IN RE: GENERAL MOTORS LLC IGNITION SWITCH LITIGATION
14-MD-2543 (JMF)
14-MC-2543 (JMF)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
This Document Relates To All Actions
JESSE M. FURMAN, United States District Judge:
[Regarding New GM‘s Motion for Summary Judgment as to the Bellwether Economic Loss Plaintiffs’ Claims for Benefit-of-the-Bargain Damages]
In February 2014, General Motors LLC (“New GM“) announced the recall of certain General Motors vehicles that had been manufactured with a defective ignition switch — a switch that moved too easily from the “run” position to the “accessory” and “off” positions, causing moving stalls and disabling critical safety systems. In the months that followed, New GM recalled millions of other vehicles, some for reasons relating to the ignition switch and some for other reasons. Not surprisingly, litigation followed, and was ultimately consolidated in this Court by the Judicial Panel on Multidistrict Litigation. Thousands of plaintiffs filed personal injury and wrongful death claims against New GM. And more relevant for present purposes, hundreds of plaintiffs (“Plaintiffs“) brought claims on behalf of a broad putative class of GM car owners and lessors whose vehicles
Over the last few years, the Court has issued a handful of lengthy rulings on the viability of Plaintiffs’ claims under federal law and the laws of various jurisdictions. See, e.g., In re Gen. Motors LLC Ignition Switch Litig., 339 F. Supp. 3d 262 (S.D.N.Y. 2018); In re Gen. Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), 2017 WL 3382071 (S.D.N.Y. Aug. 3, 2017); In re Gen. Motors LLC Ignition Switch Litig. (“4ACC Op.“), 257 F. Supp. 3d 372, 392-94 (S.D.N.Y. 2017); In re Gen. Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), 2017 WL 6509256 (S.D.N.Y. Dec. 19, 2017); In re Gen. Motors LLC Ignition Switch Litig. (“3ACC Op.“), No. 14-MD-2543 (JMF), 2016 WL 3920353 (S.D.N.Y. July 15, 2016). Following those rulings, 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 (“Order No. 131“), at 2; ECF No. 4521. Thereafter, the parties filed a wide array of motions relating to Plaintiffs in these Bellwether States. Plaintiffs filed a motion to certify classes in each Bellwether State pursuant to
In this Opinion, the Court resolves portions of New GM‘s motion for summary judgment. In doing so, the Court addresses two related questions that have yet to be resolved in the context of a mature factual record: the proper measure of damages under Plaintiffs’ “benefit-of-the-bargain” damages theory and — although it does not ultimately affect the damages claims adjudicated in this Opinion — whether and how evidence that New GM repaired Plaintiffs’ vehicles through its many recalls would be relevant to the calculation of such damages. The Court reaches several significant conclusions. First, the Court holds 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. Second, that 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. And third, whether or not Plaintiffs’ claims for “cost-of-repair” damages could survive New GM‘s motion, the Court is compelled to conclude that their claims for “difference-in-value” damages cannot because Plaintiffs have failed to introduce any evidence of the fair market value of the allegedly defective vehicles they actually purchased and, therefore, have failed to create a triable issue of fact on an essential element of any such claim.1
Broadly speaking, Plaintiffs have sought relief in this litigation for economic losses pursuant to two theories of injury. One theory, the so-called “brand devaluation” theory, “assume[d] that when a consumer purchases a car, the purchase comes not only with a promise . . . that the car does not contain any safety defects, but also with the promise that the manufacturer of the car has, and will maintain, a particular reputation for making safe and reliable cars separate and apart from the car purchased by the consumer at issue.” 3ACC Op., 2016 WL 3920353, at *7. On that theory, Plaintiffs “thought they were buying cars made by a brand that had a reputation for producing safe and reliable cars, that brand turned out not to be what consumers thought it was . . . , and when the revelations about defects and corporate culture became public the brand was tarnished, resulting in lower resale values across the board for the brand‘s product.” Id. (internal quotation marks omitted). Plaintiffs thus sought damages measured according to the diminution in their cars’ “resale value and the [New GM] brand‘s continuing good name.” Id. (emphasis omitted). The Court rejected the “brand devaluation” theory wholesale in deciding New GM‘s motion to dismiss the Third Amended Consolidated Complaint. Id. at *9-10.
