHMAnd how will you be able to go about finding whether it was the ignition switch or not?

  • 10:22:10

    FEINBERGWhat does the police report say? What does the -- if the car is available, let's examine the automobile. What does the black box data in the automobile say? What does the insurance company investigation report say? What do the photographs show? If the photographs show a frontend collision and the airbags did not deploy despite a frontend collision, chances are it might be the ignition switch shutting off the power so the airbags didn't work? We will reconstruct through circumstantial evidence what happened in each individual case.

  • 10:22:46

    REHMHere is an email on that very point from Charles. He says, "I've heard that as a safety feature airbags are meant to deploy even after the car shuts off. How can airbag deployment be such a black and white question?"

  • 10:23:09

    FEINBERGWe have looked into that issue for the last three months. I have concluded that only in the rarest of hypothetical situations -- unlike that email, only in the rarest of hypothetical situations does that airbag deploy even if the power is off. We will not allow a claim to be deemed eligible if the airbag -- if the police, for example, say the airbag deployed, it is so unlikely to be directed to the ignition switch, we don't want to be inundated with thousands and thousands of airbag deploy claims.

  • 10:23:48

    REHMNow I have to ask you a question, Ken Feinberg. You, along with millions of other people, heard those GM executives testify that there was nothing wrong with that ignition switch. And yet they knew ten years ago that something was wrong with that ignition switch. If you were a government prosecutor, how would you feel about those folks up there lying?

  • 10:24:27

    FEINBERGI have two answers to that. First, if I was the government prosecutor, I would examine all of the evidence, all of the alleged false statements, all of the information that's coming to light. And I would look at it all and then I would decide whether to go forward with a criminal investigation or a criminal prosecution or not. That's my first answer. I would look at everything and make that decision, which they're going to do.

  • 10:24:52

    FEINBERGMy second answer, I must say in the last four months where I've been asked to design this program, asked by Mary Barra and chief counsel Mike Millikin, both of them asked me personally, I have received nothing but the absolute full cooperation of GM. I can't fault GM in any way for how they have assisted me in designing this program, agreeing to be bound by it. They won't second guess me. They won't appeal my decisions. It's an uncapped fund.

  • 10:25:29

    FEINBERGContributory negligence of the driver, intoxication, speeding, texting irrelevant. Not part of this inquiry. We're not even going to look at the condition of the driver. We are focused on only the ignition switch and the automobile. So from my perspective I have -- I am pleased and gratified that GM has been so supportive of this effort.

  • 10:25:57

    REHMBut going back to the earlier testimony as if you were a government prosecutor, should somebody have gone to jail over this?

  • 10:26:11

    FEINBERGAsk the government prosecutor on "The Diane Rehm Show" when they're through with their investigation probably in the next few months.

  • 10:26:19

    REHMYou think it'll happen?

  • 10:26:20

    FEINBERGI have no idea.

  • 10:26:21

    REHMOkay.

  • 10:26:21

    FEINBERGI am not privy to that information.

  • 10:26:25

    REHMOkay. Now let's get back to how you will determine how much money a person say who lost a limb might get versus a person who lost a life might get.

  • 10:26:44

    FEINBERGCategory One death. If a person lost a life then the surviving spouse or parents or siblings, whoever is authorized by the court to be the personal representative of the victim, can file a claim if eligible, lost a life, they will be -- they will get paid the way courts and juries pay these folks every day in every court in our country.

  • 10:27:10

    FEINBERGWhat would the victim have earned but for this tragedy? Add to that, under the protocol, $750,000 in pain and suffering for the death of the victim and $300,000 in addition for each surviving spouse or dependent. And add it up. And unless there are extraordinary circumstances that the claimant wants to bring to my attention, we can calculate those damages and that amount, in the millions of dollars in many cases, within a few weeks.

  • 10:27:51

    REHMHow about a child who may have lost a limb?

  • 10:27:57

    FEINBERGA child who lost a limb, If that child under that hypothetical was hospitalized, let's say, in rehabilitation for a month or two, we have under the protocol a flat amount lost limb voluntary offer of $500,000, depending on how long you were in the hospital. If the tragedy is much worse, it's brain injury, permanent home care, quadriplegia, then millions and millions of dollars might be paid in such a case.

  • 10:28:33

    REHMSo as I understand it then, will you, Ken Feinberg, have an interview, a personal one-on-one interview with each and every one of these claimants?

