If every state sues GM, GM might go bankrupt. Then the American tax payers will be footing another bailout. Thus earning GM the moniker, Government Motors (again).
That's what makes me so angry with this stupid economic model. Once these monopolies/oligopolies are inevitably formed (after all, competition breeds monopolies), they are essentially untouchable.
I don't think there's a way to fix this within the current system.
Let them go out of business and everyone learns a valuable lesson: "too big to fail" is a myth.
Here in Brazil we have a somewhat similar problem where the auto industry has been completely subsidized for over 70 years. Our factories are extremely inefficient and customers pay exorbitant amounts of money for a car. But if they remove the subsidies and import restrictions all of these industries would inevitably go bankrupt. Even though this is a good thing (these industries would not exist without these unfair advantages) nobody will ever want to be the bad guy that caused all those job losses.
It's simply not solvable in my view.