The Plaintiffs’ second theory of injury is the by-now-familiar “benefit-of-the-bargain” theory, which recognizes that “because a car with a safety defect is worth less than a car without a safety defect,” a plaintiff who bargains for a defect-free car is injured when she receives a defective one instead. Id. at *7. The Court has addressed that theory repeatedly throughout this litigation. In ruling on New GM‘s motion to dismiss the Third Amended Consolidated Complaint, for example, the Court upheld the theory in the abstract — rejecting New GM‘s arguments “that the benefit-of-the-bargain defect theory fails across the board” and holding that “the viability of the benefit-of-the-bargain defect theory must be analyzed with respect to each Plaintiff‘s claims under the relevant jurisdiction‘s law.” Id. at *10. More specifically, the Court has held that Plaintiffs’ claims predicated on the theory were sufficient to survive motions to dismiss under the laws of several jurisdictions, including the Bellwether States. See 4ACC Op., 257 F. Supp. 3d at 445-55 (Texas); 3ACC Op., 2016 WL 3920353, at *19-24 (California); id. at *32-35 (Missouri). But Plaintiffs’ second theory has yet to be tested on a mature factual record. In 2017, New GM moved for summary judgment on Plaintiffs’ economic-loss claims in sixteen jurisdictions, including the Bellwether States, arguing that Plaintiffs received the benefit of their bargain when New GM repaired any defects through a series of recalls. See ECF No. 4681. In April 2018, the Court denied that motion without prejudice, deferring summary judgment practice in each of the Bellwether States until after the close of expert discovery on the grounds that it was likely “evidence of post-sale mitigation would affect the availability or calculation of damages in the sixteen jurisdictions [then] at issue” and that “the viability of Plaintiffs’ claims for benefit-of-the-bargain damages [could] turn on the question of whether New GM actually fixed the defects at issue in its many recalls.” In re Gen. Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), 2018 WL 1638096, at *2 (S.D.N.Y. Apr. 3, 2018).
With discovery now complete with respect to those claims, New GM renews its attempt to win summary judgment, this
LEGAL STANDARDS
A. Summary Judgment
Summary judgment is appropriate where the admissible evidence and pleadings demonstrate “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
B. Applying State Law in Diversity Actions
There is no dispute that, in assessing the Bellwether States’ Plaintiffs’ claims, “[t]he Court is bound to apply [each state‘s] law to Plaintiffs’ state-law claims.” 3ACC Op., 2016 WL 3920353, at *10. As the Court has observed before, see In re Gen. Motors LLC Ignition Switch Litig., 339 F. Supp. 3d at 275, in applying the law of a given 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 (1940); accord Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 138 S. Ct. 1865, 1874 (2018) (“If the relevant state law is established by a decision of the State‘s highest court, that decision is binding on the federal courts.” (internal quotation marks omitted)). “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 (1967)). To be sure, 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 (“[I]n diversity cases . . . while the decrees of lower state courts should be attributed some weight[,] the decision is not controlling where the highest court of the State has not spoken on the point.” (internal quotation marks and alterations omitted)). But the decision of an “intermediate appellate state court” is “datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.” West, 311 U.S. at 237. 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., 47 F.3d 79, 82 (2d Cir. 1995) (internal quotation marks and alterations omitted).