  • 10:28:55

    FEINBERGThe answer to that is, if the claimant is filing a death claim or if the claimant is filing the claim for one of these catastrophic injuries, I will meet personally with the claimant. We will set up a time and a place. And I have offered to meet with any claimant. Now, I haven't offered to meet with claimants who suffer less serious injuries because I don't want to be inundated with thousands of people. But if it is a death -- like 9/11, if it is a death claim or a catastrophic injury claim, yes, at the option of the claimant, strictly optional, I'll agree to meet.

  • 10:29:35

    REHMNow in this particular situation, many of the deaths and injuries were among young people. So how then do you come up with a compensation for a lifetime?

  • 10:29:55

    FEINBERGThat's right. That's a very good question. Now we'll do it the same way courts and juries do it and the way we did it with the 9/11 fund, as you'll recall. We will assume if a young driver was killed -- unemployed, going to college or living at home, or looking for a job, we will assume, we will make an assumption in the law that the person was earning approximately $46,500 a year.

  • 10:30:25

    REHMWhy do you pick that figure?

  • 10:30:27

    FEINBERGBecause the bureau of labor statistics tells us that the -- a 25-year-old, not a 17-year-old or a 16-year-old, but a 25-year-old entering the job market earns about that amount. We'll assume, for purposes of calculating an award, even though you're unemployed, even though you're living at home, even though you're going to college on a scholarship, we'll assume that at 17 years of age you were earning 46,000 a year.

  • 10:30:58

    FEINBERGWe will run that out to a work life, Social Security of 62 or 65 and that will likely result in a compensation award of -- and pain and suffering -- I add the 750 for the death -- somewhere around a million-and-a-half dollars for that 17-year-old without any other special circumstances. Somewhere we will offer something like, voluntarily, an offer of about a million-and-a-half dollars if the family wishes to take that money.

  • 10:31:28

    REHMAnd how much rejection do you think you'll get and pushback saying, you know, my 17-year-old had a brilliant career in physics ahead of him. How come you're only allowing me that?

  • 10:31:52

    FEINBERGThat's a very, very difficult question. My reaction is that in 9/11, in BP, over 90 percent of all the claimants accepted the money. What is the alternative? If you want to go file a lawsuit and try and get, you know, 8 million, 10 million, go ahead. But how likely will that lawsuit succeed? How long will it take? How much uncertainty? What is the cost to you in even going forward? The inability to -- constantly reminded every day of this in the courtroom.

  • 10:32:31

    FEINBERGNow I think, in response to your question, I hope most people will evaluate the program, voluntarily see the wisdom of the program and accept the award and move on.

  • 10:32:46

    REHMAnd you're listening to "The Diane Rehm Show." As we said, the program begins this Friday. How quickly might you assume the payouts to families would begin?

  • 10:33:03

    FEINBERGA simple claim, which isn't complicated in terms of the dollars and the backup, the documentation, within 90 days a check. If it's a complicated claim, within 180 days.

  • 10:33:17

    REHMWhat's a complicated claim?

  • 10:33:19

    FEINBERGMr. Feinberg, I lost my daughter. She was the president of a bank. She was on three corporate boards. She had a pension. She had special compensation. So when you're calculating the damages, there are all of these documentary complexities that add into the mix, that'll take a little extra time.

  • 10:33:40

    REHMAll right. We've got numerous callers. Let's open the phones, 800-433-8850. First to Citrus Springs, Fla. Hi there, Ann. You're on the air.

  • 10:33:57

    ANNHi, Ann -- hi, Diane. I appreciate you taking my call.

  • 10:34:01

    REHMSurely.

  • 10:34:02

    ANNAnd he answered some of the questions but I have a personal comment I'd like to make first and then a couple other questions. About five, ten years ago I was in a store. My husband was waiting for me outside in the car. And a stranger approached and told him that for five bucks he would show him how to not have the mileage increase on the vehicle. And it was by turning the car on and then jiggling the key. And I was wondering if that pertains to this, that sometimes people were doing this to save mileage on their car.

  • 10:34:35

    ANNAnd also I have some questions about, I think (unintelligible) ...

  • 10:34:40

    REHMHow about just one question, please.

  • 10:34:44

    FEINBERGI think the answer to that question is that's the first time I've heard of that. That's an -- this program doesn't contemplate changed mileage claims due to ignition switch jiggling.

  • 10:34:58

    REHMOkay. And one other question, Ann. I think she's gone. Let's go to Jennifer in Ann Arbor, Mich. Hi, you're on the air.

  • 10:35:13

    JENNIFERHi, thanks for taking my call.

  • 10:35:14

    REHMSure.

