In re: General Motors LLC Ignition Switch Litigation

Filing 365

OPINION AND ORDER: In the final analysis, the Court's task here is not to decide what makes sense as a matter of policy. Cf. MyFord Touch, 291 F. Supp. 3d at 971 (citing "policy reasons to afford Plaintiffs a reasonable opportunity to posit damages based on a more flexible approach to economic theory"). Nor is it even to evaluate whether Boedeker's analysis passes muster as a matter of economic theory. Instead, it is to apply the substantive law of each Bellwether State. As discussed, that law requires that benefit-of-the-bargain damages be calculated based on the difference in market value between the product as warranted and the product as sold and defines market value as the product of both a consumer's willingness to pay and a merchants willingness to sell, when neither are under any compulsion to do so. Applying that law, the Court is compelled to conclude that Boedeker's analysis does not, without more, suffice to prove that any of the Bellwether State Plaintiffs suffered benefit-of-the-bargain damages based on a difference in value. Because there is no more that is, Plaintiffs point to no other evidence from which a factfinder could find damages based on a difference in value there is an "absence of evidence" on an "essential element" of Plaintiffs' claims for such damages. Goenaga, 51 F.3d at 18. Accordingly, the Court must grant New GMs motion for summary judgment on the named Plaintiffs' claims to the extent they seek damages measured as the difference in value between their cars as bargained-for and their cars as received. In their various motion papers, the parties have briefed many other issues, including but not limited to the viability of various claims and/or other damages theories (such as Plaintiffs' bankruptcy-fraud claims, their claims for "lost time" damages' the claims of Plaintiffs who purchased Old GM or used vehicles, the claims of Plaintiffs who disposed of their vehicles before the recalls, and the claims of Plaintiffs whose vehicles are subject to "service parts" vehicle recalls), the effectiveness of New GMs recalls and repairs, the availability of injunctive relief, class certification, and the admissibility of certain experts' testimony. In light of the ruling above, however, the Court will refrain from reaching such issues pending discussion between and with the parties and, possibly, new briefing. It does so because the ruling almost certainly moots some of the remaining issues and, with respect to the issues that are not mooted (for example, class certification), the ruling changes the landscape in dramatic ways that may call for new briefing. On top of that, and given that changed landscape, it may well make sense for the parties to revisit the issue of settlement. And, of course, Plaintiffs may petition for certification of an interlocutory appeal. In short, even though the parties have spilled considerable ink briefing other issues, the Court concludes, as a matter of efficient case management, that it makes more sense to stop where it has than to go on.The parties should immediately meet and confer with respect to the implications of this Opinion and Order and be prepared to address the next steps for both this litigation and the pending motion to withdraw the bankruptcy reference in 19-CV-1852 (JMF) or, at a minimum, a process for determining the next steps at the status conference on August 15, 2019.18 The Clerk of Court is directed to docket this Opinion and Order in 14-MD-2543, 14-MC-2543, and 19-CV-1852, and to terminate 14-MD-2543, ECF Nos. 5845, 5854, 5858, 6062, 6065, 6067, 6069,6108, 6110, 6114, 6116, and 6118. SO ORDERED. (Signed by Judge Jesse M. Furman on 8/6/2019) (jca)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE:
GENERAL MOTORS LLC IGNITION SWITCH LITIGATION
This Document Relates To All Actions

14-MD-2543 (JMF)
14-MC-2543 (JMF)
OPINION AND ORDER

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JESSE M. FURMAN, United States District Judge:
[Regarding New GM’s Motion for Summary Judgment as to the Bellwether
Economic Loss Plaintiffs’ Claims for Benefit-of-the-Bargain Damages]
In February 2014, General Motors LLC (“New GM”) announced the recall of certain
General Motors vehicles that had been manufactured with a defective ignition switch — a switch
that moved too easily from the “run” position to the “accessory” and “off” positions, causing
moving stalls and disabling critical safety systems. In the months that followed, New GM
recalled millions of other vehicles, some for reasons relating to the ignition switch and some for
other reasons. Not surprisingly, litigation followed, and was ultimately consolidated in this
Court by the Judicial Panel on Multidistrict Litigation. Thousands of plaintiffs filed personal
injury and wrongful death claims against New GM. And more relevant for present purposes,
hundreds of plaintiffs (“Plaintiffs”) brought claims on behalf of a broad putative class of GM car
owners and lessors whose vehicles were subject to those recalls, seeking to recover for
“economic losses.” Their operative complaint — the Fifth Amended Consolidated Complaint or
“5ACC” — runs nearly 1700 pages and 7500 paragraphs, and includes claims under state law
brought by named Plaintiffs in all fifty states and the District of Columbia. See ECF No. 4838.
Over the last few years, the Court has issued a handful of lengthy rulings on the viability
of Plaintiffs’ claims under federal law and the laws of various jurisdictions. See, e.g., In re Gen.

Motors LLC Ignition Switch Litig., 339 F. Supp. 3d 262 (S.D.N.Y. 2018); In re Gen. Motors LLC
Ignition Switch Litig., No. 14-MD-2543 (JMF), 2017 WL 3382071 (S.D.N.Y. Aug. 3, 2017); In
re Gen. Motors LLC Ignition Switch Litig. (“4ACC Op.”), 257 F. Supp. 3d 372, 392-94
(S.D.N.Y. 2017); In re Gen. Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), 2017
WL 6509256 (S.D.N.Y. Dec. 19, 2017); In re Gen. Motors LLC Ignition Switch Litig. (“3ACC
Op.”), No. 14-MD-2543 (JMF), 2016 WL 3920353 (S.D.N.Y. July 15, 2016). Following those
rulings, the parties and the Court selected three “bellwether” states — California, Missouri, and
Texas (collectively, the “Bellwether States”) — for summary judgment, class certification, and
Daubert motion practice. See ECF No. 4499 (“Order No. 131”), at 2; ECF No. 4521.
Thereafter, the parties filed a wide array of motions relating to Plaintiffs in these Bellwether
States. Plaintiffs filed a motion to certify classes in each Bellwether State pursuant to Rule 23 of
the Federal Rules of Civil Procedure, New GM filed a motion for summary judgment with
respect to the claims of each putative class, and each side filed various Daubert motions
challenging the testimony of certain experts for the other side. See, e.g., ECF No. 5846; ECF
No. 5859 (“New GM SJ Mem.”); ECF No. 6130 (“New GM Gans Daubert Mem.”); ECF No.
6131 (“New GM Boedeker Daubert Mem.”).
In this Opinion, the Court resolves portions of New GM’s motion for summary judgment.
In doing so, the Court addresses two related questions that have yet to be resolved in the context
of a mature factual record: the proper measure of damages under Plaintiffs’ “benefit-of-thebargain” damages theory and — although it does not ultimately affect the damages claims
adjudicated in this Opinion — whether and how evidence that New GM repaired Plaintiffs’
vehicles through its many recalls would be relevant to the calculation of such damages. The
Court reaches several significant conclusions. First, the Court holds that, in all three Bellwether

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States, Plaintiffs’ benefit-of-the-bargain damages are properly measured as the lesser of (1) the
cost of repair or (2) the difference in fair market value between the Plaintiffs’ cars as warranted
and those same cars as sold. Second, that means that evidence of New GM’s post-sale repairs is
relevant to the calculation of Plaintiffs’ damages and, indeed, could theoretically eliminate those
damages altogether. And third, whether or not Plaintiffs’ claims for “cost-of-repair” damages
could survive New GM’s motion, the Court is compelled to conclude that their claims for
“difference-in-value” damages cannot because Plaintiffs have failed to introduce any evidence of
the fair market value of the allegedly defective vehicles they actually purchased and, therefore,
have failed to create a triable issue of fact on an essential element of any such claim. 1
BACKGROUND
Broadly speaking, Plaintiffs have sought relief in this litigation for economic losses
pursuant to two theories of injury. One theory, the so-called “brand devaluation” theory,
“assume[d] that when a consumer purchases a car, the purchase comes not only with a promise
. . . that the car does not contain any safety defects, but also with the promise that the
manufacturer of the car has, and will maintain, a particular reputation for making safe and
reliable cars separate and apart from the car purchased by the consumer at issue.” 3ACC Op.,
2016 WL 3920353, at *7. On that theory, Plaintiffs “thought they were buying cars made by a
brand that had a reputation for producing safe and reliable cars, that brand turned out not to be
what consumers thought it was . . . , and when the revelations about defects and corporate culture
became public the brand was tarnished, resulting in lower resale values across the board for the

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Given the significance of the Court’s conclusions for this litigation, and for reasons
explained below, the Court elects to go no further and leaves unaddressed for now many of the
other issues that have been briefed by the parties. The Court will discuss next steps with respect
to those and other issues at the next status conference.

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brand’s product.” Id. (internal quotation marks omitted). Plaintiffs thus sought damages
measured according to the diminution in their cars’ “resale value and the [New GM] brand’s
continuing good name.” Id. (emphasis omitted). The Court rejected the “brand devaluation”
theory wholesale in deciding New GM’s motion to dismiss the Third Amended Consolidated
Complaint. Id. at *9-10.
The Plaintiffs’ second theory of injury is the by-now-familiar “benefit-of-the-bargain”
theory, which recognizes that “because a car with a safety defect is worth less than a car without
a safety defect,” a plaintiff who bargains for a defect-free car is injured when she receives a
defective one instead. Id. at *7. The Court has addressed that theory repeatedly throughout this
litigation. In ruling on New GM’s motion to dismiss the Third Amended Consolidated
Complaint, for example, the Court upheld the theory in the abstract — rejecting New GM’s
arguments “that the benefit-of-the-bargain defect theory fails across the board” and holding that
“the viability of the benefit-of-the-bargain defect theory must be analyzed with respect to each
Plaintiff’s claims under the relevant jurisdiction’s law.” Id. at *10. More specifically, the Court
has held that Plaintiffs’ claims predicated on the theory were sufficient to survive motions to
dismiss under the laws of several jurisdictions, including the Bellwether States. See 4ACC Op.,
257 F. Supp. 3d at 445-55 (Texas); 3ACC Op., 2016 WL 3920353, at *19-24 (California); id. at
*32-35 (Missouri). But Plaintiffs’ second theory has yet to be tested on a mature factual record.
In 2017, New GM moved for summary judgment on Plaintiffs’ economic-loss claims in sixteen
jurisdictions, including the Bellwether States, arguing that Plaintiffs received the benefit of their
bargain when New GM repaired any defects through a series of recalls. See ECF No. 4681. In
April 2018, the Court denied that motion without prejudice, deferring summary judgment
practice in each of the Bellwether States until after the close of expert discovery on the grounds

