In re Gen. Motors LLC Ignition Switch Litig.

• Decision Date: 12 December 2019
• Docket Number: 14-MD-2543 (JMF),14-MC-2543 (JMF)
• Citation: 427 F.Supp.3d 374
• Parties: IN RE: GENERAL MOTORS LLC IGNITION SWITCH LITIGATION This Document Relates to All Actions
• Court: U.S. District Court — Southern District of New York

427 F.Supp.3d 374

IN RE: GENERAL MOTORS LLC IGNITION SWITCH LITIGATION

This Document Relates to All Actions

14-MD-2543 (JMF)

14-MC-2543 (JMF)

United States District Court, S.D. New York.

Signed December 12, 2019

OPINION AND ORDER

JESSE M. FURMAN, United States District Judge:

[Regarding Economic Loss Plaintiffs' Motion for Reconsideration of the Court's Summary Judgment Ruling or, in the Alternative, for Certification of Interlocutory Appeal]

This litigation, general familiarity with which is assumed, arises from alleged defects in the ignition switches and other features of certain General Motors vehicles. Some of the claims brought against General Motors LLC ("New GM") — those relevant to the present motion — are brought by Plaintiffs on behalf of putative classes of GM car owners and lessors whose vehicles were subject to recalls and who now seek to recover "economic losses," on the theory that they overpaid for their vehicles because "a car with a safety defect is worth less than a car without a safety defect." In re Gen. Motors LLC Ignition Switch Litig. , No. 14-MD-2543 (JMF), 2016 WL 3920353, at *7 (S.D.N.Y. July 15, 2016). After several rulings on the viability of economic loss claims under the law of various jurisdictions, 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, at 2; ECF No. 4521. Thereafter, New GM filed a motion for summary judgment with respect to the claims of the putative classes in each Bellwether State. See ECF No. 5858.

In an Opinion and Order entered on August 6, 2019, the Court granted New GM's motion in several noteworthy respects. See ECF No. 7019; In re Gen. Motors LLC Ignition Switch Litig. , 407 F. Supp. 3d 212 (S.D.N.Y. 2019) (" Order "). In particular, the Court reached three "significant conclusions." Id. at 217. First, the Court held "that, in all three Bellwether 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." Id. Second, the Court explained: "[T]hat 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." Id. Third, and most significantly, the Court concluded that, "whether or not Plaintiffs' claims for ‘cost-of-repair’ damages could survive New GM's motion," Plaintiffs' "claims for ‘difference-in-value’ damages" could not because Plaintiffs' sole evidence of such damages — the expert testimony of Stefan Boedeker — was insufficient as a matter of Bellwether State law to establish the existence of damages, an essential element of any such claim. Id. at 216-217, 213-240. In closing, the Court acknowledged that its ruling "change[d] the landscape in dramatic ways," and predicted that Plaintiffs might "petition for certification of an interlocutory appeal." Id. at 241.

True to the Court's prediction, Plaintiffs now move for certification of an interlocutory appeal. See ECF No. 7055. But they do so only in the alternative. The primary relief they seek is reconsideration of several portions of the Court's ruling. For the reasons that follow, the Court concludes that there is no basis to that request and, thus, denies Plaintiffs' motion for reconsideration. But, in no small part because of the significance of the Court's ruling to resolution of this complex litigation, the Court concludes that appellate review would be worthwhile, and thus grants Plaintiffs' motion for certification of an interlocutory appeal.

MOTION FOR RECONSIDERATION

The Court begins with Plaintiffs' motion for reconsideration. Plaintiffs' motion is governed by Federal Rule of Civil Procedure 59(e) and Local Civil Rule 6.3, which are meant to "ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters." Medisim Ltd. v. BestMed LLC , No. 10-CV-2463 (SAS), 2012 WL 1450420, at *1 (S.D.N.Y. Apr. 23, 2012) (quoting Grand Crossing, L.P. v. U.S. Underwriters Ins. Co. , No. 03-CV-5429 (RJS), 2008 WL 4525400, at *3 (S.D.N.Y. Oct. 6, 2008) ). District courts "ha[ve] broad discretion in determining whether to grant a motion [for reconsideration]." Baker v. Dorfman , 239 F.3d 415, 427 (2d Cir. 2000). "The major grounds for justifying reconsideration are ‘an intervening change in controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.’ " Terra Sec. ASA Konkursbo v. Citigroup, Inc. , 820 F. Supp. 2d 558, 560 (S.D.N.Y. 2011) (quoting Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd. , 956 F.2d 1245, 1255 (2d Cir. 1992) ). "The standard for granting [a motion for reconsideration] is strict, and [such a motion] will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked." Shrader v. CSX Transp., Inc. , 70 F.3d 255, 257 (2d Cir. 1995) ; see also Montanile v. Nat'l Broad. Co. , 216 F. Supp. 2d 341, 341 (S.D.N.Y. 2002) ("Reconsideration of a court's previous order is an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources." (internal quotation marks omitted)). In short, Rule 59(e) and Local Civil Rule 6.3 must be "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." United States v. Treacy , No. 08-CR-366 (RLC), 2009 WL 47496, at *1 (S.D.N.Y. Jan. 8, 2009) (internal quotation marks omitted).

