GM Faulty-Ignition Claims Kept in NYC

(CN) - Claims that General Motors ignition switches malfunction, causing drivers to lose control and crash, will not move to Tennessee, a New York federal judge ruled.

Tiffany Sumners had been driving in Tennessee at "highway speed" when her Chevrolet Cobalt's steering, brakes and airbag locked up, her lawyer Jere Beasley said.

The car then crossed two lanes of traffic, crashed into a tree and caught fire. Tiffany died and her son, Grayson, was injured.

Grayson and his dad, Tyson, sued General Motors and AutoFair Chevrolet in Tennessee on May 9, blaming the crash on a faulty ignition switch.

"They covered up a known defect for at least 10 years that caused at least 300 deaths," the Sumners' lawyer said. "We suspect more. I think that was a conservative number."

GM, removed the case to the Southern District of New York where federal multidistrict litigation involving 73 similar cases is ongoing.

In July, U.S. District Judge Thomas Thrash Jr. remanded to state court a similar suit by a Kenneth and Mary Melton, a couple who is blaming their daughter's death on the ignition defect.

The Sumners moved to remand their case to Tennessee state court, as well, arguing that they are not completely diverse from the defendants, but U.S. District Judge Jesse Furman denied the motion Wednesday.

Precedent "makes New GM a citizen of Delaware and Michigan, as New GM's sole member is General Motors Holdings LLC, which, in turn, has only one member as well: General Motors Co., which is a publicly traded corporation organized under the laws of Delaware with its principal place of business in Michigan," Furman wrote. "Although plaintiffs speculate that one or more shareholders of General Motors Co. are likely Tennessee citizens, that possibility is irrelevant to the analysis."

AutoFair is not a citizen of Tennessee, either, the ruling states.

"Putting aside the fact that AutoFair was apparently dissolved in 2009, AutoFair had only two members when it was a going concern: AutoFair Investors L.P. and AutoFair Automotive Management LLC," Furman wrote. "AutoFair Investors L.P., in turn, has one general partner, a corporation organized under the laws of Delaware with its principal place of business in New Hampshire. The remaining limited partners of AutoFair Investors L.P., and all members of AutoFair Automotive Management LLC are natural persons, none of whom was a citizen of Tennessee when plaintiffs filed their complaint on May 9, 2014, or when New GM removed the case to federal court on June 13, 2014."

GM filed for Chapter 11 bankruptcy in June 2009. The following month, a federal bankruptcy judge in Manhattan let the company sell substantially all of its assets to a newly formed corporation, now known as General Motors Co.

The automaker recalled millions of vehicles after the Meltons settled their case in 2013. The Meltons' case is ongoing because they want to rescind the settlement and return the money.

Though GM has admitted to 13 deaths caused by faulty ignition switches, the U.S. Auto Center puts it at 303 deaths, Nashville news source WSMV reports.

GM reportedly reaped $77 billion in revenue in the first six months of 2014.

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