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that it was likely “evidence of post-sale mitigation would affect the availability or calculation of
damages in the sixteen jurisdictions [then] at issue” and that “the viability of Plaintiffs’ claims
for benefit-of-the-bargain damages [could] turn on the question of whether New GM actually
fixed the defects at issue in its many recalls.” In re Gen. Motors LLC Ignition Switch Litig., No.
14-MD-2543 (JMF), 2018 WL 1638096, at *2 (S.D.N.Y. Apr. 3, 2018).
With discovery now complete with respect to those claims, New GM renews its attempt
to win summary judgment, this time limited to the claims of named Plaintiffs — who seek relief
on behalf of themselves and on behalf of putative classes — under the laws of each Bellwether
State. See New GM SJ Mem. 1-8. Among New GM’s arguments is that, with discovery now
complete, Plaintiffs have failed to produce sufficient evidence that they suffered any benefit-ofthe-bargain damages in the first place. See id. at 19-24. In response, Plaintiffs rely on the expert
testimony of Stefan Boedeker, whose analysis now serves as the proposed factual underpinning
of their benefit-of-the-bargain theory. ECF No. 6059 (“Pls.’ SJ Opp’n”), at 34-36. Boedeker
performed what is known as a “conjoint analysis” — essentially a survey of consumer
preferences for certain automotive features at certain price points. See id. at 35; see also ECF
No. 5848 (“Berman Class Cert. Decl.”), Ex. 214 (“Boedeker Report”), ¶¶ 23-26. 2 Boedeker
proposes to measure the compensable difference in value between what Plaintiffs bargained for

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Plaintiffs filed the Boedeker Report under seal as Exhibit 214 to the Declaration of Steve
W. Berman in Support of Economic Loss Plaintiffs’ Motion to Certify Bellwether Classes in
California, Missouri, and Texas. See Berman Class Cert. Decl. 21. Although Plaintiffs did not
submit the Report as an exhibit in connection with New GM’s summary judgment motion, they
rely on it throughout their summary judgment papers, including in their Local Rule 56.1
Statement and in their response to New GM’s 56.1 Statement, see ECF No. 6195 (“New GM
56.1 Reply”), ¶¶ 367-69, 371; ECF No. 6196 (“New GM 56.1 Resp.”) ¶¶ 273, 285, 291. Thus,
there is no question that the Court may (indeed, arguably must) consider it in connection with
New GM’s motion for summary judgment. See Fed. R. Civ. P. 56(c)(3) (“The court need
consider only the cited materials, but it may consider other materials in the record.”).

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and what they received with data that purport to show the difference between what Plaintiffs paid
for their cars and what they would have been willing to pay had they known about the
undisclosed defects. Boedeker Report ¶ 30. In this Opinion, the Court explains why such data
are not enough, on their own, to demonstrate benefit-of-the-bargain damages under the laws of
any of the Bellwether States, and why, as a result, New GM is entitled to summary judgment on
these named Plaintiffs’ claims.
LEGAL STANDARDS
A. Summary Judgment
Summary judgment is appropriate where the admissible evidence and pleadings
demonstrate “no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.” Fed. R. Civ. P. 56(a); see also Johnson v. Killian, 680 F.3d 234, 236 (2d Cir.
2012) (per curiam). A dispute over an issue of material fact qualifies as genuine if the “evidence
is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); accord Roe v. City of Waterbury, 542 F.3d 31, 35
(2d Cir. 2008). The moving party bears the initial burden of demonstrating the absence of a
genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). “In
moving for summary judgment against a party who will bear the ultimate burden of proof at trial,
the movant’s burden will be satisfied if he can point to an absence of evidence to support an
essential element of the nonmoving party’s claim.” Goenaga v. March of Dimes Birth Defects
Found., 51 F.3d 14, 18 (2d Cir. 1995) (citing Celotex, 477 U.S. at 322-23); accord PepsiCo, Inc.
v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002). By contrast, to defeat a motion for
summary judgment, the non-moving party must advance more than a “scintilla of evidence,”
Anderson, 477 U.S. at 252, and demonstrate more than “some metaphysical doubt as to the

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material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In
the final analysis, Rule 56 “mandates the entry of summary judgment, after adequate time for
discovery and upon motion, against a party who fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that party will bear the
burden of proof at trial.” Celotex, 477 U.S. at 322.
B. Applying State Law in Diversity Actions
There is no dispute that, in assessing the Bellwether States’ Plaintiffs’ claims, “[t]he
Court is bound to apply [each state’s] law to Plaintiffs’ state-law claims.” 3ACC Op., 2016 WL
3920353, at *10. As the Court has observed before, see In re Gen. Motors LLC Ignition Switch
Litig., 339 F. Supp. 3d at 275, in applying the law of a given state, the pronouncement of the
state’s highest court “is to be accepted by federal courts as defining state law.” West v. Am. Tel.
& Tel. Co., 311 U.S. 223, 236 (1940); accord Animal Sci. Prods., Inc. v. Hebei Welcome Pharm.
Co., 138 S. Ct. 1865, 1874 (2018) (“If the relevant state law is established by a decision of the
State’s highest court, that decision is binding on the federal courts.” (internal quotation marks
omitted)). “Where the high court has not spoken, the best indicators of how it would decide are
often the decisions of lower state courts.” In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d
831, 850 (2d Cir. 1992) (citing Comm’r of Internal Revenue v. Estate of Bosch, 387 U.S. 456,
465 (1967)). To be sure, a federal court is not bound by the opinions of a state’s lower courts.
See, e.g., Calvin Klein Ltd. v. Trylon Trucking Corp., 892 F.2d 191, 195 (2d Cir. 1989); see also
Estate of Bosch, 387 U.S. at 465 (“[I]n diversity cases . . . while the decrees of lower state courts
should be attributed some weight[,] the decision is not controlling where the highest court of the
State has not spoken on the point.” (internal quotation marks and alterations omitted)). But the
decision of an “intermediate appellate state court” is “datum for ascertaining state law which is

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not to be disregarded by a federal court unless it is convinced by other persuasive data that the
highest court of the state would decide otherwise.” West, 311 U.S. at 237. When faced with an
unsettled question of state statutory interpretation, a federal court should consider “the statutory
language, pertinent legislative history, the statutory scheme set in historical context, how the
statute can be woven into the state law with the least distortion of the total fabric, state decisional
law, and federal cases which construe the state statute.” Bensmiller v. E.I. Dupont de Nemours
& Co., 47 F.3d 79, 82 (2d Cir. 1995) (internal quotation marks and alterations omitted).
DISCUSSION
New GM seeks summary judgment on various grounds, including Plaintiffs’ failure to
produce evidence of damages. In reviewing New GM’s arguments, the Court begins, as it must,
with the substantive law that governs Plaintiffs’ damages theories in each of the Bellwether
States. As the Court will explain, each Bellwether State measures benefit-of-the-bargain
damages in cases like this one as the lesser of the cost to repair the defective vehicle or the
difference in market value between the vehicle as bargained for and the vehicle as it was actually
sold. Further, each Bellwether State defines market value in terms of supply and demand, or, put
another way, in terms of buyers’ willingness to pay (the “demand side”) and sellers’ willingness
to sell (the “supply side”). The Court then turns to New GM’s argument that, in light of that
substantive law, Plaintiffs have failed to introduce sufficient evidence on an essential element of
their claim for any benefit-of-the-bargain damages, at least as measured according to the
difference in value between Plaintiffs’ cars as bargained for and as actually sold.
A. The Benefit-of-the-Bargain Damages Theory
As its name suggests, the benefit-of-the-bargain theory seeks to compensate a plaintiff
who did not get what she bargained for. Thus, as this Court has recognized — albeit in

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discussing the viability of Plaintiffs’ now-dismissed civil RICO claims — the benefit-of-thebargain theory is merely a species of expectation damages. See 3ACC Op., 2016 WL 3920353,
at *16-17; see generally Restatement (Second) of Contracts § 344 (1981) (noting that a
promisee’s “‘expectation interest’ . . . is his interest in having the benefit of his bargain by being
put in as good a position as he would have been in had the contract been performed”). Far from
an exotic theory of damages, therefore, the benefit-of-the-bargain theory is “traditionally the core
concern of contract law.” E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 870
(1986). “Contract damages,” after all, “are ordinarily based on the injured party’s expectation
interest and are intended to give him the benefit of his bargain by awarding him a sum of money
that will, to the extent possible, put him in as good a position as he would have been in had the
contract been performed.” Restatement (Second) of Contracts § 347 cmt. a; see also id. § 344. 3
As illustrated by this case — and others involving allegedly tortious misrepresentations
— the benefit-of-the-bargain theory is not limited to the contract realm. Although some of
Plaintiffs’ claims sound in contract, others sound in tort or restitution, and as to them, too,
Plaintiffs seek “the difference between the actual value of the car and the value the car would
have had if the representation had been true.” ECF No. 6059 (“Pls.’ SJ Opp’n”), at 30 (quoting

3

As the Court will discuss in more detail below, this general principle holds true in each of
the Bellwether States. See, e.g., Herron v. Best Buy Stores, LP, No. 2:12-CV-2103 (TLN), 2018
WL 1960659, at *5 (E.D. Cal. Apr. 26, 2018) (describing “benefit of the bargain” damages as
“expectation” damages and citing Restatement (Second) of Contracts § 347 cmt. a), appeal filed,
No. 18-16343 (9th Cir. July 20, 2018); Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882,
888-89 (Tex. App. 2004) (“The most common interest protected in breach of contract cases is the
expectation, or benefit of the bargain, interest. Protecting this interest seeks to restore the nonbreaching party to the same economic position in which it would have been had the contract not
been breached — thus giving the party the benefit of its bargain.”); Birdsong v. Bydalek, 953
S.W.2d 103, 116 (Mo. Ct. App. 1997) (“An award of damages in a breach of contract case
generally serves the goal of placing the non-breaching party in as good a position as he or she
would have been if the contract had been performed.”).

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Auffenberg v. Hafley, 457 S.W.2d 929, 937 (Mo. Ct. App. 1970)). Thus — as Plaintiffs agree —
where the benefit-of-the-bargain theory applies in a tort case, it compensates an injured plaintiff
in the same way and according to the same theory as in a contract case: benefit-of-the-bargain
damages “mean[] recovery of what the fraudster promised, as opposed to the property the victim
lost,” In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 122 (2d Cir. 2013) (emphasis
added), and measure the value of what was promised according to the “value the car would have
had if the representation had been true,” Pls.’ SJ Opp’n 30.
The Court has analyzed the benefit-of-the-bargain theory in broad strokes several times
before now. See, e.g., In re Gen. Motors LLC Ignition Switch Litig., 2018 WL 1638096, at *1-2;
3ACC Op., 2016 WL 3920353, at *10; see also In re Gen. Motors LLC Ignition Switch Litig.,
339 F. Supp. 3d 262 (discussing the theory’s viability in other jurisdictions). As the Court has
explained, the benefit-of-the-bargain theory “measures the difference in value between the
defective car the consumer received and the defect-free car the consumer thought she was getting
(and for which she paid).” 3ACC Op., 2016 WL 3920353, at *30. 4 But the Court has not yet
expressed a view on how benefit-of-the-bargain damages should be measured except to say that
they are to be measured at the time of sale. See, e.g., 4ACC Op., 257 F. Supp. 3d at 401; 3ACC

4

The Court described the “[t]he gravamen of the benefit-of-the-bargain defect theory” as
follows: “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.” 3ACC Op., 2016 WL 3920353, at *7. As
this Opinion will make clear, that is an imprecise statement of the Bellwether States’ laws to the
extent it could be read to suggest that what Plaintiffs “would have paid” means only what
Plaintiffs “would have been willing to pay” — or to the extent that it could be read to suggest
that what any car is “worth” is a function only of a plaintiff’s willingness to pay for it. Instead,
as the Court will explain, each Bellwether State holds that a bargained-for product is “worth” its
market value, meaning that the hypothetical plaintiff bargaining for the hypothetical defective
car “would have paid” less for it only because its market value would have been less, too.

