United States District Court, S.D. New York
IN RE: GENERAL MOTORS LLC IGNITION SWITCH LITIGATION This Document Relates To All Actions
New GM's Motion for Summary Judgment with Respect to
Plaintiffs' Claims for Benefit-of-the-Bargain Damages]
MEMORANDUM OPINION AND ORDER
M. FURMAN, United States District Judge
multidistrict litigation, familiarity with which is presumed,
Plaintiffs seek recovery from General Motors LLC (“New
GM”) on behalf of a broad putative class of General
Motors car owners and lessors whose vehicles were subject to
recalls for certain defects. They allege that they were
harmed by, among other things, a drop in their vehicles'
value due to the defects. Thus far, the Court has entertained
two partial motions to dismiss, addressing - in lengthy
opinions - the legal validity of Plaintiffs' claims under
federal law and the laws of fifteen states and the District
of Columbia. See In re: Gen. Motors LLC Ignition Switch
Litig., No. 14-MD-2543 (JMF), 2017 WL 2839154 (S.D.N.Y.
June 30, 2017), as amended on reconsideration by No.
14-MD-2543 (JMF), 2017 WL 3443623 (S.D.N.Y. Aug. 9, 2017);
In re: Gen. Motors LLC Ignition Switch Litig.
(“TACC MTD Op.”), No. 14-MD-2543 (JMF), 2016
WL 3920353 (S.D.N.Y. July 15, 2016). To the extent relevant
here, the Court largely upheld Plaintiffs' theory of
damages known as the “benefit-of-the-bargain defect
theory.” That theory provides that “Plaintiffs
who purchased defective cars were injured when they purchased
for x dollars a New GM car that contained a latent
defect; had they known about the defect, they would have paid
fewer than x dollars for the car (or not bought the
car at all), because a car with a safety defect is worth less
than a car without a safety defect.” TACC MTD
Op., 2016 WL 3920353, at *7.
the Court's opinions, not to mention the fact that
discovery is still ongoing, New GM requested leave a few
months ago to file a motion seeking summary judgment with
respect to Plaintiffs' claims for benefit-of-the-bargain
damages under the laws of the sixteen jurisdictions subject
to the prior motions to dismiss. (Docket No. 4338, at 1).
Lead Counsel did not oppose the request, but expressed some
skepticism about the “basis” for a motion given
the Court's rulings on New GM's motions to dismiss.
(Aug. 11, 2017 Status Conf. Tr. (“Tr.”) 14,
see also Docket No. 4337, at 1 & n.1). At a
status conference, the Court expressed some misgivings of its
own about New GM's proposal. (See Tr. 9-10).
Specifically, the Court cited its aversion to
“piecemeal motion practice” and raised the
question of whether a summary judgment motion would be
premature given the Court's prior rulings on the
benefit-of-the-bargain theory and the fact that discovery was
not yet complete. (See id.). Ultimately, based on
New GM's view that a ruling on its proposed motion
“would materially advance the litigation and inform the
Court's later decisions on motion practice regarding
class certification and summary judgment, ” (Docket No.
4338, at 1), the Court put aside those misgivings and granted
New GM leave to proceed. (Tr. 14; see also Docket
No. 4499, ¶ 3). New GM's motion is now fully
review of the parties' motion papers, the Court -
regrettably - concludes that its initial misgivings were well
founded and that New GM's motion is premature. The crux
of New GM's argument is that Plaintiffs did, in fact,
receive the benefit of their bargain because New GM
“recalled their vehicles, fixed (or offered to fix)
each vehicle free of charge to each plaintiff, and incurred .
. . [costs] for the repairs.” (Docket No. 4681
(“New GM's Br.”), at 1). Plaintiffs counter
that all of the states at issue “calculate
bargain-of-the-benefit [sic] damages as of the time
of the sale” and, therefore, that “damages
calculations would not be affected by any
repairs.” (Docket No. 4805 (“Pls'
Br.”), at 1). In the alternative, Plaintiffs contend
that there are genuine disputes of material fact with respect
to whether New GM's recall repairs “actually fix
the defects at issue.” (Id. at 53). On that
front, each side offers the opinions of experts.
