Groman v. General Motors LLC.
Filing
248
MEMORANDUM OPINION AND ORDER: re: (4679 in 1:14-md-02543-JMF) MOTION for Summary Judgment Against Plaintiffs' Claims for Benefit-of-the-Bargain Damages filed by General Motors LLC. Accordingly, New GM's motion for summary judgment as to Pl aintiffs' claims for benefit-of-the-bargain damages is DENIED without prejudice. Counsel should confer on whether and how the motion should be renewed and be prepared to address that question at a future status conference. The Clerk of Court is directed to terminate Docket No. 4679. And as set forth herein. SO ORDERED. (Signed by Judge Jesse M. Furman on 4/03/2018) Filed In Associated Cases: 1:14-md-02543-JMF et al.(ama) Modified on 4/3/2018 (ama).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE:
04/03/2018
14-MD-2543 (JMF)
14-MC-2543 (JMF)
GENERAL MOTORS LLC IGNITION SWITCH LITIGATION
This Document Relates To All Actions
MEMORANDUM OPINION
AND ORDER
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JESSE M. FURMAN, United States District Judge:
[Regarding New GM’s Motion for Summary Judgment with Respect to
Plaintiffs’ Claims for Benefit-of-the-Bargain Damages]
In this multidistrict litigation, familiarity with which is presumed, Plaintiffs seek recovery
from General Motors LLC (“New GM”) on behalf of a broad putative class of General Motors
car owners and lessors whose vehicles were subject to recalls for certain defects. They allege
that they were harmed by, among other things, a drop in their vehicles’ value due to the defects.
Thus far, the Court has entertained two partial motions to dismiss, addressing — in lengthy
opinions — the legal validity of Plaintiffs’ claims under federal law and the laws of fifteen states
and the District of Columbia. See In re: Gen. Motors LLC Ignition Switch Litig., No. 14-MD2543 (JMF), 2017 WL 2839154 (S.D.N.Y. June 30, 2017), as amended on reconsideration by
No. 14-MD-2543 (JMF), 2017 WL 3443623 (S.D.N.Y. Aug. 9, 2017); In re: Gen. Motors LLC
Ignition Switch Litig. (“TACC MTD Op.”), No. 14-MD-2543 (JMF), 2016 WL 3920353
(S.D.N.Y. July 15, 2016). To the extent relevant here, the Court largely upheld Plaintiffs’ theory
of damages known as the “benefit-of-the-bargain defect theory.” That theory provides that
“Plaintiffs who purchased defective cars were injured when they purchased for x dollars a New
GM car that contained a latent defect; had they known about the defect, they would have paid
fewer than x dollars for the car (or not bought the car at all), because a car with a safety defect is
worth less than a car without a safety defect.” TACC MTD Op., 2016 WL 3920353, at *7.
Notwithstanding the Court’s opinions, not to mention the fact that discovery is still
ongoing, New GM requested leave a few months ago to file a motion seeking summary judgment
with respect to Plaintiffs’ claims for benefit-of-the-bargain damages under the laws of the sixteen
jurisdictions subject to the prior motions to dismiss. (Docket No. 4338, at 1). Lead Counsel did
not oppose the request, but expressed some skepticism about the “basis” for a motion given the
Court’s rulings on New GM’s motions to dismiss. (Aug. 11, 2017 Status Conf. Tr. (“Tr.”) 14,
available at http://gmignitionmdl.com/court-documents/transcripts; see also Docket No. 4337, at
1 & n.1). At a status conference, the Court expressed some misgivings of its own about New
GM’s proposal. (See Tr. 9-10). Specifically, the Court cited its aversion to “piecemeal motion
practice” and raised the question of whether a summary judgment motion would be premature
given the Court’s prior rulings on the benefit-of-the-bargain theory and the fact that discovery
was not yet complete. (See id.). Ultimately, based on New GM’s view that a ruling on its
proposed motion “would materially advance the litigation and inform the Court’s later decisions
on motion practice regarding class certification and summary judgment,” (Docket No. 4338, at
1), the Court put aside those misgivings and granted New GM leave to proceed. (Tr. 14; see also
Docket No. 4499, ¶ 3). New GM’s motion is now fully briefed.
Upon review of the parties’ motion papers, the Court — regrettably — concludes that its
initial misgivings were well founded and that New GM’s motion is premature. The crux of New
GM’s argument is that Plaintiffs did, in fact, receive the benefit of their bargain because New
GM “recalled their vehicles, fixed (or offered to fix) each vehicle free of charge to each plaintiff,
and incurred . . . [costs] for the repairs.” (Docket No. 4681 (“New GM’s Br.”), at 1). Plaintiffs
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counter that all of the states at issue “calculate bargain-of-the-benefit [sic] damages as of the
time of the sale” and, therefore, that “damages calculations would not be affected by any
repairs.” (Docket No. 4805 (“Pls’ Br.”), at 1). In the alternative, Plaintiffs contend that there are
genuine disputes of material fact with respect to whether New GM’s recall repairs “actually fix
the defects at issue.” (Id. at 53). On that front, each side offers the opinions of experts.