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Op., 2016 WL 3920353, at *10. Moreover, the Court has explicitly left open “the question of
whether and to what extent evidence of post-sale mitigation” — that is, the effectiveness of New
GM’s recalls (or lack thereof) — “would affect the availability or calculation of [benefit-of-thebargain] damages” in the Bellwether States and other jurisdictions. In re Gen. Motors LLC
Ignition Switch Litig., 2018 WL 1638096, at *2. 5 Both issues — how to calculate benefit-of-thebargain damages and the relevance, if any, of post-sale mitigation — are matters of substantive
state law. To answer them for purposes of this Opinion and Order, therefore, the Court must
delve into the substantive law of California, Missouri, and Texas. As the following discussion
makes clear, such analysis yields two principal conclusions: first, that the proper measure of
benefit-of-the-bargain damages in each state is the difference in market value between Plaintiffs’
cars as warranted and as sold; and, second, that a plaintiff’s duty to avoid or mitigate damages
means that post-sale repairs are relevant to the calculation of benefit-of-the-bargain damages,
even though such damages are initially calculated according to the bargain that was struck at the
time of sale.
1. California
The Court begins with California. Under California law, Plaintiffs seek monetary awards
for five causes of action: pursuant to California’s Unfair Competition Law (“UCL”), Cal. Bus. &

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Plaintiffs contend that the Court has already suggested, and even “expressly held” that
post-sale mitigation evidence is irrelevant to the calculation of benefit-of-the-bargain damages,
citing — for example — the Court’s prior statement that New GM’s “recalls, even those
sufficient to remedy the defects, do not compensate Plaintiffs fully for the damages sought here.”
Pls.’ SJ Opp’n 23 (citing 3ACC Op., 2016 WL 3920353, at * 40). But that stray remark was
made in the context of a discussion of mootness, and — as the Court’s April 3, 2018 Opinion
makes clear — cannot reasonably be read to rule on the question addressed here. See In re Gen.
Motors LLC Ignition Switch Litig., 2018 WL 1638096, at *2. Similarly, although the Court has
held that benefit-of-the-bargain damages must be measured at the “time of sale” — i.e., when the
bargain in question was struck — it does not follow that subsequent events cannot mitigate or
otherwise reduce a plaintiff’s entitlement to such damages.

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Prof. Code § 17200 et seq., Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et
seq., Song-Beverly Consumer Warranty Act (“SBA”), Cal. Civ. Code §§ 1791.1, 1792, and for
common-law fraudulent concealment and unjust enrichment. 6 Together, these causes of action
provide two basic theories of recovery: actual damages and restitution. The CLRA and SBA
authorize both forms of recovery, see Cal. Civ. Code §§ 1780(a), 1793.2(d), while the UCL,
fraud, and unjust enrichment claims are limited to restitutionary remedies, see Colgan v.
Leatherman Tool Grp., Inc., 38 Cal. Rptr. 3d 36, 59 (Cal. Ct. App. 2006) (UCL); 3ACC Op.,
2016 WL 3920353, at *23 (unjust enrichment); id. at *22 (fraudulent concealment); see also Cal.
Civ. Code § 3343(a) (providing that “[o]ne defrauded in the purchase . . . of property is entitled
to recover the difference between the actual value of that with which the defrauded person parted
and the actual value of that which he received, together with” certain types of consequential and
reliance damages not claimed here). Meanwhile, the SBA contemplates benefit-of-the-bargain
damages for breaches of the implied warranty of merchantability. See Cal. Com. Code § 2714(2)
(“The measure of damages for breach of warranty is the difference at the time and place of
acceptance between the value of the goods accepted and the value they would have had if they
had been as warranted, unless special circumstances show proximate damages of a different
amount.”); Ironshore Specialty Ins. Co. v. 23andMe, Inc., No. 14-CV-03286 (BLF), 2015 WL
2265900, at *4 (N.D. Cal. May 14, 2015). Broadly speaking, the California causes of action here
either “compensate [plaintiffs] for actual loss” (through damages) or seek to return property that

6

The 5ACC also pleads a claim for negligent failure to recall under California law, but —
given that the Court already granted New GM’s motion to dismiss that claim, see 3ACC Op.,
2016 WL 3920353, at *24 — it does so “solely for the purposes of preserving the claim for
appellate purposes.” 5ACC ¶¶ 1663-70 n.419.

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the defendant unlawfully acquired from the plaintiff and, at least under certain circumstances, to
deter future violations (through restitution). Colgan, 38 Cal Rptr. 3d at 59.
Where benefit-of-the-bargain damages are available under California law, they
compensate for “the difference between the actual value of what plaintiff has received and that
which he expected to receive.” Overgaard v. Johnson, 137 Cal. Rptr. 412, 413 (Cal. Ct. App.
1977). By contrast, where California law limits recovery to “out of pocket” losses, as it does
with fraud claims generally, such damages are measured according to “the difference between
the actual value received and the actual value conveyed.” Id. If a defrauded plaintiff has
conveyed value in excess of what she received in the transaction, out-of-pocket (or
restitutionary) damages will seek to “restore the status quo by returning to the plaintiff funds in
which he or she has an ownership interest.” Korea Supply Co. v. Lockheed Martin Corp., 63
P.3d 937, 947 (Cal. 2003). Thus, for purposes of this motion in this litigation, the “out-ofpocket” and “benefit-of-the-bargain” measures of damages overlap; in both cases, calculating a
monetary award depends in part on calculating the “actual value” of the allegedly defective car a
Plaintiff received.
That, in turn, means that each of Plaintiffs’ California claims depends on calculating the
market value of the allegedly defective cars that Plaintiffs purchased. As the California Supreme
Court (that is, California’s highest court) has observed, “‘value,’ in connection with legal
problems, ordinarily means market value.” Bagdasarian v. Gragnon, 192 P.2d 935, 940 (Cal.
1948). 7 Accordingly, in awarding both benefit-of-the-bargain and out-of-pocket (or

7

That observation is consistent with the federal law of benefit-of-the-bargain damages.
See, e.g., United States v. United Techs. Corp., 782 F.3d 718, 731 (6th Cir. 2015) (“The only
benchmark consistent with [the] benefit-of-the-bargain theory of damages is ‘fair market value,’”
which means “what a willing buyer would pay in cash to a willing seller at the time.” (quoting
United States v. 564.54 Acres of Land, 441 U.S. 506, 511 (1979))); see also Gillespie v. United
13

restitutionary) damages, courts applying California law look to the fair market value of the goods
and services at issue: both the goods as bargained for (or as represented), and the goods as
actually sold. See, e.g., Zakaria v. Gerber Prods. Co., No. LA-CV-15-200 (JAK), 2017 WL
9512587, at *20 (C.D. Cal. Aug. 9, 2017) (holding that actual damages under the CLRA depends
on actual market values), aff’d, 755 Fed. App’x 623 (9th Cir. 2018); Werdebaugh v. Blue
Diamond Growers, No. 12-CV-02724 (LHK), 2014 WL 7148923, at *8 (N.D. Cal. Dec. 15,
2014) (holding that restitutionary awards under the UCL and CLRA are “determined by taking
the difference between the market price actually paid by consumers and the true market price
that reflects the impact of the unlawful, unfair, or fraudulent business practices”); Lanovaz v.
Twinings N. Am., Inc., No. C-12-02646 (RMW), 2014 WL 1652338, at *6 (N.D. Cal. Apr. 24,
2014) (same); Guido v. L’Oreal, USA, Inc., No. CV-11-1067 (CAS), 2013 WL 3353857, at *14
(C.D. Cal. July 1, 2013) (holding that damages for breach of an implied warranty under the SBA
restore “the monetary equivalent of the benefit of [the plaintiff’s] bargain” by reference to the
“true market value” of what a plaintiff “actually received”).
In reaching this conclusion, the Court is mindful of the Ninth Circuit’s contrary
conclusion that “UCL . . . restitution is based on what a purchaser would have paid at the time of
purchase had the purchaser received all the information.” Pulaski & Middleman, LLC v. Google,
Inc., 802 F.3d 979, 989 (9th Cir. 2015). Pulaski, however, appears to overread the California
Supreme Court case on which it relies. In Kwikset Corp. v. Superior Ct. of Orange Cty., 246

States, 23 F.3d 36, 40 (2d Cir. 1994) (“Fair market value is commonly defined as ‘the price at
which the property would change hands between a willing buyer and a willing seller.’” (citing
United States v. Cartwright, 411 U.S. 546, 551 (1973)); Black’s Law Dictionary (11th ed. 2019)
(defining “fair market value” as “[t]he price that a seller is willing to accept and a buyer is
willing to pay on the open market and in an arm’s-length transaction; the point at which supply
and demand intersect”).

14

P.3d 877 (Cal. 2011), the California Supreme Court held only that a plaintiff satisfies the UCL’s
standing requirement “by alleging[] . . . that he or she would not have bought the product but for
the misrepresentation” at issue, id. at 890. Such an allegation permits the reasonable inference
that “because of the misrepresentation the consumer (allegedly) was made to part with more
money than he or she otherwise would have been willing to expend, i.e., that the consumer paid
more than he or she actually valued the product,” regardless of any evidence of the actual market
value of the product. Id. The Kwikset court could not have been clearer, however, that its
holding concerned only standing to sue under the UCL, not the appropriate measure of a
monetary award of restitution under the UCL. See id. at 894 (“[T]he standards for establishing
standing under section 17204 and eligibility for restitution under section 17203 are wholly
distinct.”); id. at 895 (distinguishing between a plaintiff’s ability to “demonstrate . . .
compensable losses or entitlement to restitution” and its ability to allege standing). Kwikset thus
stands for the unexceptional proposition that a plaintiff who alleges a subjective loss has standing
to seek the UCL’s non-monetary remedies, even if that same plaintiff may not be able to prove
entitlement to a monetary award. See id. at 890-91. As for what is required to prove such an
entitlement on the merits, the Court sides with the weight of post-Kwikset (and post-Pulaski)
authority holding that a plaintiff must have “substantial evidence” of “measurable amounts” of
an objective loss, measured according to the difference in market value of the property lost and
the property received. Zakaria, 2017 WL 9512587, at *20-21, aff’d, 755 Fed. App’x 623 (9th
Cir. 2018) (emphasis omitted); see also Colgan, 38 Cal. Rptr. 3d at 63 (“Although a trial court
has broad discretion under [the UCL] to grant equitable relief, that discretion is not ‘unlimited’
and does not extend beyond the boundaries of the parties’ evidentiary showing.” (citation
omitted)).