  • 10:35:15

    JENNIFERAnd I'm from Maine originally so I'm really enjoying listening to Mr. Feinberg's accident today. Great memories.

  • 10:35:21

    REHMGood.

  • 10:35:22

    JENNIFERLovely. I have a question about what happens when there is a recall on one of these vehicles, they fix the recall and then the recalled item still breaks for the same reason as the original recall? That actually happened to us with a Cobalt. And GM is telling us that we are responsible for paying to fix that piece now. And I was wondering what his comment would be about that.

  • 10:35:48

    FEINBERGNow again, if it doesn't involve an accident with a physical injury or death, I'm not -- I have no jurisdiction over a claim to pay for a repair. That doesn't -- I don't cover that. I do agree with you there are a number of claims that have been -- that will be filed with me where an accident occurred after the defective ignition switch was reinstalled in an eligible vehicle. And it was the new ignition switch that failed.

  • 10:36:21

    FEINBERGSo your hypothetical, although it's not part of my fund, is not at all implausible. And you should talk to GM about that.

  • 10:36:32

    REHMJennifer, did you have an accident?

  • 10:36:36

    JENNIFERNo, we have not. Thank God. However, knowing that we're driving a car that had that recall part repaired and that it's still not functioning and that GM is actually refusing to repair it is a little bit unnerving. It certainly doesn't make me want to buy another GM vehicle or give that vehicle over to my children when they're old enough to drive.

  • 10:36:57

    FEINBERGYou should be aware that there are numerous lawsuits pending involving situations like yours where there's been economic harm, not physical injury or death, but economic harm caused by ignition switch defects. And those claims, I believe those lawsuits are pending now in federal court in New York City.

  • 10:37:21

    REHMKen Feinberg. He's an attorney in private practice specializing in mediation and alternative dispute resolution. He is acting as the mediator for General Motors. Short break, more of your calls. Stay with us.

  • 10:40:02

    REHMAnd welcome back. Ken Feinberg is with me. He, of course, previously, served as special master of the U.S. government September 11th Victim Compensation Fund. He also served as -- he was appointed by the Commonwealth of Massachusetts to administer the Victim Assistance Fund established after the Boston Marathon bombings and he did both of those pro bono.

  • 10:40:42

    REHMHe is not doing pro bono work for GM. In fact, he is going to be sorting through probably hundreds if not thousands of claims. Here's an email from John who says, "I'm somewhat offended by what is presented in a sincere way, but which puts the majority of the burden on those people who suffered an accident. Had GM addressed its faulty switches a decade ago, when the evidence was fresh and available, these people would have had their day in court.

  • 10:41:34

    REHMInstead, Mr. Feinberg is presenting a very reasonable-sounding argument that basically says, quote, 'only under these conditions.' GM buried evidence and apparently lied to feds who then bailed the company out. This subterfuge is geared to paying out pennies on the dollar for pain and suffering."

  • 10:42:07

    FEINBERGWell, that's a very interesting argument that's made by that listener and it's well articulated. I have a couple of answers. One, the program, don't forget, that I've -- that begins Friday is entirely voluntary. If somebody believes that they can do better, that they want to bring GM to heel, that they want to punish this company for its wrongdoing, they have every right to reject this program and litigate in the courtroom in an effort to receive not only compensatory damages, but punish GM with punitive damages.

  • 10:42:52

    FEINBERGThat is always an option open to any claimant. Second, I think that we will -- I am determined to work with the very claimants referenced in the email to try and reconstruct -- I realize it is not easy 10 years later for some of these accidents, but to try and reconstruct the circumstances surrounding the accident. And finally, I believe that this program raises much less of a barrier to success in getting compensated than if you go to court.

  • 10:43:32

    FEINBERGIn court, in the adversarial system where the burden is heavily on the claimant to demonstrate a link, I think that we will be much more liberal and much more willing to find a compensatory claim without reference to the contributory negligence of the driver than if you went to court and faced those hurdles.

  • 10:43:54

    REHMTwo points I would raise. The irony, if that's the right word, that during this whole period, GM was experiencing a bailout from the U.S. government and from U.S. taxpayers. Second, the public relations catastrophe that GM has suffered -- you just heard our last caller saying, I ain't never buying another GM car -- how serious do you think that part of the catastrophe is?

  • 10:44:44

    FEINBERGOh, I think it's dominant. When you listen to what Mary Barra, the CEO of General Motors, has said publically about doing the right thing, trying to demonstrate a communitarian responsibility to the nation and to the victims, a decision to delegate all of this authority to me without the right to appeal my decisions, no cap on the amount of funds, I think you're focusing on a very important element here that entered into GM's thinking, to wit we are a public citizen, we've been bailed out.