(Compare, e.g., Docket No. 4682, ¶ 30,
with Docket No. 4806, ¶ 38). Additionally, each
side contends that the other's experts' testimony may
be inadmissible and signals the likelihood of
Daubert motions to come. (See Docket No.
4807, ¶ 30 (“No expert has been qualified or
offered to testify about these opinions, and the foundation
required under Rule 702 has not been established.”);
Docket No. 4868, at 27 (arguing that Plaintiffs' expert
reports are “unsupported and inadmissible” and
“will be subject to Daubert briefing at the
Court has not exhausted its research on the question of
whether and to what extent evidence of post-sale mitigation
would affect the availability or calculation of damages in
the sixteen jurisdictions at issue. But it has done enough
research to conclude that many, if not most (or even all),
states would factor such evidence into the analysis. Judge
Chen's decision in In re Myford Touch Consumer
Litigation, No. 13-CV-3072 (EMC), 2016 WL 7734558 (N.D.
Cal. Sept. 14, 2016), is instructive. In that case, Ford
contested the plaintiffs' motion to certify a class of
purchasers of Ford vehicles with a defective computer system.
See Id. Plaintiffs argued that, under California
law, damages need not “account for benefits received
after purchase” - in that case, repairs that Ford had
made to the computer system. Id. at *18. Judge Chen
disagreed, concluding that “Plaintiffs are incorrect in
arguing their damages cannot be reduced by post-purchase
mitigation.” Id. at *19 (citing Clayworth
v. Pfizer, Inc., 233 P.3d 1066, 1087 (Cal. 2010);
Restatement (Second) of Contracts § 350). The Court then
examined the plaintiffs' “evidence that Ford did
not meaningfully fix the [computer system], ”
ultimately concluding that whether the fix was successful was
“a factual dispute, going to the merits of the
case.” Id.; see also Liles v.
Pentecost, 105 So. 198, 198-99 (Ala. 1925) (holding
that, while the “general rule as to measure of damages
in [fraudulent misrepresentation cases] is the difference
between the actual value of the property at the time of the
sale . . . and its represented value, ” that rule does
not apply where, “because of peculiar circumstances of
the case involved, such difference fails to measure
accurately the loss sustained”).
light of the foregoing, the Court surmises (though, to be
clear, does not yet hold) that the viability of
Plaintiffs' claims for benefit-of-the-bargain damages is
likely to turn on the question of whether New GM actually
fixed the recalls at issue in its many recalls. That, in
turn, would require a determination of whether each
side's expert testimony is admissible - an issue that the
parties address barely, if at all, and as to which they plan
to file motions in the future. It is for those reasons that
the Court concludes New GM's motion is premature. That
is, the Court concludes that it would be more efficient and
sensible to defer resolution of the issues raised in New
GM's current motion until the Court has the opportunity,
on a full record, to determine the admissibility of each
sides' experts. See, e.g., Celebrity Cruises
Inc. v. Essef Corp., No. 96-CV-3135 (JCF), 2005 WL
3527142, at *5 (S.D.N.Y. Dec. 23, 2005) (“It will be
far more efficient to determine whether [the plaintiff] has
sufficient evidence to support its damage claims after it has
been established what evidence is admissible. Therefore, [the
defendant]'s motion is denied with leave to renew
following a decision on the Daubert
motions.”); Allstate Ins. Co. v. Heil, No.
07-CV-0097 (JMS), 2007 WL 4270355, at *2 n.2 (D. Haw. Dec. 6,
2007) (“Because the parties have not briefed the Rule
702 issue in anything more than a cursory way as part of
their summary judgment arguments, the court declines to
resolve the expert admissibility issues on the record before
it.”). Accordingly, New GM's motion for summary
judgment as to Plaintiffs' claims for
benefit-of-the-bargain damages is DENIED without
prejudice. Counsel should confer on whether and how
the motion should be renewed and be prepared to address that
question at a future status conference.
Clerk of Court is directed to terminate Docket No. 4679.
 The Court recognizes, as New GM
argues, that Plaintiffs do not dispute that New GM's
recall “cured” the “Power Steering
Defect.” (See Pls' Br. 53-54). In the
interest of avoiding piecemeal resolution of New GM's
motion, the Court will also defer resolution of this argument