In re: General Motors LLC Ignition Switch Litigation, 1:14-mc-02543

Background

Old GM filed Chapter 11 in 2009 and sold most assets to a new, Treasury‑sponsored entity (New GM) pursuant to a Section 363 Sale Order that transferred assets "free and clear" of most successor/transferee claims; Old GM (renamed MLC) retained certain assets and liabilities and later dissolved.
Plaintiffs are owners/lessors of pre‑Sale "Delta Ignition Switch" vehicles who assert economic‑loss successor liability claims against New GM for defects in vehicles made by Old GM; claims are pled under the laws of all 50 states + D.C.; this motion targets Plaintiffs from 16 jurisdictions.
The Second Circuit held that many ignition‑switch claimants were denied constitutionally adequate notice in the bankruptcy and vacated the injunction that had barred those claims, permitting those plaintiffs to sue New GM (In Matter of Motors Liquidation Co.).
New GM moved for partial summary judgment arguing (1) successor claims were estate property barred by the bankruptcy (relying on In re Tronox), and (2) alternatively that applicable non‑bankruptcy state law forecloses successor liability; the court rejected the Tronox‑as‑bar argument for these plaintiffs because they lacked adequate notice in the bankruptcy.
The Court held that choice‑of‑law must be resolved jurisdiction‑by‑jurisdiction (not by a single federal rule or by treating the MDL master complaint as controlling) and, after a state‑by‑state analysis, concluded Delaware law governs in seven of the sixteen jurisdictions (CA, D.C., FL, LA, MA, NY, WI).
Applying Delaware law, the Court found the mere‑continuation successor‑liability exception narrowly cabined and that New GM is not a mere continuation of Old GM (arm’s‑length sale, Old GM/MLC coexisted post‑sale, no continuity of ownership/control), so summary judgment for New GM is granted in those seven jurisdictions; judgment reserved for the other nine pending additional briefing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Plaintiffs’ successor claims barred as bankruptcy‑estate property by Tronox and the Sale Order?	Plaintiffs: Not barred — they did not know of the claims pre‑bankruptcy because Old GM denied them constitutionally adequate notice.	New GM: Tronox holds successor/alter‑ego claims are estate property and thus barred by the Sale Order.	Held: Tronox does not bar these plaintiffs because lack of adequate notice means their claims were not effectively extinguished by the sale.
Which choice‑of‑law rules govern successor liability in this MDL?	Plaintiffs: Apply each plaintiff’s home state choice‑of‑law rules (jurisdiction‑by‑jurisdiction).	New GM: Federal choice‑of‑law or New York rules should apply to produce uniform law (favoring Delaware/New York).	Held: Apply choice‑of‑law rules of each plaintiff’s originating jurisdiction (MDL master complaint does not fix substantive choice‑of‑law).
What substantive law applies in each targeted jurisdiction?	Plaintiffs: Many jurisdictions’ laws (often Michigan or forum law) should apply.	New GM: Delaware (state of incorporation) or New York (sale negotiation situs) should govern successor issues.	Held: After analysis, Delaware law governs in CA, D.C., FL, LA, MA, NY, and WI; other states governed as listed by the Court and subject to further merits briefing.
Under Delaware law, can Plaintiffs proceed on mere‑continuation or de facto‑merger theories?	Plaintiffs: New GM is the functional continuation/reincarnation of Old GM; successor liability should apply.	New GM: Delaware law narrowly construes exceptions; sale was arm’s‑length, Old GM persisted for years, and New GM is not the same legal person.	Held: Under Delaware law mere‑continuation/de facto‑merger exceptions are narrowly applied and fail on these facts; successor claims dismissed in the seven Delaware‑governed jurisdictions.

Key Cases Cited

In Matter of Motors Liquidation Co., 829 F.3d 135 (2d Cir. 2016) (vacated injunction and held claimants deprived of due process could pursue successor claims against New GM)
In re Tronox Inc., 855 F.3d 84 (2d Cir. 2017) (held certain successor/alter‑ego claims were estate property where claimants knew of claims pre‑bankruptcy)
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal courts in diversity must apply choice‑of‑law rules of the forum state)
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938) (no federal general common law; substantive law is state law)
Atherton v. F.D.I.C., 519 U.S. 213 (1997) (federal choice‑of‑law rules apply only where significant federal interest conflicts with state law)
In re Gaston & Snow, 243 F.3d 599 (2d Cir. 2001) (federal interest in bankruptcy alone does not displace state choice‑of‑law rules)