DISCUSSION
New GM seeks summary judgment on various grounds, including Plaintiffs’ failure to produce evidence of damages. In reviewing New GM‘s arguments, the Court begins, as it must, with the substantive law that governs Plaintiffs’ damages theories in each of the Bellwether States. As the Court will explain, each Bellwether State measures benefit-of-the-bargain damages in cases like this one as the lesser of the cost to repair the defective vehicle or the difference in market value between the vehicle as bargained for and the vehicle as it was actually sold. Further, each Bellwether State defines market value in
A. The Benefit-of-the-Bargain Damages Theory
As its name suggests, the benefit-of-the-bargain theory seeks to compensate a plaintiff who did not get what she bargained for. Thus, as this Court has recognized — albeit in discussing the viability of Plaintiffs’ now-dismissed civil RICO claims — the benefit-of-the-bargain theory is merely a species of expectation damages. See 3ACC Op., 2016 WL 3920353, at *16-17; see generally Restatement (Second) of Contracts § 344 (1981) (noting that a promisee‘s “‘expectation interest’ . . . is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed“). Far from an exotic theory of damages, therefore, the benefit-of-the-bargain theory is “traditionally the core concern of contract law.” E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 870 (1986). “Contract damages,” after all, “are ordinarily based on the injured party‘s expectation interest and are intended to give him the benefit of his bargain by awarding him a sum of money that will, to the extent possible, put him in as good a position as he would have been in had the contract been performed.” Restatement (Second) of Contracts § 347 cmt. a; see also id. § 344.3
As illustrated by this case — and others involving allegedly tortious misrepresentations — the benefit-of-the-bargain theory is not limited to the contract realm. Although some of Plaintiffs’ claims sound in contract, others sound in tort or restitution, and as to them, too, Plaintiffs seek “the difference between the actual value of the car and the value the car would have had if the representation had been true.” ECF No. 6059 (“Pls.’ SJ Opp‘n“), at 30 (quoting Auffenberg v. Hafley, 457 S.W.2d 929, 937 (Mo. Ct. App. 1970)). Thus — as Plaintiffs agree — where the benefit-of-the-bargain theory applies in a tort case, it compensates an injured plaintiff in the same way and according to the same theory as in a contract case: benefit-of-the-bargain damages “mean[] recovery of what the fraudster promised, as opposed to the property the victim lost,” In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 122 (2d Cir. 2013) (emphasis added), and measure the value of what was promised
The Court has analyzed the benefit-of-the-bargain theory in broad strokes several times before now. See, e.g., In re Gen. Motors LLC Ignition Switch Litig., 2018 WL 1638096, at *1-2; 3ACC Op., 2016 WL 3920353, at *10; see also In re Gen. Motors LLC Ignition Switch Litig., 339 F. Supp. 3d 262 (discussing the theory‘s viability in other jurisdictions). As the Court has explained, the benefit-of-the-bargain theory “measures the difference in value between the defective car the consumer received and the defect-free car the consumer thought she was getting (and for which she paid).” 3ACC Op., 2016 WL 3920353, at *30.4 But the Court has not yet expressed a view on how benefit-of-the-bargain damages should be measured except to say that they are to be measured at the time of sale. See, e.g., 4ACC Op., 257 F. Supp. 3d at 401; 3ACC Op., 2016 WL 3920353, at *10. Moreover, the Court has explicitly left open “the question of whether and to what extent evidence of post-sale mitigation” — that is, the effectiveness of New GM‘s recalls (or lack thereof) — “would affect the availability or calculation of [benefit-of-the-bargain] damages” in the Bellwether States and other jurisdictions. In re Gen. Motors LLC Ignition Switch Litig., 2018 WL 1638096, at *2.5 Both issues — how to calculate benefit-of-the-bargain damages and the relevance, if any, of post-sale mitigation — are matters of substantive state law. To answer them for purposes of this Opinion and Order, therefore, the Court must delve into the substantive law of California, Missouri, and Texas. As the following discussion makes clear, such analysis yields two principal conclusions: first, that the proper measure of benefit-of-the-bargain damages in each state is the difference in market value between Plaintiffs’ cars as warranted and as sold; and, second, that a plaintiff‘s duty to avoid or mitigate damages means that post-sale repairs are relevant to the calculation of
1. California
The Court begins with California. Under California law, Plaintiffs seek monetary awards for five causes of action: pursuant to California‘s Unfair Competition Law (“UCL“),
the defendant unlawfully acquired from the plaintiff and, at least under certain circumstances, to deter future violations (through restitution). Colgan, 38 Cal Rptr. 3d at 59.