15

California law also recognizes the relevance of post-sale mitigation — such as New
GM’s recall repairs — to the calculation of a monetary award under any of Plaintiffs’ theories.
“The doctrine of mitigation of damages holds that a plaintiff who suffers damage as a result of
either a breach of contract or a tort has a duty to take reasonable steps to mitigate those damages
and will not be able to recover for any losses which could have been thus avoided.” Valle de
Oro Bank N.A. v. Gamboa, 32 Cal. Rptr. 2d 329, 331 (Cal. Ct. App. 1994) (alteration and
internal quotation marks omitted); see Restatement (Second) of Contracts § 350 (1981)
(“[D]amages are not recoverable for loss that the injured party could have avoided without undue
risk, burden or humiliation.”); accord 6 Witkin Summary of Cal. Law – Torts § 1803 (11th ed.
2017). Thus, a “defendant’s mitigation of an injury may leave the plaintiff ‘unable to prove a
right to . . . restitution” or damages. In re Myford Touch Consumer Litig., No. 13-CV-03072
(EMC), 2016 WL 7734558, at *19 (N.D. Cal. Sept. 14, 2016) (quoting Clayworth v. Pfizer, Inc.,
233 P.3d 1066, 1087 (Cal. 2010), and citing Restatement (Second) of Contracts § 350),
reconsideration granted on other grounds, 2016 WL 6873453 (N.D. Cal. Nov. 22, 2016). For
similar reasons, California courts have also followed the traditional rule that the measure of
damages for tortious injury to personal property — such as an automobile — is the lesser of the
diminution in value or the reasonable cost of repairs. See, e.g., Hand Elecs., Inc. v. Snowline
Joint Unified Sch. Dist., 26 Cal. Rptr. 2d 446, 450-51 (Cal. Ct. App. 1994); Safeco Ins. Co. v. J
& D Painting, 21 Cal. Rptr. 2d 903, 904 (Cal. Ct. App. 1993); see also, e.g., Olds & Stoller v.
Seifert, 254 P. 289, 290 (Cal. Ct. App. 1927); Menefee v. Raisch Improvement Co., 248 P. 1031,
1032 (Cal. Ct. App. 1926).
Recent cases applying California law have held that the cost of repair is an appropriate
measure of damages in product-defect cases, in particular “because it sets damages equal to the

16

amount necessary to make a defective part serviceable,” thereby excluding any “windfall” in
excess of that amount. Salas v. Toyota Motor Sales, U.S.A., Inc., No. CV-15-8629 (FMO), 2019
WL 1940619, at *12 (C.D. Cal. Mar. 27, 2019) (internal quotation marks omitted); see In re
Toyota Motor Corp. Hybrid Brake Mktg., Sales Practices & Prods. Liab. Litig., 288 F.R.D. 445,
449-50 (C.D. Cal. 2013) (holding the plaintiffs’ “benefit-of-the-bargain argument . . . insufficient
as a matter of law” because once software updates were installed addressing the defective antilock braking system in their vehicles, the plaintiffs had “received exactly what they paid for —
that is, a vehicle with a safe and operable ABS”), aff’d sub nom. Kramer v. Toyota Motor Corp.,
668 Fed. App’x 765 (9th Cir. 2016); see also Nguyen v. Nissan N. Am., Inc., — F.3d —, No. 1816344, 2019 WL 3368918, at *7 (9th Cir. July 26, 2019) (approving, at the class certification
stage, “the nexus between [the plaintiff’s] legal theory — that Nissan violated California law by
selling vehicles with a defective clutch system that was not reflected in the sale price — and [the
plaintiff’s] damages model — the average cost of repair”). In light of the principles of California
law discussed above, not to mention logic, the Court finds these cases persuasive. Thus, the
Court concludes that, although the particular circumstances of a given case may affect the theory
and content of an award, the core measure of benefit-of-the-bargain damages in an automotive
defect case (whether predicated on California implied-warranty, CLRA, UCL, or common-law
claims), is the cost to repair the defect, thereby restoring to plaintiffs the defect-free car for
which they bargained. See Falco v. Nissan N. Am. Inc., No. CV-13-00686 (DDP), 2016 WL
1327474, at *12 (C. D. Cal. Apr. 5, 2016) (“By receiving restitution in the amount of average
repairs, the class would be getting the benefit of their bargain because they would be put in the
same position they would have been had the car not been sold with the defective timing chain
system — it is the cost necessary to make the vehicles conform to the value Plaintiffs thought

17

they were getting in the price tendered.”). By the same token, where a defendant has already
repaired the defect, that fact may reduce plaintiff’s benefit-of-the-bargain damages to zero. See
Waller v. Hewlett-Packard Co., 295 F.R.D. 472, 488 (S.D. Cal. 2013) (holding that allegedly
defrauded UCL plaintiffs received the benefit-of-their-bargain when the defendant updated the
software at issue to make it function as warranted because, “[w]ith the upgrade, [the plaintiffs]
now have just what they paid for”); In re Toyota Motor Corp., 288 F.R.D. at 450. Thus, not only
is New GM’s evidence of post-sale mitigation plainly relevant to Plaintiffs’ entitlement to
damages under California-law, but it may well also erase those damages entirely.
2. Missouri
The Court turns, then, to Missouri. The Court has previously held — although it
described the issue as “a close one” — that “Missouri law recognizes the benefit-of-the-bargain
defect theory” for claims sounding in contract and tort. 3ACC Op., 2016 WL 3920353, at *34.
As for the proper measure of such damages, which the Court has not yet had occasion to address,
Missouri law recognizes the traditional rule that contract damages should place an injured party,
“as far as it is possible to do so by a monetary award, . . . in the position he would have been in
had the contract been performed.” Boten v. Brecklein, 452 S.W.2d 86, 93 (Mo. 1970) (internal
quotation marks omitted); see id. (noting that the injured party “is entitled to the benefit of his
bargain, that is, whatever net gain he would have made under the contract” (internal quotation
marks omitted)); see Mo. Ann. Stat. § 400.2-714 (“The measure of damages for breach of
warranty is the difference at the time and place of acceptance between the value of the goods
accepted and the value they would have had if they had been as warranted, unless special
circumstances show proximate damages of a different amount.”). At the same time, such
damages should not “place [a] plaintiff in a better position than he would have been had the

18

contract been completed on both sides.” Brecklein, 452 S.W.2d at 93 (emphasis added) (quoting
Dingman v. Elizabeth Arden Sales Corp., 284 S.W.2d 16, 18 (Mo. Ct. App. 1955)). Along
similar lines, the Missouri Plaintiffs’ sole remaining statutory claim, arising under the Missouri
Merchandising Practices Act (“MMPA”), Mo. Rev. Stat. § 407.010 et seq., requires proof of an
“ascertainable loss,” measured according to “the benefit-of-the-bargain rule, which compares the
actual value of the item to the value of the item if it had been as represented at the time of the
transaction.” Plubell v. Merck & Co., 289 S.W.3d 707, 715 (Mo. Ct. App. 2009). 8
As in the other two Bellwether States, when Missouri law is concerned with “value” as a
measure of damages, value refers to market value. See Larabee v. Eichler, 271 S.W.3d 542, 548
(Mo. 2008) (en banc) (“[The] ‘benefit of the bargain’ rule[] . . . states the appropriate measure
for damages in a fraudulent misrepresentation case is the difference between the fair market
value of the property received and the value if the property had been as represented.”). Indeed, a
long line of Missouri cases equate “actual value” with “market value.” See, e.g., Metro. St. Ry.
Co. v. Walsh, 94 S.W. 860, 868 (Mo. 1906) (“[T]he market value of the property means its actual
value, . . . that is, the fair value of the property as between one who wants to purchase and one
who wants to sell it; not what could be obtained for it in peculiar circumstances when greater
than its fair price could be obtained; nor its speculative value; nor the value obtained through the
necessities of another. . . . The question is if the defendant wanted to sell its property, what
could be obtained for it upon the market from parties who wanted to buy and would give its full
value.” (internal quotation marks omitted)). Testimony regarding the subjective, or private,

8

In spite of the Court’s prior holding that such a claim requires actual manifestation of the
defect in question, 3ACC Op., 2016 WL 3920353, at *35, the 5ACC also pleads a breach of the
implied warranty of merchantability under Mo. Rev. Stat. § 400.2-314 on behalf of Plaintiffs
“whose vehicles have not suffered from an actual manifestation solely for the purpose of
preserving the claims for appellate review.” 5ACC ¶¶ 4316-25 n.435.

19

value of property to its owner does not suffice. See, e.g, St. Louis, Keokuk & Nw. R.R. Co. v. St.
Louis Union Stock-Yard Co., 25 S.W. 399, 400 (Mo. 1894) (distinguishing between the “opinion
of [a] witness as to the value of the property to the owner, and [the property’s] market value,”
where “[i]t was the market value that was the question of inquiry and consideration”); Evinger v.
McDaniel Title Co., 726 S.W.2d 468, 474-75 (Mo. Ct. App. 1987) (“Proof of fair market value
cannot be supplied by evidence as to the value of the property to the plaintiff individually, as a
witness’[s] subjective opinion or his feeling or guess as to the value of property may not be
equated with or substituted for fair market value.”).
Additionally, upon reviewing the relevant authorities, the Court concludes that Missouri
law also treats evidence of New GM’s post-sale repairs as relevant to the calculation of
Plaintiffs’ damages. “Generally,” under Missouri law, “the measure of damages for tortious
injury to property is its diminished value — the difference between the fair market value of the
property immediately before and immediately after the injury. But when there is evidence that
the amount of damage is insignificant, as compared to the value of the property as a whole, and
involves only a small part of the property, the ‘cost of repair’ measure is proper . . . .” Kaplan v.
U.S. Bank, N.A., 166 S.W.3d 60, 71-72 (Mo. Ct. App. 2003); see also Crawford v. Whittaker
Constr., Inc., 772 S.W.2d 819, 822 (Mo. Ct. App. 1989) (noting, in a case involving a contract
for construction of a house, that “the general rule that the proper measure of damages in this
situation is whichever is lower, as between the cost of repair and the diminution of value
(diminution meaning the difference in value of the house if it had been constructed properly
compared with its actual value as constructed.) The rationale underlying this rule is that
plaintiffs are entitled to recover as damages only a sum which is equivalent to performance of the
bargain — to be placed in the position they would have been in if the contract had been fulfilled

20

in a workmanlike manner.” (internal quotation marks omitted)). Missouri courts also recognize
that, in cases of “slight injury” to property, “the cost of repair logically reflects the amount the
property was reduced in value.” Kaplan, 166 S.W.3d at 72 (emphasis and internal quotation
marks omitted). And, generally, the “cost of repairs” is “competent evidence to be considered in
determining the damage suffered,” Tull v. Hous. Auth. of Columbia, 691 S.W.2d 940, 943 (Mo.
Ct. App. 1985); see also Conner v. Aalco Moving & Storage Co., 218 S.W.2d 830, 832 (Mo. Ct.
App. 1949), and may be the basis for a damages award where there is no evidence of fair market
value, see Tull, 691 S.W.2d at 942. “While diminished value is the preferred measure of
damages in tort cases because it restores plaintiffs to the positions they were in had the tort not
been committed, the particular facts of each case determine which measure is appropriate.”
Kaplan, 166 S.W.3d at 72; see also Clayton Ctr. Assocs. v. Schindler Haughton Elevator Corp.,
731 F.2d 536, 540 (8th Cir. 1984) (noting that where Missouri law’s “goal in awarding damages
is to give the injured party the benefit of its bargain, . . . . [t]wo alternative measures of damages
are used to achieve this goal” in repair contract cases: either “the cost of repair or completion of
the contract work, or the diminution in value . . . caused by the breach . . . . [T]he particular facts
of each case seem to govern which measure of damages is appropriate.”).
Indeed, in cases with facts similar to this one, Missouri courts uniformly treat the costs of
repair as relevant to damages even where damages are based on the difference in value before
and after the harm. See, e.g., Wright v. Edison, 619 S.W.2d 797, 801 (Mo. Ct. App. 1981)
(“Where repairs to personal property such as an automobile result in causing it to be more
valuable than it was before the injury, such excess must be deducted from the cost of repairs. On
the other hand[,] if the item after repairs are made is still not as valuable as it was before the
injury, then the owner may recover in addition to the cost of repairs such amount as will equal