  • 10:45:27

    FEINBERGWe want to do the right thing. We want to demonstrate our determination to do the right thing. What better way to do it than to allow Mr. Feinberg to set up this independent program to evaluate claims, pay whatever he deems appropriate, without any right of us at GM in Detroit to second guess or question those decisions.

  • 10:45:52

    REHMDo you think GM could be forced out of business as a result of all the claims and the compensation?

  • 10:46:08

    FEINBERGI don't think so. I think General Motors, even though it has recalled millions of vehicles -- forget this program -- millions of vehicles, even there are all suits of economic loss and economic damage lawsuits pending, there's this program that I'm administering, I think GM has the financial wherewithal and, frankly, the historical, at least, reputation and Ms. Barra's determination to do that right thing, I think they will weather this and move on and hopefully be profitable.

  • 10:46:42

    REHMThere are a lot of people who wonder whether since for the first time GM chose a woman to head the company, she was being thrown under the bus.

  • 10:46:58

    FEINBERGIf you know Mary Barra as I've got to know her over the years, no one throws her under the bus.

  • 10:47:05

    REHMGood. Glad to hear that. Let's go now to Paul in Boston, Massachusetts. Hi, you're on the air.

  • 10:47:14

    PAULGood morning, Diane.

  • 10:47:15

    REHMHi.

  • 10:47:17

    PAULI just called to compliment Attorney Feinberg 'cause I've been a fan of him for a while. I've never needed his services, but I'm in awe. He's a modern day Job. And when it's all said and done, he's able to figure out the right way to do things -- or maybe Moses is more accurate, but I don't think he would be involved in this mess, being paid or otherwise, if he felt that his integrity or his honesty was going to be compromised.

  • 10:47:46

    PAULHe can't be bought so therefore, it makes him the perfect guy to do this program. And I don't know how -- at times, it must bother him when he does take part by himself because he forced to make some decisions that no one should be made -- have to be made, you know?

  • 10:48:05

    FEINBERGIt's comments like Paul's that reinforce your resolve to do the job, do it right, brace yourself for the emotion and for the criticism. It happens. There's nothing that I can say that will alleviate the sorrow or the pain. All I can do -- and I try and explain to people -- is it's small solace, but provide some compensation so there's maybe one less thing to worry about going forward, but it is pretty small solace indeed.

  • 10:48:42

    REHMAll right. To Rock in Green Lawn, New York. Hi, you're on the air.

  • 10:48:50

    ROCKGood morning, Diane. I love your show.

  • 10:48:52

    REHMThank you.

  • 10:48:52

    ROCKSo glad I got through. And congratulations on your recent award.

  • 10:48:56

    REHMOh, thank you.

  • 10:48:58

    ROCKI work at a GM dealer so I'm a little biased. I sell the product and I understand the quality control compared to percentages and other, you know, vehicles. And my question was about the physics. If you just had your key and a remote on the ignition switch versus a lot of weight dangling, is that a factor in any of this?

  • 10:49:21

    FEINBERGYes. I think it is. I'm not an automotive engineer. My understanding is it is the weight on the keychain that kicks against the ignition causing the switch to go into the auxiliary or off position.

  • 10:49:38

    REHMBut it shouldn't have been designed that way.

  • 10:49:40

    FEINBERGIt shouldn't. That's right. That's the problem. The torque is impacted and it shouldn't be designed that way and I think that's the basic reason that GM has set up this program. I am curious whether a dealer in upstate New York has had any claims come into the mechanics garage in which the driver is complaining of the key switch or the ignition switch or the sudden stalling of the vehicle while on a highway or something like that.

  • 10:50:14

    REHMWhat about that, Rock?

  • 10:50:16

    ROCKI'm not in the service department, but I am at the dealership, you know, currently and I do see the recalls being taken care of very meticulously. Like, they're not just shipping a bunch of parts. It's each individual VIN of the vehicle gets a certain switch or that one. And it's a tedious process, but it's underway now. They're doing it as fast as they can and it does take a lot of time from the service department, I know.

  • 10:50:44

    REHMThanks for calling, Rock.

  • 10:50:46

    ROCKMy pleasure.

  • 10:50:47

    REHMAll right. And we have an email from, let's see, I think it's James who wants to know whether the payouts are going to be a tax deduction for GM.