Here, Plaintiffs seek reconsideration of three aspects of the Court's summary judgment Opinion and Order. First, they challenge the Court's conclusion that, under California law, benefit-of-the-bargain damages may be mitigated, including through post-sale recalls and repairs. ECF No. 7056 ("Pls.' Mem."), at 3-8. Second, they argue that Texas law does not allow complete mitigation of benefit-of-the-bargain damages sustained by plaintiffs whose products manifested defects. Pls.' Mem. 8. Third, and most significantly, they urge the Court to reverse its holding that the evidence — in particular, Boedeker's expert analysis — is insufficient as a matter of law to establish benefit-of-the-bargain damages based on a difference in value. Pls.' Mem. 8-16. The Court will address each of these arguments in turn.

A. Post-Sale Mitigation Under California Law

In its Opinion and Order, the Court held that in each of the Bellwether States, including California, "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." Order , 407 F.Supp.3d at 222-23 ; see also id. at 225 ("California law also recognizes the relevance of post-sale mitigation ... to the calculation of a monetary award under any of Plaintiffs' theories."). The California Plaintiffs argue that this holding contradicts California law and Ninth Circuit precedent. Pls.' Mem. 3-8. They further argue that, under U.S. Bank Nat'l Ass'n v. Bank of Am., N.A. , 916 F.3d 143 (2d Cir. 2019) and, more foundationally, under Factors Etc., Inc. v. Pro Arts, Inc. , 652 F.2d 278 (2d Cir. 1981), the Court was required to defer to that Ninth Circuit precedent. Pls.' Mem. 1, 4, 5 n. 3; see ECF No. 7299 ("Reply"), at 3.

The Court disagrees. As an initial matter, the California Plaintiffs may have waived their argument that U.S. Bank Nat'l Ass'n and Factors required this Court to give "conclusive deference" to the Ninth Circuit's interpretation of California law because they did not raise that argument in their opposition to New GM's motion for summary judgment. See, e.g. , Phillips v. City of New York , 775 F.3d 538, 544 (2d Cir. 2015) (holding that "arguments ... raised for the first time in [a] motion for reconsideration" are "not properly presented to the district court" and are therefore "waived"); see also ECF Nos. 6059, 6987 (failing to mention Factors or argue that conclusive deference is owed to the Ninth Circuit's interpretation of California law). To be sure, the precedential effect of authority is not generally subject to waiver. See Pls.' Mem. 2. If a district court failed to follow a Supreme Court precedent, for example, no one would say that the losing party waived the right to complain because it failed to cite a case for the basic proposition that a district court is bound by the Supreme Court. But Factors deference is not a conventional precedential rule of that sort, and, as the California Plaintiffs concede, it does not always apply. See Reply 3 (noting that Factors does not require deference to decisions that "disregarded clear signals from the state's highest court pointing toward a different rule" (quoting Factors , 652 F.2d at 283 )); see also Factors , 652 F.2d at 283 ("A federal court in another circuit would be obliged to disregard a state law holding by the pertinent court of appeals if persuaded that ... prior state court decisions had been inadvertently overlooked."). Thus, a party seeking to invoke Factors deference should — if only as a matter of prudence — bring it to the attention of the other side and the court and should not assume that a court will properly apply it sua sponte. The California Plaintiffs also contend that, even if Factors deference were subject to waiver, they did not waive the argument because they made it immediately after "the Court explicitly declined to follow Ninth Circuit precedent for the first time." Reply 1. But a party cannot excuse its failure to make an argument on the ground that the court has not yet rejected it. Were it...