21

the difference between the value of the item of personal property before the injury and after the
repairs were made upon it.” (citation omitted)); accord Hayes v. Dalton, 257 S.W.2d 198, 201
(Mo. Ct. App. 1953); Conner, 218 S.W.2d at 832 (Mo. App. 1949); see also Cline v. City of St.
Joseph, 245 S.W.2d 695, 702 (Mo. Ct. App. 1952) (“As a general rule there can be no recovery
for losses which might have been prevented by reasonable efforts on the part of the person
injured. A failure to attempt to mitigate damages will not bar plaintiff entirely from a recovery,
but will only prevent the recovery of such damages as might have been avoided by reasonable
efforts upon his part.”). By the same logic, if the cost of repair would restore the vehicle to
exactly its pre-accident value, it would follow that the cost of repair should provide the primary
— if not exclusive — measure of damages.
Sure enough, in recent years, Missouri courts have tacked towards the view that while
“the measure of damage to an automobile is [generally] the decrease in its fair market value after
the accident, . . . if [the automobile] can be repaired to its prior state, the cost of repair is a
measure of damages.” Shapiro v. Kravitz, 754 S.W.2d 44, 45 (Mo. Ct. App. 1988) (citations
omitted). Thus, Missouri’s intermediate appellate court has held that “[c]ompensatory damages
in a fraud action where the defrauded party retains the property are limited to the benefit of the
bargain from the sales transaction,” meaning that where “awarding the cost of repair would . . .
give [the plaintiff] the benefit of her bargain,” it is “unnecessary to award damages measured by
the diminution in value of her property.” Brown v. Bennett, 136 S.W.3d 552, 557 (Mo. Ct. App.
2004). Similarly, in Farning v. Brendal, 150 S.W.3d 384, 386 (Mo. Ct. App. 2004), a breach of
warranty case, the Missouri Court of Appeals held that “the cost of repair was less than the
diminution in value and was, therefore, the correct measure of damages,” because “the goal in
awarding damages is to make an award that will put the non-breaching party in as good a

22

position as he would have been in if the contract had been performed,” and an award of
difference-in-value damages “put the [plaintiffs] in a better position than they would have been
in had the [defendants] installed the flooring as warranted,” thereby “giving the [plaintiffs] a
windfall by giving them new flooring at no cost.” Indeed, in ordinary contract cases, Missouri
law’s concern with avoiding wasteful remedies promotes a rule measuring damages according to
the cost of repair or replacement except where those costs are “disproportionate” to the
diminution in value. Stom v. St. Clair Corp., 153 S.W.3d 360, 364 (Mo. Ct. App. 2005). Based
on its review of Missouri authorities, the Court therefore concludes that where Missouri law
seeks to restore the benefit of a plaintiff’s bargain in cases most analogous to this one, it
generally awards the lesser of the cost of repair or the diminution in market value caused by the
fraud or breach.
3. Texas
That leaves Texas. “The general principle governing damages for breach of contract” in
Texas “is that the complaining party is entitled to recover the amount necessary to put him in as
good a position as if the contract had been performed” — i.e., the benefit-of-the-bargain rule.
Smith v. Kinslow, 598 S.W.2d 910, 912 (Tex. Civ. App. 1980). Similarly, “[t]he actual damages
to which a plaintiff is entitled in” a case under the Texas Deceptive Trade Practices Act
(“TDPTA”), Tex. Bus. & Com. Code §§ 17.41 et seq. “are the same as damages recoverable at
common law,” such as in an implied warranty action, namely “the difference between the market
value of the property as warranted and the market value of the property as delivered.” MercedesBenz of N. Am., Inc. v. Dickenson, 720 S.W.2d 844, 848 (Tex. App. 1986); see also Town E.
Ford Sales, Inc. v. Gray, 730 S.W.2d 796, 801 (Tex. App. 1987) (“[T]he difference between the
actual cost of the . . . automobile and the value of the automobile in its defective condition. . . . is

23

the correct measure of damages in a DTPA action based upon the sale of an automobile.”
(emphasis omitted)). “[I]n order to sustain such a finding of damages” under Texas law, “there
must be evidence of both the actual amount paid by the buyer and the actual market value of the
car as received in its defective condition.” Town E. Ford Sales, 730 S.W.2d at 801; accord
Matheus v. Sasser, 164 S.W.3d 453, 462 (Tex. App. 2005) (“Under either the benefit-of-thebargain or the out-of-pocket measure of damages, the plaintiff is also required to prove the fair
market value of the item as received.”). Thus, Texas courts distinguish between the subjective
value of a defective vehicle to its buyer and its objective market value, which is the appropriate
focus of a benefit-of-the-bargain damages calculation. See, e.g., Vista Chevrolet, Inc. v. Lewis,
704 S.W.2d 363, 371-72 (Tex. App. 1985) (holding that witness testimony as to the buyer’s
private valuation of the defective vehicle was not competent evidence of its market value), aff’d
in part, rev’d in part on other grounds, 709 S.W.2d 176 (Tex. 1986). “Market value is the
amount that would be paid in cash by a willing buyer who desires to buy, but who is not required
to buy, to a willing seller who desires to sell, but who does not need to sell.” GJP, Inc. v. Ghosh,
251 S.W.3d 854, 888 (Tex. App. 2008); accord Taub v. City of Deer Park, 882 S.W.2d 824, 827
(Tex. 1994) (“Market value is the price the property would bring in a transaction between a
willing seller and a willing buyer.”).
Similarly, like Missouri and California, Texas takes the cost of repairs (and the fact of
repairs already performed) into account when calculating how far of his or her bargain a plaintiff
has been kept short. As Texas’s intermediate civil appellate court has held, in an automotivedefect case, “[i]f the cost of repairing the vehicle [is] more than the loss in its fair market value,
then the loss in fair market value [is] the measure of damage. If the car [is] subject to repair, and
the cost of its repair [is] less than the loss in fair market value, then the cost-of-repair measure of

24

damages [is] applicable.” Orr Chevrolet, Inc. v. Courtney, 488 S.W.2d 883, 886 (Tex. Civ. App.
1972). More recently, a California federal court applying Texas law held that because the
defendant had already repaired the defects in the plaintiff’s truck, the plaintiff was “already in
essentially the same position he would have been in had Defendant sold him a non-defective
truck.” Sater v. Chrysler Grp. LLC, No. ED CV 14-700 (VAP), 2016 WL 7377126, at *7 (C.D.
Cal. Oct. 25, 2016). “Permitting [the plaintiff] to retain benefit-of-the-bargain damages for the
difference in value between a non-defective truck and the defective truck” in that circumstance,
“even though Defendant has repaired his truck, would afford him precisely the type of doublerecovery windfall Texas courts have held is impermissible.” Id. 9
In short, based on the available Texas authorities, the Court is persuaded that Texas law
measures benefit-of-the-bargain damages in cases like this one according to the lesser of (1) the
cost of repair or (2) the difference in fair market value between the car as warranted and as sold.
And, where a defendant has successfully repaired a defective vehicle, Texas’s prohibition on
duplicative recoveries will not permit a plaintiff to recover anything further as far as the benefit
of her bargain is concerned. Such a plaintiff has received all for which she bargained.
4. Conclusion
In sum, the Court concludes that in all three of the Bellwether States the proper measure
of benefit-of-the-bargain damages is generally the lower of (1) the cost of repair or (2) the

9

Like Plaintiffs here, see supra note 5, the plaintiffs in Sater relied on this Court’s
statement that New GM’s “recalls, even those sufficient to remedy the defects, do not
compensate Plaintiffs fully for the damages sought here.” 3ACC Op., 2016 WL 3920353, at *40;
see Sater, 2016 WL 7377126, at *8. The Sater Court recognized, correctly, that this Court’s
observation was made at the pleading stage in connection with an analysis of mootness. See
2016 WL 7377126, at *8. In any event — as the Court has already explained, see supra note 5
— the stray statement in this Court’s 2016 Opinion is not controlling here. Nor, in the face of
persuasive Texas authority to the contrary, could it be.

25

difference between the fair market value of the vehicle as warranted and the fair market value of
the vehicle as sold, reduced according to Plaintiffs’ ability to mitigate or avoid damages. That is
the difference between what Plaintiffs bargained for (namely, cars free of safety defects) and
what they got (namely, cars with one or more defects) — which is what the benefit-of-thebargain theory seeks to measure. That is not to say that Plaintiffs are wrong in arguing, or that
the Court was wrong in previously noting, see 4ACC Op., 257 F. Supp. 3d at 401; 3ACC Op.,
2016 WL 3920353, at *10, that benefit-of-the-bargain damages must be measured at the time of
sale. That, after all, is when the “bargain” was made, and the theory measures damages
according to the bargain that was struck. But it does not follow — and it is not the law, at least
in the Bellwether States — that all post-sale conduct is irrelevant. To hold otherwise would
confer on Plaintiffs, and any other plaintiffs who claim similar injuries, an immutable damages
asset, redeemable upon sufficient proof regardless of any mitigated harm. 10 In any event, the
Court is bound to apply the law as it actually exists in each Bellwether State, each of which has,
through its courts or otherwise, chosen not to embrace that type of remedy. Moreover, the
Bellwether States have done so for defensible reasons: From a contract perspective, “efficiency
requires that a disappointed promisee use his remedy to vindicate his expectation interest in the
cheapest possible way, rather than proceeding wastefully. A promisee who may . . . claim[] a
quantum of damages that reflects an unnecessarily expensive route to vindicating his contractual
expectation . . . loses the incentive to cure efficiently.” DANIEL MARKOVITS, CONTRACT LAW &
LEGAL METHODS § 5.4, at 119 (2012). In tort, such a remedy may lead to duplicative recoveries

10

Or, as New GM puts it: “If [P]laintiffs’ argument that post-sale remedies could never be
considered were correct, then short of a court judgment, no seller could ever give or restore a
person’s benefit-of-their bargain post-sale, and double recovery would be commonplace.” ECF
No. 6194 (“New GM SJ Reply”), at 5 n.5.

