Pickup Games

How a giant lawsuit against General Motors could leave lawyers with millions - and Texas truck owners breathing fumes

"Good things happen to good people," jokes Baxter.
He then makes a more serious attempt to justify his fee. "I think the big difference was I started talking to the GM lawyers earlier than the [25 firms in Philadelphia]," he explains. "I don't want to say that we were the lead lawyers. But we started the dialogue about the discovery mode"--how the two sides would pursue pretrial activities.

About the $1,000 coupons, Baxter is unequivocal: it represents the best deal he could muster under difficult circumstances. "The one reason we got anything in that case," he declares, "is because we worked a miracle."

Baxter says his case collapsed when he discovered he could prove no economic damage to the GM truck-owners. Despite all the bad press GM received, the besieged pick-ups never stopped fetching top dollar in the used-car market, says Baxter. "Our theory was the publicity was going to affect the price. We were sitting there every month looking at the blue books and waiting. But people like those trucks. They like those big gas tanks that you don't have to fill up so often."

Without proof of economic harm, Baxter contends, GM wasn't going to have to pay anything. "Clearly the best thing that could happen in this lawsuit would be, under our theory, for General Motors to give each truck owner in the State of Texas a brand new truck, take their truck off the road, and crush it," Baxter said in court during an October 1993 hearing. "Now, that is the very best that we could ever hope for.

"But," Baxter declared, "that is not obtainable. It is not obtainable through a jury finding. It is not obtainable through a court order. And unfortunately, we could not talk General Motors into it. They keep talking about bankruptcy. It simply was not a viable deal."

It's true that GM has won series of victories in its defense of the side-saddle pickup fuel tanks. The first came after the NBC newsmagazine "Dateline" broadcast a report including film of the truck blowing up upon impact in a simulated crash. GM discovered in court that the NBC crew had attached rockets to the fuel tanks. The revelation brought an embarrassing public apology from NBC--and triggered the resignation of NBC News President Michael Gartner.

In June 1994, GM persuaded an appeals court in Georgia to overturn the $104 million Atlanta personal-injury verdict.

And in December, the automaker convinced the U.S. Department of Transportation to cancel any recall plans. In a settlement with the agency, GM agreed to spend $51 million over five years on vehicle-safety programs, including $4 million for 200,000 child car seats for impoverished families.

It was a tiny price for a company with $140 billion in annual revenues--especially compared to the projected cost of recalling all the disputed GM trucks.

Only the motion to object, filed in the name of the Godbeys and one other truck owner, would buck the giant automaker's winning streak.

The Godbeys had contacted the Center for Auto Safety in response to a suggestion from WFAA reporter Alan Berg, who had begun reporting the pickups' problems. The couple had previously called GM headquarters in Detroit to complain, but received no response.

In July 1993, the Godbeys found the letter from Sam Baxter in their mail. It detailed the $1,000 coupon offer, good only for the purchase of a new truck during a 15-month period--and worth only $500 if sold to someone else.

"I just thought it was ridiculous," recalls Ron Godbey. "What they were offering was worth nothing." The insurance salesman fired back a letter to the Marshall courts, stating that he wanted to register as an objector to the proposed settlement.

Out of 645,000 Texas truck owners identified in the GM litigation, just 582--including the Godbeys--wrote to formally object. The cities of Dallas and Austin, municipalities with hundreds of the controversial GM trucks in their fleet, were among the objectors.

The Godbeys did not pay much attention to the two paragraphs at the bottom of the fifth page of Baxter's letter that described attorney's fees. "If the Court approves the settlement of the case," the letter vaguely explained, "the Court will determine an award of attorneys' fees and reimbursement of costs and expenses, which would be paid solely by General Motors and would not reduce directly or indirectly any of the Settlement's benefits to Class members."

Baxter made no mention of the $9.5 million fee he and his co-counsel were to share. He later argued in court that he could not list an exact figure because at the time of the settlement announcement, GM had not yet formally agreed to the amount.

In September 1993, the Godbeys received a phone call from Steve Gardner. He told the couple that he had gotten their names from the Center for Auto Safety, and he wanted to represent them as objectors to the settlement in the Marshall court.

Though the Godbeys didn't know it, their caller was one of the best-known attorneys in Texas. A native Texan, Gardner had served for six years as an assistant Texas attorney general, charged with handling high-profile consumer-protection cases.

In that role, Gardner had battled cereal-maker Kellogg; the cable TV firm Tele-Communications, Inc; TRW, one of the nation's largest credit bureaus, and even General Motors, which he accused of using trumped-up claims to sell its Cadillacs.

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