(Compare, e.g., Docket No. 4682, ¶ 30, with Docket No. 4806, ¶ 38). Additionally, each side
contends that the other’s experts’ testimony may be inadmissible and signals the likelihood of
Daubert motions to come. (See Docket No. 4807, ¶ 30 (“No expert has been qualified or offered
to testify about these opinions, and the foundation required under Rule 702 has not been
established.”); Docket No. 4868, at 27 (arguing that Plaintiffs’ expert reports are “unsupported
and inadmissible” and “will be subject to Daubert briefing at the appropriate time”)).
The Court has not exhausted its research on the question of whether and to what extent
evidence of post-sale mitigation would affect the availability or calculation of damages in the
sixteen jurisdictions at issue. But it has done enough research to conclude that many, if not most
(or even all), states would factor such evidence into the analysis. Judge Chen’s decision in In re
Myford Touch Consumer Litigation, No. 13-CV-3072 (EMC), 2016 WL 7734558 (N.D. Cal.
Sept. 14, 2016), is instructive. In that case, Ford contested the plaintiffs’ motion to certify a class
of purchasers of Ford vehicles with a defective computer system. See id. Plaintiffs argued that,
under California law, damages need not “account for benefits received after purchase” — in that
case, repairs that Ford had made to the computer system. Id. at *18. Judge Chen disagreed,
concluding that “Plaintiffs are incorrect in arguing their damages cannot be reduced by postpurchase mitigation.” Id. at *19 (citing Clayworth v. Pfizer, Inc., 233 P.3d 1066, 1087 (Cal.
2010); Restatement (Second) of Contracts § 350). The Court then examined the plaintiffs’
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“evidence that Ford did not meaningfully fix the [computer system],” ultimately concluding that
whether the fix was successful was “a factual dispute, going to the merits of the case.” Id.; see
also Liles v. Pentecost, 105 So. 198, 198-99 (Ala. 1925) (holding that, while the “general rule as
to measure of damages in [fraudulent misrepresentation cases] is the difference between the
actual value of the property at the time of the sale . . . and its represented value,” that rule does
not apply where, “because of peculiar circumstances of the case involved, such difference fails to
measure accurately the loss sustained”).
In light of the foregoing, the Court surmises (though, to be clear, does not yet hold) that
the viability of Plaintiffs’ claims for benefit-of-the-bargain damages is likely to turn on the
question of whether New GM actually fixed the recalls at issue in its many recalls. That, in turn,
would require a determination of whether each side’s expert testimony is admissible — an issue
that the parties address barely, if at all, and as to which they plan to file motions in the future. It
is for those reasons that the Court concludes New GM’s motion is premature. That is, the Court
concludes that it would be more efficient and sensible to defer resolution of the issues raised in
New GM’s current motion until the Court has the opportunity, on a full record, to determine the
admissibility of each sides’ experts. See, e.g., Celebrity Cruises Inc. v. Essef Corp., No. 96-CV3135 (JCF), 2005 WL 3527142, at *5 (S.D.N.Y. Dec. 23, 2005) (“It will be far more efficient to
determine whether [the plaintiff] has sufficient evidence to support its damage claims after it has
been established what evidence is admissible. Therefore, [the defendant]’s motion is denied with
leave to renew following a decision on the Daubert motions.”); Allstate Ins. Co. v. Heil, No. 07CV-0097 (JMS), 2007 WL 4270355, at *2 n.2 (D. Haw. Dec. 6, 2007) (“Because the parties
have not briefed the Rule 702 issue in anything more than a cursory way as part of their
summary judgment arguments, the court declines to resolve the expert admissibility issues on the
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record before it.”). Accordingly, New GM’s motion for summary judgment as to Plaintiffs’
claims for benefit-of-the-bargain damages is DENIED without prejudice. 1 Counsel should
confer on whether and how the motion should be renewed and be prepared to address that
question at a future status conference.
The Clerk of Court is directed to terminate Docket No. 4679.
SO ORDERED.
Date: April 3, 2018
New York, New York
1
The Court recognizes, as New GM argues, that Plaintiffs do not dispute that New GM’s
recall “cured” the “Power Steering Defect.” (See Pls’ Br. 53-54). In the interest of avoiding
piecemeal resolution of New GM’s motion, the Court will also defer resolution of this argument
until it addresses Plaintiffs’ arguments concerning all of the recalls.
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