26

and wasteful levels of precaution. Cf. In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1017 &
n.1 (7th Cir. 2002).
B. The Sufficiency of Plaintiffs’ Benefit-of-the-Bargain Evidence
Having summarized the substantive law of damages in the three Bellwether States, the
Court turns to whether there is evidence in the record that would allow a reasonable factfinder to
find such damages in this case. Significantly, at a trial in these cases, Plaintiffs would bear the
burden of showing that they are entitled to damages, see, e.g., Raishevich v. Foster, 247 F.3d
337, 343 (2d Cir. 2001), which means that for them to defeat New GM’s motion pointing out an
absence of evidence on that issue, they must come forward with evidence that would be
“sufficient to establish the existence” of damages, Celotex, 477 U.S. at 322. More specifically,
although Plaintiffs may not need to prove the amount of damages to an absolute certainty to
survive summary judgment, they do — under the law of all three Bellwether States — need some
evidence of the fact of damages (if not more) to create a triable issue on that element of their
claim. See, e.g., Robi v. Five Platters, Inc., 918 F.2d 1439, 1443 (9th Cir. 1990) (“It is wellestablished under California law that while the fact of damages must be clearly shown, the
amount need not be proved with the same degree of certainty . . . .”); TCL Commc’ns Tech.
Holdings, Ltd. v. Telefonaktienbolaget LM Ericsson, No. SA-CV-14-0341 (JVS), 2016 WL
6562075, at *11 (C.D. Cal. Aug. 9, 2016) (explaining that a plaintiff’s failure to offer proof of
either the fact or quantum of damages requires the entry of summary judgment); Tate v. Goins,
Underkofler, Crawford & Langdon, 24 S.W.3d 627, 635 (Tex. App. 2000) (“While uncertainty
as to the amount of damages is not fatal” at summary judgment, “lack of evidence or uncertainty
as to the fact of damages is.”); see also, e.g., Cole v. Homier Distrib. Co., 599 F.3d 856, 864 (8th
Cir. 2010) (noting that, under Missouri law, a plaintiff must introduce sufficient evidence

27

capable of proving both “the existence and amount of damages with reasonable certainty” in
order to survive summary judgment (alteration and internal quotation marks omitted)); Penzel
Constr. Co., Inc. v. Jackson R-2 Sch. Dist., 544 S.W.3d 214, 244 (Mo. Ct. App. 2017) (noting
that a plaintiff must “present[] sufficient evidence to provide a jury an ‘adequate basis’ for
calculating a rational estimate of damages”); Best Buy Builders, Inc. v. Siegel, 409 S.W.3d 562,
565 (Mo. Ct. App. 2013) (noting that a plaintiff has the “burden of presenting a basis for a
rational estimate of damages” to the jury).
Here, that means that Plaintiffs must have some evidence of, among other things, the
market value of the allegedly defective vehicles that they actually received. See, e.g., Astiana v.
Ben & Jerry’s Homemade, Inc., No. C 10-4387 PJH, 2014 WL 60097, at *12-13 (N.D. Cal. Jan.
7, 2014) (holding that the “plaintiff has provided no damages evidence” because she had not
“offered any expert testimony demonstrating that the market price of Ben & Jerry’s ice cream
with the ‘all natural’ designation was higher than the market price of Ben & Jerry’s without the
‘all natural’ designation. Thus, by definition, there is no evidence showing how much higher the
price of one was than the other” (emphasis added)); In re Vioxx Class Cases, 103 Cal. Rptr. 3d
83, 96 (Ct. App. 2009) (noting that, while “[t]he difference between what the plaintiff paid and
the value of what the plaintiff received is a proper measure of restitution[,] [i]n order to recover
under this measure, there must be evidence of the actual value of what the plaintiff received.”)
(citation omitted) (emphasis added); Town E. Ford Sales, 730 S.W.2d at 801 (noting that, “in
order to sustain . . . a finding of damages” based on the difference in values in an automotive
defect case, “there must be evidence of both the actual amount paid by the buyer and the actual
market value of the car as received in its defective condition”); Larabee, 271 S.W.3d at 548
(noting that a plaintiff must have “sufficient evidence of a difference between the fair market

28

value of the property received and the property had it been as represented” to “support[] the
existence of damages”); Givan v. Mack Truck, Inc., 569 S.W.2d 243, 249 & n.8 (Mo. Ct. App.
1978) (stating that, “even if” a “difference in values” measure of damages “were appropriate,
plaintiffs failed to present any evidence of the value of a new 1972 Mack truck with the uncured
defects”). Moreover, in each Bellwether State, the evidence must actually be of market value —
evidence of private valuations masquerading as evidence of market value will not do. See, e.g.,
Vista Chevrolet, 704 S.W.2d at 371-72 (Texas); Evinger, 726 S.W.2d at 474-75 (Missouri);
Zakaria v. Gerber Prods. Co., 755 Fed. App’x 623, 624-25 (9th Cir. 2018) (California);
Redwood City Elementary Sch. Dist. v. Gregoire, 276 P.2d 78, 81-82 (Cal. Ct. App. 1954)
(California).
Finally, and perhaps most significantly, under the substantive law of all three Bellwether
States, market value is determined by the interaction of both supply and demand. See, e.g.,
Children’s Hosp. Cent. Cal. v. Blue Cross of Cal., 172 Cal. Rptr. 3d 861, 872 (Ct. App. 2014)
(stating that fair market value is “is the price that a willing buyer would pay to a willing seller,
neither being under compulsion to buy or sell, and both having full knowledge of all pertinent
facts” (internal quotation marks omitted)); In re Marriage of Cream, 16 Cal. Rptr. 2d 575, 579
(Ct. App. 1993) (stating that fair market value “is the highest price on the date of valuation that
would be agreed to by a seller, being willing to sell but under no obligation or urgent necessity to
do so, and a buyer, being ready, willing and able to buy but under no particular necessity for so
doing”); Peterson v. Cont’l Boiler Works, Inc., 783 S.W.2d 896, 900 (Mo. 1990) (“Fair market
value is not determined by value to the owner alone; it is measured also by the price that one
who wishes, but does not need to buy, will pay.”); Factory Mut. Ins. Co. v. Alon USA L.P., 705
F.3d 518, 521 (5th Cir. 2013) (noting that, under Texas law, “[m]arket value is the amount a

29

willing buyer, who is under no obligation to buy, would pay to a willing seller, who is under no
obligation to sell”); Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 443 S.W.3d
820, 831 (Tex. 2014) (observing that an “offer price does not, alone, tend to establish the
property’s market value at the time it was made. [An] offer is some evidence of what a willing
buyer will pay, but it is not, alone, evidence of what a willing seller will accept”). Evidence that
fails to account for both phenomena is not evidence of market value.
Relying on these principles, New GM argues that Plaintiffs’ evidence is insufficient to
permit a reasonable jury to award “difference-in-value” damages. See New GM SJ Mem. 19-24
& nn.10-12. New GM contends that the evidence upon which Plaintiffs rely to show a difference
in value between what they paid for and what they received — namely, the expert analysis of
Stefan Boedeker — is insufficient to prove difference-in-value damages under the substantive
law of the three Bellwether States. See id. at 22-24. 11 Notably, in response, Plaintiffs do not
point to any other evidence that could support a finding of damages. Instead, they put all of their
eggs in the Boedeker basket and argue that his testimony is sufficient to establish benefit-of-thebargain damages and thus to stave off summary judgment. See Pls.’ SJ Opp’n 34-36; see also
Boedeker Report; Berman Class Cert. Decl. Ex. 215 (“Boedeker Rebuttal Report”). It follows
that New GM’s motion for summary judgment turns (for present purposes) on whether it is right
about Boedeker’s testimony. If Boedeker’s testimony is not competent evidence of differencein-value damages, then New GM has satisfied its burden on summary judgment by “point[ing] to
an absence of evidence to support an essential element of” Plaintiffs’ claims, and Plaintiffs have
failed to rebut that showing. Goenaga, 51 F.3d at 18. If Boedeker’s testimony would be

11

Plaintiffs rely also on the expert analysis of Joshua Gans. But Gans merely “analyzed
Mr. Boedeker’s . . . analysis” and “did not do his own ‘survey work.” ECF No. 6184, at 2-5.
Thus, Gans’s testimony does not affect the Court’s analysis or conclusions.

30

competent evidence of difference-in-value damages, however, then summary judgment cannot be
granted (at least on the grounds discussed here).
Although the issue is a close one, the Court concludes that New GM has the better of the
argument. The core of Boedeker’s opinion is that “[t]he non-disclosure of defects caused class
members,” including the named Plaintiffs, “to overpay for their vehicles.” Boedeker Report
¶ 22. To arrive at this conclusion, Boedeker used a survey methodology known as “conjoint
analysis.” Id. ¶ 23. Conjoint analysis measures consumer desires by asking survey respondents
about their relative preferences for certain combinations of product features. Id. ¶ 25; see, e.g.,
Saavedra v. Eli Lilly & Co., No. 2:12-CV-9366 (SVW), 2014 WL 7338930, at *4 (C.D. Cal.
Dec. 18, 2014) (“Conjoint analysis is a statistical technique capable of using survey data to
determine how consumers value a product’s individual attributes — often called the market’s
willingness to pay.”); accord Hadley v. Kellogg Sales Co., 324 F. Supp. 3d 1084, 1103-04 (N.D.
Cal. 2018); Zakaria, 2017 WL 9512587, at *9. On Boedeker’s telling, for example, a conjoint
analysis survey might ask consumers whether they would choose to buy cotton seeds with one
set of features for $16, seeds with a more advanced set of features for $75, or if — presented
with that choice — whether they would instead buy neither seed. Boedeker Report ¶ 25 fig. 1.
By evaluating respondents’ answers to such questions, conjoint analyses “measure preferences
for product features, . . . how changes to price affect demand for products or service[s], and . . .
forecast the likely acceptance of a product if brought to market.” Id. ¶ 24 (internal quotation
marks omitted).

31

For example, Boedeker calculated how respondents would value a car with a disclosed
side airbag defect by presenting them with the following survey question:

Id. ¶ 91 fig. 9. By compiling and analyzing responses to that and similar survey questions,
Boedeker was able to estimate the amount that consumers would be willing to pay for a vehicle
with a particular defect that was fully disclosed — as in the above example, a vehicle with a fully
disclosed side airbag defect. See id. ¶ 116. Boedeker was thus able to construct hypothetical
“demand curves” for vehicles in the “but-for” world — that is, the world in which New GM had
disclosed the alleged defects before selling the allegedly defective cars. See id. & fig. 19.
Significantly, however, Boedeker’s model focuses only on changes to the demand side of the
equation. That is, he calculated only how consumers’ willingness to pay would be affected by
the disclosure of the defects at issue. See, e.g., ECF No. 6075 (“Pixton Class Cert Decl.”), Ex.
40 (“7/6/18 Boedeker Dep.”), at 462:11-18 (“Q. You are not opining that new GM would be
willing to sell these option packages at the prices offered in your conjoints, are you? . . . A. I’m
not opining on New GM’s willingness to sell those option packages at those prices. That is

32

correct.”). Indeed, Boedeker’s report explicitly assumes that the supply curve — that is, the
range of prices at which New GM would be willing to sell any given quantity of defective cars
— would remain unchanged in the “but-for” world in which those defects were fully disclosed.
See id. ¶ 66 (“The number of vehicles that were supplied without disclosure in the actual-world
is identical to the number of vehicles supplied in the but-for-world where the defect was
disclosed and for which economic losses have to be computed.”).
In his rebuttal report, Boedeker clarifies that he made this assumption in order to fit a
particular legal interpretation of how to measure benefit-of-the-bargain damages. See Boedeker
Rebuttal Report ¶ 565. “[P]laintiffs’ damage theory,” he explains, “is ‘benefit-of-the-bargain’
damages, which requires no consideration of changed supply because the supply in the but-forworld is the same number of defective vehicles that were supplied in the actual world with the
only difference that GM concealed the defect in the actual world but disclosed the defect at the
point of purchase in the but-for-world.” Id. Thus, Boedeker did not estimate any possible
changes in New GM’s willingness to sell a car with a known, acknowledged, and disclosed
defect — instead, he assumed that “the new equilibrium” (i.e., market) “price” in the but-for
world would be the price at which “all the purchasers of defective vehicles in the actual-world
would also buy in the but-for-world.” Boedeker Report ¶ 67. Using that methodology,
Boedeker came up with a chart that Plaintiffs cite as their sole evidence showing difference-invalue damages. See Berman Decl. Ex. 43. The chart lists each named Bellwether State Plaintiff
and Boedeker’s estimated economic loss damages based on his conjoint analysis of consumer
willingness to pay for a vehicle with the particular alleged defect fully disclosed. Id.; Pls.’ SJ
Opp’n 34.

