In re Gen. Motors LLC
| Decision Date | 12 September 2018 |
| Docket Number | 14-MD-2543 (JMF),14-MC-2543 (JMF) |
| Citation | 339 F.Supp.3d 262 |
| 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 |
INTRODUCTION... 274
LEGAL STANDARDS... 275
DISCUSSION... 275
CONCLUSION... 342
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 Fifth Amended Consolidated Complaint or "5ACC" (Docket No. 4838) — exceeds 1700 pages and 7400 paragraphs, and includes claims relating to the ignition-switch defect and various other alleged defects 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 and Order filed on July 15, 2016, with respect to the then-operative Third Amended Consolidated Complaint ("TACC"), the Court ruled on the validity of Plaintiffs' claims in eight jurisdictions. See In re Gen. Motors LLC Ignition Switch Litig. , No. 14-MD-2543 (JMF), 2016 WL 3920353 at *36 (S.D.N.Y. July 15, 2016) (" TACC Op. "). A little less than one year later, the Court issued another Opinion and Order (later modified), with respect to the then-operative Fourth Amended Consolidated Complaint ("FACC"), addressing the validity of Plaintiffs' claims in another eight jurisdictions. See In re Gen. Motors LLC Ignition Switch Litig. , 257 F.Supp.3d 372, 423 (S.D.N.Y. 2017) (" FACC Op. "), modified on reconsideration , No. 14-MC-2543 (JMF), 2017 WL 3443623 (S.D.N.Y. Aug. 9, 2017) (" FACC Supp. Op. "). Plaintiffs later filed the Fifth Amended Consolidated Complaint.
In MDL Order No. 131, entered on August 30, 2017, the Court directed the parties to "meet and confer regarding the application of the Court's prior motion to dismiss opinions on the issues of (i) unjust enrichment, (ii) incidental damages, and (iii) manifest defect" to the jurisdictions that had not been the subject of prior rulings by the Court — a total of thirty-five jurisdictions for the issues of unjust enrichment and manifest defect and forty-seven jurisdictions for the issue of incidental damages. (Docket No. 4499, ¶ 4). That process yielded agreement, and a stipulation (Docket No. 5099 ("Parties' Stipulation") ), with respect to application of the Court's prior opinions to some issues in some of the remaining jurisdictions — albeit many fewer issues in many fewer jurisdictions than the Court had hoped. Thereafter, the parties submitted lengthy briefs addressing the disputes that remained: (1) whether "manifest defect" is required for Plaintiffs to recover for their economic losses under the laws of twenty-seven jurisdictions ; (2) whether Plaintiffs can recover damages for their "lost time" (for example, time lost in repairing their vehicles) under the laws of forty-seven jurisdictions ; and (3) whether the existence of a contract or an adequate legal remedy bars Plaintiffs' unjust enrichment claims under the laws of ten jurisdictions. (Docket Nos. 5098, 5101, 5191, 5192).
In this Opinion and Order, the Court resolves those disputes — no easy task given the sheer number of issues and jurisdictions in dispute, the fact that the relevant law in many of jurisdictions is unsettled or in conflict, and because "subtle differences in state law can dictate different results for plaintiffs in different jurisdictions." TACC Op. , 2016 WL 3920353 at *18. Nevertheless, for the reasons that follow, the Court concludes that manifestation is not required for any of claims and jurisdictions that remain in dispute; that, in all but a few of the jurisdictions that remain in dispute, Plaintiffs cannot recover for lost "free" or "personal" time, but can recover for lost time in the form of lost earnings or wages; and that Plaintiffs in most of the jurisdictions in dispute cannot bring unjust enrichment claims where the subject matter is covered by a valid and enforceable contract or there is an adequate remedy at law.
In applying the law of a 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, 61 S.Ct. 179, 85 L.Ed. 139 (1940) ; accord Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co. , ––– U.S. ––––, 138 S.Ct. 1865, 1874, 201 L.Ed.2d 225 (2018) . "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, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967) ). Nevertheless, 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, 87 S.Ct. 1776 . 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., State of La. , 47 F.3d 79, 82 (2d Cir. 1995) (internal quotation marks and alterations omitted).
As noted, the parties have briefed application of the Court's prior Opinions on the issues of (1) manifestation; (2) incidental damages (i.e., lost time); and (3) unjust enrichment to the jurisdictions that have not been the subject of prior motion practice and that remain in dispute. The Court will address each of those issues in turn.
Putative class actions "alleging neither personal injury nor property damages, but economic loss stemming from purchase of a product" with an unmanifested defect have become increasingly common in the automotive, pharmaceutical, and other industries. 1 McLaughlin on Class Actions § 5:56 (14th ed.). In its previous Opinions, the Court resolved the question of whether Plaintiffs could pursue economic loss claims for defects if those defects never manifested themselves under the laws of sixteen jurisdictions. In its Opinion resolving New GM's motion to dismiss the Fourth Amended Consolidated Complaint, the Court also signaled its agreement with a prominent treatise that the "majority view is that there is no legally cognizable injury in a product defect case, regardless of whether the claim is for fraud, violation of consumer protection statutes, breach of warranty, or any other theory,...
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