In re Gen. Motors LLC
| Decision Date | 30 June 2017 |
| Docket Number | 14-MD-2543 (JMF), 14-MC-2543 (JMF). |
| Citation | 257 F.Supp.3d 372 |
| 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 |
Elizabeth J. Cabraser, Lieff, Cabraser, Heimann & Bernstein, San Francisco, CA, Robert Hilliard, Hilliard Munoz Gonzales LLP, Corpus Christi, TX, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, Daniel Fayne Dotson, Law Office of Daniel F. Dotson, Whitesburg, KY, Mark Parker Robinson, Robinson Calcagnie
Robinson Shapiro Davis, Inc., Newport Beach, CA, for Plaintiff.
Roseann Hinds, pro se.
Joseph Sylvester, pro se.
Andrew Baker Bloomer, Kirkland & Ellis LLP, Chicago, IL, for Defendant.
[Regarding New GM's Partial Motion To Dismiss the Fourth Amended Consolidated Class Action Complaint]
BACKGROUND ...392
LEGAL STANDARDS ...394
A. Brand DevaluationClaims....395
B.Damages for Lost Time ...398
C.The Relevant Time Period for New GM's Economic LossLiability....400
D.State Law Claims ...404
6.Pennsylvania ...434
a. Economic LossDoctrine....435
b. Manifestation ...436
c. The UTPCPL ...440
7.Texas ...445
This multidistrict litigation ("MDL"), familiarity with which is assumed, arose from the recall in February 2014 by General Motors LLC("New GM") of General Motors ("GM") vehicles that had been manufactured with a defective ignition switch—a switch that could too easily move from the "run" position to the "accessory" and "off" positions, causing moving stalls and disabling critical safety systems (such as the airbag).Following that recall, New GM recalled millions of other vehicles, some for ignition switch-related defects and some for other defects.In this litigation, Plaintiffs seek recovery on behalf of a broad putative class of GM car owners and lessors whose vehicles were subject to those recalls, arguing that they have been harmed by, among other things, a drop in their vehicles' value due to the ignition switch defect and other defects.
Their operative complaint—the Fourth Amended Consolidated Complaint or "FACC"—runs to over a 1700 pages and 7500 paragraphs, and includes claims under state law brought by named Plaintiffs in all fifty states and the District of Columbia.
In conjunction with the parties, the Court decided early on not to entertain a motion to dismiss all of the Plaintiffs' economic loss claims at once—given, among other things, the number and scope of those claims; the possibility that the litigation would be materially affected by parallel proceedings in (and arising out of)bankruptcy court; and the likelihood that the parties could ultimately agree upon how the Court's rulings as to some state law claims would apply to others, saving the need for the parties to brief and the Court to decide the same issues in fifty-one different jurisdictions.In an opinion filed almost exactly one year ago with respect to the then-operative Third Amended Consolidated Complaint ("TACC"), the Court ruled on the validity of, among other things, Plaintiffs' claims in eight jurisdictions.Since that time, Plaintiffs filed the FACC and New GM filed another partial motion to dismiss, pursuant to Rules 9(b)and12(b)(6) of the Federal Rules of Civil Procedure, focusing—by agreement—on the claims of Plaintiffs from eight jurisdictions that were not addressed in the Court's last Opinion.This Opinion and Order addresses those claims and a few issues that are not state-specific (that is, that apply to all Plaintiffs' claims)—namely, a revised version of Plaintiffs' "brand devaluation" theory of damages, which was pled in the TACC and dismissed in the Court's last Opinion; Plaintiffs' claims for damages in the form of "lost time" spent having their vehicles repaired; and the viability of economic loss claims brought by Plaintiffs who purchased their vehicles before New GM came into existence on July 10, 2009, or who disposed of their vehicles prior to GM's announcement of the recalls in 2014.
For the reasons stated below, New GM's motion to dismiss is GRANTED in part and DENIED in part.More specifically, it is GRANTED with respect to Plaintiffs' repleaded "brand devaluation" claims, but DENIED with respect to Plaintiff's lost-time-to repair claims.Additionally, it is GRANTED with respect to Plaintiffs who purchased their vehicles prior to New GM's inception or disposed of their vehicles prior to the recall announcement.And finally, New GM's motion to dismiss Plaintiffs' claims in Alabama, Illinois, Massachusetts, Michigan, New York, Pennsylvania, Texas, and Wisconsin is GRANTED in part and DENIED in part, depending on, among other things, whether each state's law allows claims in the absence of a manifested defect, requires a special trust relationship between the parties for a duty to disclose to arise, and permits plaintiffs to plead both contract claims and unjust enrichment claims.Ultimately, for the reasons that follow, most of Plaintiffs' consumer fraud, fraudulent concealment, and breach of implied warranty claims survive, while the bulk of Plaintiffs' unjust enrichment claims must be and are dismissed.