33

Under the substantive law of the Bellwether States discussed above, this evidence does
not suffice to establish damages. The benefit-of-the-bargain theory awards damages based on
the difference between what the plaintiff paid for and the fair market value of what the plaintiff
received. As Boedeker acknowledges, fair market value is determined according to the
equilibrium price of a good, Boedeker Report ¶ 43, and the “equilibrium price is not the simple
average of all consumers’ willingness to pay. Rather, the equilibrium price depends on supply
and demand,” id. ¶ 44. “In other words,” Boedeker himself explains, “the willingness-to-pay
does not necessarily reflect the actual price that a consumer ends up paying for a product.” Id.
¶ 46. The problem is, as Boedeker himself acknowledges, his model measures only the effect
that a disclosed defect would have on willingness to pay. Id. ¶ 67; Boedeker Rebuttal Report
¶ 565. Indeed, Boedeker straightforwardly admits that he did not inquire into New GM’s
willingness to sell. See, e.g., 7/6/18 Boedeker Dep. 462:11-18; Pixton Class Cert Decl. Ex. 34
(“7/5/18 Boedeker Dep.”), at 235:3-20 (“Q. And there’s no information that you’ve looked at
about GM’s willingness to sell vehicles at different price points at all either? A. No.”); Pixton
Class Cert Decl. Ex. 110 (“6/29/18 Gans Dep.”), at 429:2-8 (“Q. So [Boedeker] did not analyze
GM’s willingness to sell at the actual or but-for price? A. No[.]”); Pixton Class Cert Decl. Ex.
111 (“6/28/18 Gans Dep.”), at 281:6-10 (Gans testifying that his “opinion is that [he] would find
it highly unlikely that GM — it would have wanted to — sell the same amount of cars at the
price implied by Mr. Boedeker’s ‘but-for’ analysis.”). Boedeker’s evidence thus measures
consumers’ private valuations (on average) of certain hypothetical GM vehicles sold with fully
disclosed defects; it does not measure the market value of those vehicles.

34

For that reason, Boedeker’s conjoint analysis does not provide competent proof of
Plaintiffs’ damages. 12 Notably, that conclusion is supported by a handful of decisions that have
(in various procedural contexts) rejected conjoint analyses as evidence of market value for
precisely the same reason. See Zakaria, 2017 WL 9512587, at *17-21 (decertifying a damages
class because a conjoint analysis that measured only plaintiffs’ changed willingness to pay was
“insufficient to establish a basis for calculating either restitution or actual damages” under
California law); In re NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050, 1119
(C.D. Cal. 2015) (denying class certification because the plaintiffs’ proffered conjoint analysis
tested only what consumers were willing to pay “without considering other factors in a
functioning marketplace,” and therefore “[did] not address the fair market value of NJOY’s ecigarettes absent the misrepresentations and omissions.” (emphasis omitted)); id. at 1122 (“A
consumer’s subjective valuation of the purported safety message, measured by their relative
willingness to pay for products with or without the message, . . . does not permit the court to
calculate the true market price of NJOY e-cigarettes absent the purported misrepresentations.”

12

Because the problem with Plaintiffs’ claims is not “some fatal dissimilarity but, rather, a
fatal similarity” — namely, a “failure of proof as to an element of the plaintiffs’ cause of action”
— they are properly resolved “as a matter of summary judgment, not class certification.” Tyson
Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1047 (2016) (internal quotation marks omitted).
That is not to say, however, that the flaws with Boedeker’s analysis identified in this Opinion
would be irrelevant to the other motions before the Court. For example, expert testimony is
admissible under Rule 702 of the Federal Rules of Evidence only if it “help[s]the trier of fact to
understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702. In the absence of
evidence concerning New GM’s willingness to sell, however, Boedeker’s testimony would not
assist the jury in determining any fact in issue. In other words, because his testimony, without
more, is not “sufficiently tied to the facts of the case that it will aid the jury in resolving a factual
dispute” as to Plaintiffs’ damages — i.e., because it is proffered as evidence of market value (as
opposed to merely being offered to prove the willingness of consumers to pay for particular
types of hypothetical cars) — it would be excludable under Rule 702, which “requires a valid
scientific connection to the pertinent inquiry as a precondition to admissibility.” Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 591-92 (1993).

35

(emphasis omitted)); Apple, Inc. v. Samsung Elecs. Co., No. 11-CV-01846 (LHK), 2014 WL
976898, at *12 (N.D. Cal. Mar. 6, 2014) (denying a motion for permanent injunctive relief
because the proffered conjoint analysis measured only demand and did “not account for supply at
all, much less the real-world intersection of market demand and market supply, which sets the
real-world market price,” leaving the plaintiff without evidence of a price increase); Saavedra,
2014 WL 7338930, at *5 (denying class certification because the proffered conjoint analysis
accounted for demand but not supply, and reasoning that such a “method of computing damages
converts the lost-expectation theory from an objective evaluation of relative fair market values to
a seemingly subjective inquiry of what an average consumer wants. The Court has found no
case holding that a consumer may recover based on consumers’ willingness to pay irrespective of
what would happen in a functioning market (i.e. what could be called sellers’ willingness to
sell).”).
Zakaria is representative of these cases. In that case, a class sought compensation for the
alleged overpayment for infant formula based on a misleading label. 2017 WL 9512587, at *1
The parties agreed that the proper measure of damages was “the amount of the price premium, if
any,” that the plaintiffs were induced to pay as a result of the deceptive label. Id. at *18. But
because the plaintiffs’ proposed conjoint analysis showed only consumers’ “potential willingness
to pay a premium,” the court held that “market value [had] not been demonstrated adequately”
for purposes of California law and decertified the class. Id. at *20-21. On appeal, the Ninth
Circuit affirmed by summary order. The Court explained — citing Pulaski — that, under
California law, “plaintiffs can measure class-wide damages using methods that evaluate what a
consumer would have been willing to pay for the product had it been labeled accurately.” 755
Fed. App’x at 624 (memorandum disposition). The Court then continued:

36

Such methods must, however, reflect supply-side considerations and marketplace
realities that would affect product pricing. . . . Dr. Howlett’s conjoint analysis did
not reflect market realities and prices for infant formula products. [It] showed
only how much consumers subjectively valued the 1st and Only Seal, not what
had occurred to the actual market price of Good Start Gentle with or without the
label. Thus, regardless whether consumers were willing to pay a higher price for
the labelled product, the expert’s opinion did not contain any evidence that such
higher price was actually paid; hence, no evidence of restitution or actual
damages was proffered. . . . Dr. Howlett’s conjoint analysis alone therefore does
not create a genuine issue of material fact regarding the amount of restitution or
actual damages.
Id. at 624-25 (emphasis added). In short, where the law awards damages based on the difference
in market value, evidence — including conjoint analyses — that measures only consumers’
subjective valuation or willingness to pay is not sufficient evidence of such damages.
Although none of those decisions are binding on this Court, they are persuasive and
consistent with the substantive law of each Bellwether State discussed above. The Court thus
concludes that Boedeker’s demand-side-only evidence not only fails to estimate hypothetical
market conditions, but also fails to qualify as evidence of benefit-of-the-bargain damages
entirely. That conclusion is further supported by logic and common sense. To see why, one
need only consider a hypothetical Widget Company that manufactures and sells widgets. The
market price of a working widget is $100. One day, the Widget Company discovers that it has
manufactured a batch of widgets with a latent defect that would cost an additional $5 to repair.
The Widget Company calls an expert who performs a conjoint analysis to determine that
consumers would be willing to pay $75 for a widget knowing that it had that particular defect.
Would the Widget Company sell its defective widgets for $75 each? Or (assuming it remained
profitable to do so, given the additional cost) would it pay $5 each to repair each widget, and sell
each one for $100, instead recovering $95 per widget? Obviously, in that scenario the Widget
Company would not sell its defective widgets at the price consumers would be willing to pay for
them. Instead, it would repair the widgets and sell them for $100, making $20 per widget in
37

marginal profit relative to the alternative option (having recouped $95 rather than $75 per widget
sold). The point is that New GM’s willingness to sell would undoubtedly be different in the butfor world in which Boedeker has attempted to model consumers’ willingness to pay — that is,
the world in which the alleged defects in GM’s cars had been fully disclosed. 13
It is true, as Plaintiffs argue, that various courts have approved of the use of conjoint
analyses to measure benefit-of-the-bargain damages — in some cases, no less, analyses proffered
by Boedeker himself. See Hilsley v. Ocean Spray Cranberries, Inc., No. 17-CV-2335 (GPC),
2019 WL 3006465, at *4 (S.D. Cal. July 10, 2019); In re Arris Cable Modem Consumer Litig.,
327 F.R.D. 334, 370-73 (N.D. Cal. 2018); Hadley, 324 F. Supp. 3d at 1105-06 (N.D. Cal. 2018);
Schneider v. Chipotle Mexican Grill, Inc., 328 F.R.D. 520, 542-43 (N.D. Cal. 2018); FitzhenryRussell v. Dr. Pepper Snapple Grp., Inc., 326 F.R.D. 592, 606 (N.D. Cal. 2018); In re MyFord
Touch Consumer Litig., 291 F. Supp. 3d at 970-71; Broomfield v. Craft Brew All., Inc., No. 17CV-01027 (BLF), 2018 WL 4952519, at *19 (N.D. Cal. Sept. 25, 2018); Davidson v. Apple, Inc.,
No. 16-CV-04942 (LHK), 2018 WL 2325426, at *22 (N.D. Cal. May 8, 2018); In re Dial
Complete Mktg. & Sales Practices Litig., 320 F.R.D. 326, 332 (D.N.H. 2017); Sanchez-Knutson
v. Ford Motor Co., 181 F. Supp. 3d 988, 995 (S.D. Fla. 2016); In re: Lenovo Adware Litig., No.
15-MD-02624 (RMW), 2016 WL 6277245, at *21 (N.D. Cal. Oct. 27, 2016); In re ConAgra
Foods, Inc., 90 F. Supp. 3d 919, 1023-32 (C.D. Cal. 2015); Guido v. L’Oreal, USA, Inc., No.
2:11-CV-01067 (CAS), 2014 WL 6603730, at *7-14 (C.D. Cal. July 24, 2014); see also ECF No.

13

New GM drives the point home by noting that Boedeker’s model suggests that Plaintiff
Deloris Hamilton should receive as much as $4,714 in benefit-of-the-bargain damages even
though she paid only $3,500 for her car. New GM SJ Reply 13; see New GM 56.1 Resp. ¶ 297
table 1, at 221; New GM 56.1 Reply ¶ 245. That is, a jury would have to conclude that New GM
would have been willing to pay Hamilton to accept her car. In these circumstances, no
reasonable jury could do so.