  • 10:51:08

    FEINBERGWe say on the claim form that every single claimant receiving compensation should consult with his or her tax advisor or accountant and decide whether, under the circumstances of the claim, whether it's compensable -- whether it's taxable or not.

  • 10:51:23

    REHMBut what about GM? Can GM claim this payout as a tax deduction?

  • 10:51:33

    FEINBERGI haven't got the slightest answer to that question. I think GM and its bevy of tax lawyers will decide whether and to what extent it's a taxable event. That, I cannot answer.

  • 10:51:42

    REHMWow. Now...

  • 10:51:43

    FEINBERGI do know that 9/11 and Boston Marathon, those awards were not taxable. I can't speak for this particular for-profit corporation that's paying this money.

  • 10:51:56

    REHMRight, right.

  • 10:51:57

    FEINBERGAnd I just urge everybody, before accepting the money, to make sure they know whether it's a taxable event or not.

  • 10:52:03

    REHMAll right. To Dale in Denton, Texas. You're on the air.

  • 10:52:08

    DALEHi. My question is on what level of false negatives are you expecting in the overall claim population and is the burden of proof for claims that are 10 years old, would that be less than for claims that came out this year.

  • 10:52:26

    FEINBERGNo.

  • 10:52:26

    DALEAnd how do you evaluate that? Ten year old, ten years ago I can't remember what keys I had on my keychain.

  • 10:52:34

    FEINBERGIt doesn't matter whether the claim was 10 years old or yesterday, doesn't matter in terms of the burden of proof. It's more difficult to demonstrate a link between the ignition switch and the accident 10 years ago. The car is probably gone and we'll have to reconstruct the accident from circumstantial evidence. An accident that occurred yesterday or up until December of this year probably the car is readily available and the easiest way to prove ignition switch defect is to look at the automobile involved in the accident.

  • 10:53:04

    FEINBERGSo the burden doesn't change legally, but you're right. It'll be much more difficult to prove an older claim and that's why work with those claimants as well.

  • 10:53:13

    REHMAnd you're listening to "The Diane Rehm Show." We have an email from Carl who says, "the National Highway Traffic Safety Administration recently released a study on the economic and societal impact of motor vehicle crashes in 2010. There estimate of the economic impact of a fatality is $9,145,998. Why has Mr. Feinberg taken so much lower a figure for compensating victims of the GM ignition switch defect?"

  • 10:54:04

    FEINBERGFirst of all, there may be claimants who will receive substantially in excess of 9 million. I can surmise there may be a terribly injured young victim in a wheelchair who may get 10 million, 12 million, $14 million. Secondly, that study involving $9 million is a regulatory study involving the adverse impact of a crash, not only on the individual, but the society as a whole.

  • 10:54:33

    FEINBERGI'm focused strictly on compensating the loss suffered by the individual victim, not society as a whole.

  • 10:54:41

    REHMAnd another email from Sharon who says, "I find it offense that some lives are worth more than others. If you make a lot of money, then your family gets more than a middle class plaintiff. Suffering the permanent loss of a loved one feels the same whether you're rich or you're poor."

  • 10:55:10

    FEINBERGThat is a fabulous comment. In the Boston Marathon bombings, one size did fit all whether you were a banker who lost a loved one or an unemployed laborer. Here, and in 9/11, remember, we are copying the American legal system. That criticism that we just heard you articulate is a criticism directed not so much at my fund, as at the American legal system which always says -- has always said if a banker is hit by an automobile, she will get more than the waiter or the busboy who was hit by an automobile.

  • 10:55:52

    FEINBERGThat is the American legal system and that criticism that's been addressed in that email is a subject of a philosophic discussion for a whole semester in law school. But the legal system we're tracking, the very system that she's criticizing.

  • 10:56:09

    REHMAnd one final email from Lindsey who says, "I'm curious about Mr. Feinberg's compensation, whether he is receiving a flat fee from GM or if not, what are the variables?"

  • 10:56:27

    FEINBERGA flat fee. There's no way I can get paid by GM based on the number of claims I find eligible or something. The program would have no credibility whatsoever. It is a flat fee and people will have to witness how quickly we get the money out, how generous we are, that's the fairest test.

  • 10:56:47

    REHMKen Feinberg, he is an attorney in private practice. He is going to be the special attorney mediating the GM claims from victims and their families. That whole process begins this Friday. Thank you for your work and thank you for being here.

  • 10:57:17

    FEINBERGThank you.

  • 10:57:18

    REHMAnd thanks all for listening. I'm Diane Rehm.

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