The underlying facts giving rise to this MDL proceeding are set forth in this Court's prior opinions, familiarity with which is presumed.See, e.g. , In re General Motors LLC Ignition Switch Litig. , 14-MD-2543 (JMF), 2016 WL 3920353(S.D.N.Y.July 15, 2016).To the extent relevant here, pursuant to a Sale Order entered on or about July 10, 2009, New GM emerged from the bankruptcy of General Motors Corporation("Old GM") as the operative GM business entity and the largest car manufacturer in the world.(Docket No. 3356("FACC")¶¶ 291, 336, 873).Prior to the bankruptcy, however, Old GM personnel learned of a defect with the ignition switches in certain car models that allowed them to move from the "run" to the "off" or "accessory" positions too easily.SeeIn re Gen. Motors , 2016 WL 3920353, at *3.New GM opened several investigations into incidents—including fatal crashes—involving the defective ignition switch, but ultimately did not recall any vehicles until February 2014.Seeid. at *4.Thereafter, between 2014 and 2015, New GM issued more than eighty-four recalls relating to more than seventy defects and affecting over twenty-seven million GM cars.Id.
On June 12, 2014, the Judicial Panel on Multidistrict Litigation transferred to this Court fifteen actions relating to the alleged ignition switch defect for "coordinated or consolidated pretrial proceedings" pursuant to Title 28, United States Code, Section 1407.(DocketNo. 1).The MDL has since grown to hundreds of cases(comprised of several thousand individual claims), with new cases transferred to, or filed directly with, the Court every month.Broadly speaking, the Court and the parties have divided the cases into two categories: personal injury and wrongful death claims, on the one hand, and economic loss claims, on the other.(SeeDocketNo. 215).With respect to the latter, at issue here, the Court ordered Plaintiffs to proceed by submitting a "master" consolidated complaint that would supersede individual complaints, at least for purposes of pretrial proceedings (including motion practice).SeeIn re Gen. Motors,2016 WL 3920353, at *5;In re General Motors LLC Ignition Switch Litig. , No. 14-MD-2543 (JMF), 2015 WL 3619584, at *10(S.D.N.Y.June 10, 2015).
Plaintiffs did so, and later amended the consolidated complaint twice.On February 24, 2016, New GM filed a partial motion to dismiss the then-operative TACC.(Docket No. 2356).In an opinion entered on July 15, 2016, the Court granted New GM's motion in part and denied it in part.SeeIn re Gen. Motors,2016 WL 3920353.In particular, the Court dismissed Plaintiffs' claims under the federal Racketeer Influenced and Corrupt Organization ("RICO")Act, 18 U.S.C. § 1961, et seq. , and rejected Plaintiff's broadest theory of damages, which it called the "brand devaluation theory."Seeid. at *7–18.The Court characterized the "brand devaluation theory" of damages as "unprecedented and unsound," after finding that "persuasive precedent interpreting consumer protection law and general principles of tort recovery" precluded it from being a basis for recovery.Id. at *2, 42.The Court also considered Plaintiffs' claims under the laws of eight different states, upholding the majority of Plaintiffs' consumer fraud, common law fraud, and implied warranty claims while dismissing the bulk of their unjust enrichment and negligence claims.Seeid. at *18–42.
On September 15, 2016, Plaintiffs filed the FACC at issue here.The FACC asserts claims on behalf of a class of millions of Old GM and New GM vehicle owners whose vehicles were affected by various alleged defects and recalls.(SeeFACC 2–4).The FACC defines the plaintiff class as "[a]ll persons who bought or leased (i) a Delta Ignition Switch Vehicle on or before February 14, 2014; (ii) a Low Torque Ignition Switch Vehicle prior to July 3, 2014; (iii) a Knee-to-Key Camaro Defect Vehicle prior to July 3, 2014; (iv) a Side Airbag Defect Vehicle prior to March 17, 2014; and/or (...
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