38

6187 (“Pls.’ Boedeker Daubert Opp’n”), at 34-41. In some of these cases (for example, Arris
Cable and Sanchez-Knutson), however, the courts did so with little or no consideration of the
market price issue. In others (for example, Guido, Lenovo, and ConAgra), the courts found
(whether correctly or not) that the conjoint analyses did take into consideration market prices.
See Zakaria, 2017 WL 9512587, at *19-20 (distinguishing Lenovo and ConAgra on that basis).
And the remaining cases are distinguishable, unpersuasive, or both.
One group of these cases, for example, involved classic allegations of mislabeling. See
Hadley, 324 F. Supp. 3d at 1105; Broomfield, 2018 WL 4952519, at *19; Fitzhenry-Russell, 326
F.R.D. at 606; Dial Complete Mktg., 320 F.R.D. at 329; Hilsley, 2019 WL 3006465, at *1;
Schneider, 328 F.R.D. at 527. On the whole, the courts in these cases found that the conjoint
analyses “adequately account[ed] for supply-side factors” because “(1) the prices used in the
surveys underlying the analyses reflect[ed] the actual market prices that prevailed during the
class period; and (2) the quantities used (or assumed) in the statistical calculations reflect[ed] the
actual quantities of products sold during the class period.” Hadley, 324 F. Supp. 3d at 1105. In a
classic mislabeling case, however, that makes sense. A conjoint survey that asks respondents
whether they would rather pay x for a product labeled “100% Fruit Juice” or y for a similar
product labeled “50% Fruit Juice,” for example, would account for supply-side factors if both x
and y reflect the prices for which juice companies actually sell similarly labeled products in the
marketplace. Accounting for supply-side factors is not so simple, however, where the alleged
misrepresentations and omissions concern dangerous defects, as in this case. 14 After all,

14

To extend the hypothetical, this case is closer to one in which a merchant is alleged to
have sold juice containing 5% poison (and to have concealed that fact). To pass muster under
the Hadley line of cases, the conjoint analysis in such a case would have to assemble marketbased pricing data for the equivalent of a juice box labeled “5% Poison.” Separate and apart
from the fact that consumers’ willingness-to-pay would likely be driven to zero by such a label,
39

products containing such defects are rarely (if ever) sold (or allowed to be sold by regulators)
when the defects are fully disclosed. It follows that market data for products in the but-for
scenario are not available, as Boedeker himself concedes. See Boedeker Rebuttal Report ¶ 442
(acknowledging that “no market data is available on the value that consumers place on
defects”). 15
In the other cases, courts approved of conjoint analyses — including Boedeker’s — on
the ground that they “account[] for the supply side of the equation” because they “discuss[] the
role of supply in conjoint analysis at length.” Davidson, 2018 WL 2325426, at *22. Needless to
say, however, merely including a section titled “Consideration of the Supply Side” in an expert
report — as Boedeker does here, see Boedeker Report 22 — does not cut it if the analysis
reflected in that expert report does not actually include meaningful consideration of supply-side
factors. That is the case here. Boedeker’s key supply-side assumptions are (1) that New GM’s
marginal costs would be the same in the but-for world where it disclosed the defects at the point
of sale and (2) that the supply — that is, the number of cars New GM would sell — would also
be the same. See Boedeker Report ¶¶ 67-68 (explaining that his model “quantif[ies] the new
equilibrium price where all the purchasers of defective vehicles in the actual-world would also

cf., e.g., New GM 56.1 Reply ¶ 148 (noting one Plaintiff’s testimony “that. . . she would not have
purchased her vehicle if GM had told her it contained a defect like the ignition switch defect”),
common sense suggests that it would be hard, if not impossible, to find historical data reflecting
manufacturers’ willingness to sell such a product in a market transaction. To satisfy Hadley,
however, that is what a conjoint analysis would need to do.
15

Plaintiffs dispute that Boedeker used “arbitrary” prices, arguing that he instead “used
prices based on pricing data obtained from unchallenged and reliable sources.” Pls.’ Boedeker
Daubert Opp’n 2 (citing Boedeker Rebuttal Report ¶ 442). A closer look at Boedeker’s Rebuttal
Report, however, reveals that those sources do not reflect any data about prices for the defects
that Boedeker attempts to measure in his survey. Instead, Boedeker apparently derived his
hypothetical prices by consulting reports about how much it cost to produce each of the safety
features included in his scenarios. See Boedeker Rebuttal Report ¶ 442.

40

buy in the but-for-world”). But those assumptions are undermined by Plaintiffs’ own evidence,
including Boedeker’s report and testimony themselves. See 7/5/18 Boedeker Dep. 62-63; see
also Boedeker Rebuttal Report ¶ 387 (acknowledging that an assumption of inelastic supply
would be “fundamentally flawed” because it would “mean[] that a given product is supplied by
the manufacturer in the same quantity no matter what the price is”); 6/28/18 Gans Dep. 281:6-10
(conceding that it is “highly unlikely that GM . . . would have wanted to sell the same amount of
cars at the price implied by Mr. Boedeker’s ‘but-for’ analysis”).
More fundamentally, those assumptions are inconsistent with the substantive law in all
three of the Bellwether States, which defines market value to mean “the price that a willing
buyer would pay to a willing seller, neither being under compulsion to buy or sell.” Children’s
Hosp. Cent. Cal., 172 Cal. Rptr. 3d at 872 (California) (internal quotation marks omitted);
accord Peterson, 783 S.W.2d at 900 (Missouri); Factory Mut. Ins. Co., 705 F.3d at 521 (Texas).
To assume, as Boedeker does, that New GM would sell the same number of vehicles in the butfor world despite commanding a lower price for each vehicle at the same marginal cost per sale
is to assume a massive forced sale — contrary to the substantive law in all three Bellwether
States. Put differently, although Boedeker’s hypothetical constant supply curve admits that New
GM would ordinarily be willing to sell a smaller quantity of vehicles at the lower price
consumers would then be willing to pay, Boedeker simply assumes that New GM would be
willing to sell the same quantity anyway, notwithstanding the lower price. See Boedeker Report
21 fig. 8; cf. MyFord Touch Consumer Litig., 291 F. Supp. 3d at 970 (discussing a graph similar
to the one displayed as Figure 8 to Boedeker’s report in this case and concluding that “the supply
curve that concerns Mr. Boedeker’s analysis is effectively vertical — supply is fixed regardless

41

of price in this region of the graph”). 16 For purposes of this motion, that is not enough. If a gap
remains in the evidence that could support factfinding about market value, the Bellwether States
do not permit a plaintiff to plug the gap with assumptions. Instead, the Bellwether States require
a plaintiff to adduce evidence that, like direct evidence of actual market prices, appropriately
reflects each composite element of market value. Here, because Boedeker’s evidence is
insufficient to establish market value under the law in each of the Bellwether States, it is
insufficient to stave off summary judgment to the extent the Court has explained.
CONCLUSION
In the final analysis, the Court’s task here is not to decide what makes sense as a matter
of policy. Cf. MyFord Touch, 291 F. Supp. 3d at 971 (citing “policy reasons to afford Plaintiffs
a reasonable opportunity to posit damages based on a more flexible approach to economic
theory”). Nor is it even to evaluate whether Boedeker’s analysis passes muster as a matter of
economic theory. Instead, it is to apply the substantive law of each Bellwether State. As
discussed, that law requires that benefit-of-the-bargain damages be calculated based on the
difference in market value between the product as warranted and the product as sold and defines

16

The Court declines to rely on MyFord Touch Consumer Litigation for another reason.
Conducting a Daubert analysis, the court in that case accepted Boedeker’s testimony on the
ground that it could not “conclude at [that] stage that Mr. Boedeker’s assumption that the supply
would have been the same regardless of the change of price within the range of his survey is
indisputably wrong.” 291 F. Supp. 3d at 970 (internal quotation marks omitted); see also id.
(“The assumption that Ford would have sold the same number of vehicles notwithstanding a drop
in value . . . is not so far-fetched as to be indisputably wrong.” (emphasis added)). Whether or
not the “not indisputably wrong” standard is an accurate statement of the law in the Ninth
Circuit, it is not an accurate statement of the law in the Second Circuit, where “expert testimony
should be excluded if it is speculative or conjectural, the admission of expert testimony based on
speculative assumptions is an abuse of discretion,” and “[a]n expert’s opinions that are without
factual basis and are based on speculation or conjecture are . . . inappropriate material for
consideration on a motion for summary judgment.” Major League Baseball Props., Inc. v.
Salvino, Inc., 542 F.3d 290, 311 (2d Cir. 2008) (alteration and internal quotation marks omitted).

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market value as the product of both a consumer’s willingness to pay and a merchant’s
willingness to sell, when neither are under any compulsion to do so. Applying that law, the
Court is compelled to conclude that Boedeker’s analysis does not, without more, suffice to prove
that any of the Bellwether State Plaintiffs suffered benefit-of-the-bargain damages based on a
difference in value. Because there is no more — that is, Plaintiffs point to no other evidence
from which a factfinder could find damages based on a difference in value — there is an
“absence of evidence” on an “essential element” of Plaintiffs’ claims for such damages.
Goenaga, 51 F.3d at 18. Accordingly, the Court must grant New GM’s motion for summary
judgment on the named Plaintiffs’ claims to the extent they seek damages measured as the
difference in value between their cars as bargained-for and their cars as received.
In their various motion papers, the parties have briefed many other issues, including but
not limited to the viability of various claims and/or other damages theories (such as Plaintiffs’
bankruptcy-fraud claims, their claims for “lost time” damages, the claims of Plaintiffs who
purchased Old GM or used vehicles, the claims of Plaintiffs who disposed of their vehicles
before the recalls, and the claims of Plaintiffs whose vehicles are subject to “service parts”
vehicle recalls), the effectiveness of New GM’s recalls and repairs, the availability of injunctive
relief, class certification, and the admissibility of certain experts’ testimony. In light of the
ruling above, however, the Court will refrain from reaching such issues pending discussion
between and with the parties and, possibly, new briefing. It does so because the ruling almost
certainly moots some of the remaining issues and, with respect to the issues that are not mooted
(for example, class certification), the ruling changes the landscape in dramatic ways that may call
for new briefing. On top of that, and given that changed landscape, it may well make sense for
the parties to revisit the issue of settlement. And, of course, Plaintiffs may petition for

43

certification of an interlocutory appeal. In short, even though the parties have spilled
considerable ink briefing other issues, the Court concludes, as a matter of efficient case
management, that it makes more sense to stop where it has than to go on. 17
The parties should immediately meet and confer with respect to the implications of this
Opinion and Order and be prepared to address the next steps for both this litigation and the
pending motion to withdraw the bankruptcy reference in 19-CV-1852 (JMF) — or, at a
minimum, a process for determining the next steps — at the status conference on August 15,
2019. 18
The Clerk of Court is directed to docket this Opinion and Order in 14-MD-2543, 14-MC2543, and 19-CV-1852, and to terminate 14-MD-2543, ECF Nos. 5845, 5854, 5858, 6062, 6065,
6067, 6069,6108, 6110, 6114, 6116, and 6118.

SO ORDERED.
Dated: August 6, 2019
New York, New York

__________________________________
JESSE M. FURMAN
United States District Judge

17

The Court had previously set January 13, 2020 as a tentative trial date for the Bellwether
State Plaintiffs’ claims. ECF No. 6272, § IV. Given both the timing and substance of the
Court’s ruling today, it is apparent that this case is not going to trial on that date, if at all.
Accordingly, the trial date is adjourned sine die.
18

At the August 15, 2019, the parties should also be prepared to address a process for
resolving whether and to what extent the parties’ submissions in connection with the motions for
summary judgment, class certification, and Daubert can remain sealed or redacted. For now, the
parties need not follow the procedures set forth in Section X of MDL Order No. 77.

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