Where benefit-of-the-bargain damages are available under California law, they compensate for “the difference between the actual value of what plaintiff has received and that which he expected to receive.” Overgaard v. Johnson, 137 Cal. Rptr. 412, 413 (Cal. Ct. App. 1977). By contrast, where California law limits recovery to “out of pocket” losses, as it does with fraud claims generally, such damages are measured according to “the difference between the actual value received and the actual value conveyed.” Id. If a defrauded plaintiff has conveyed value in excess of what she received in the transaction, out-of-pocket (or restitutionary) damages will seek to “restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.” Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 947 (Cal. 2003). Thus, for purposes of this motion in this litigation, the “out-of-pocket” and “benefit-of-the-bargain” measures of damages overlap; in
That, in turn, means that each of Plaintiffs’ California claims depends on calculating the market value of the allegedly defective cars that Plaintiffs purchased. As the California Supreme Court (that is, California‘s highest court) has observed, “‘value,’ in connection with legal problems, ordinarily means market value.” Bagdasarian v. Gragnon, 192 P.2d 935, 940 (Cal. 1948).7 Accordingly, in awarding both benefit-of-the-bargain and out-of-pocket (or
restitutionary) damages, courts applying California law look to the fair market value of the goods and services at issue: both the goods as bargained for (or as represented), and the goods as actually sold. See, e.g., Zakaria v. Gerber Prods. Co., No. LA-CV-15-200 (JAK), 2017 WL 9512587, at *20 (C.D. Cal. Aug. 9, 2017) (holding that actual damages under the CLRA depends on actual market values), aff‘d, 755 Fed. App‘x 623 (9th Cir. 2018); Werdebaugh v. Blue Diamond Growers, No. 12-CV-02724 (LHK), 2014 WL 7148923, at *8 (N.D. Cal. Dec. 15, 2014) (holding that restitutionary awards under the UCL and CLRA are “determined by taking the difference between the market price actually paid by consumers and the true market price that reflects the impact of the unlawful, unfair, or fraudulent business practices“); Lanovaz v. Twinings N. Am., Inc., No. C-12-02646 (RMW), 2014 WL 1652338, at *6 (N.D. Cal. Apr. 24, 2014) (same); Guido v. L‘Oreal, USA, Inc., No. CV-11-1067 (CAS), 2013 WL 3353857, at *14 (C.D. Cal. July 1, 2013) (holding that damages for breach of an implied warranty under the SBA restore “the monetary equivalent of the benefit of [the plaintiff‘s] bargain” by reference to the “true market value” of what a plaintiff “actually received“).
In reaching this conclusion, the Court is mindful of the Ninth Circuit‘s contrary conclusion that “UCL . . . restitution is based on what a purchaser would have paid at the time of purchase had the purchaser received all the information.” Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 989 (9th Cir. 2015). Pulaski, however, appears to overread the California Supreme Court case on which it relies. In Kwikset Corp. v. Superior Ct. of Orange Cty., 246 P.3d 877 (Cal. 2011), the California Supreme Court held only that a plaintiff satisfies the UCL‘s standing requirement “by alleging[] . . . that he or she would not have bought the product but for the misrepresentation” at issue, id. at 890. Such an allegation permits the reasonable inference that “because of the misrepresentation the consumer (allegedly) was made to part with more money than he or she otherwise would have been willing to expend,
California law also recognizes the relevance of post-sale mitigation — such as New GM‘s recall repairs — to the calculation of a monetary award under any of Plaintiffs’ theories. “The doctrine of mitigation of damages holds that a plaintiff who suffers damage as a result of either a breach of contract or a tort has a duty to take reasonable steps to mitigate those damages and will not be able to recover for any losses which could have been thus avoided.” Valle de Oro Bank N.A. v. Gamboa, 32 Cal. Rptr. 2d 329, 331 (Cal. Ct. App. 1994) (alteration and internal quotation marks omitted); see Restatement (Second) of Contracts § 350 (1981) (“[D]amages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation.“); accord 6 Witkin Summary of Cal. Law – Torts § 1803 (11th ed. 2017). Thus, a “defendant‘s mitigation of an injury may leave the plaintiff ‘unable to prove a right to . . . restitution” or damages. In re Myford Touch Consumer Litig., No. 13-CV-03072 (EMC), 2016 WL 7734558, at *19 (N.D. Cal. Sept. 14, 2016) (quoting Clayworth v. Pfizer, Inc., 233 P.3d 1066, 1087 (Cal. 2010), and citing Restatement (Second) of Contracts § 350), reconsideration granted on other grounds, 2016 WL 6873453 (N.D. Cal. Nov. 22, 2016). For similar reasons, California courts have also followed the traditional rule that the measure of damages for tortious injury to personal property — such as an automobile — is the lesser of the diminution in value or the reasonable cost of repairs. See, e.g., Hand Elecs., Inc. v. Snowline Joint Unified Sch. Dist., 26 Cal. Rptr. 2d 446, 450-51 (Cal. Ct. App. 1994); Safeco Ins. Co. v. J & D Painting, 21 Cal. Rptr. 2d 903, 904 (Cal. Ct. App. 1993); see also, e.g., Olds & Stoller v. Seifert, 254 P. 289, 290 (Cal. Ct. App. 1927); Menefee v. Raisch Improvement Co., 248 P. 1031, 1032 (Cal. Ct. App. 1926).
Recent cases applying California law have held that the cost of repair is an
2. Missouri
The Court turns, then, to Missouri. The Court has previously held — although it described the issue as “a close one” — that “Missouri law recognizes the benefit-of-the-bargain defect theory” for claims sounding in contract and tort. 3ACC Op., 2016 WL 3920353, at *34. As for the proper measure of such damages, which the Court has not yet had occasion to address, Missouri law recognizes the traditional rule that contract damages should place an injured party, “as far as it is possible to do so by a monetary award, . . . in the position he would have been in had the contract been performed.” Boten v. Brecklein, 452 S.W.2d 86, 93 (Mo. 1970) (internal quotation marks omitted); see id. (noting that the injured party “is entitled
As in the other two Bellwether States, when Missouri law is concerned with “value” as a measure of damages, value refers to market value. See Larabee v. Eichler, 271 S.W.3d 542, 548 (Mo. 2008) (en banc) (“[The] ‘benefit of the bargain’ rule[] . . . states the appropriate measure for damages in a fraudulent misrepresentation case is the difference between the fair market value of the property received and the value if the property had been as represented.“). Indeed, a long line of Missouri cases equate “actual value” with “market value.” See, e.g., Metro. St. Ry. Co. v. Walsh, 94 S.W. 860, 868 (Mo. 1906) (“[T]he market value of the property means its actual value, . . . that is, the fair value of the property as between one who wants to purchase and one who wants to sell it; not what could be obtained for it in peculiar circumstances when greater than its fair price could be obtained; nor its speculative value; nor the value obtained through the necessities of another. . . . The question is if the defendant wanted to sell its property, what could be obtained for it upon the market from parties who wanted to buy and would give its full value.” (internal quotation marks omitted)). Testimony regarding the subjective, or private,
value of property to its owner does not suffice. See, e.g., St. Louis, Keokuk & Nw. R.R. Co. v. St. Louis Union Stock-Yard Co., 25 S.W. 399, 400 (Mo. 1894) (distinguishing between the “opinion of [a] witness as to the value of the property to the owner, and [the property‘s] market value,” where “[i]t was the market value that was the question of inquiry and consideration“); Evinger v. McDaniel Title Co., 726 S.W.2d 468, 474-75 (Mo. Ct. App. 1987) (“Proof of fair market value cannot be supplied by evidence as to the value of the property to the plaintiff individually, as a witness‘[s] subjective opinion or his feeling or guess as to the value of property may not be equated with or substituted for fair market value.“).
Additionally, upon reviewing the relevant authorities, the Court concludes that Missouri law also treats evidence of New GM‘s post-sale repairs as
in a workmanlike manner.” (internal quotation marks omitted)). Missouri courts also recognize that, in cases of “slight injury” to property, “the cost of repair logically reflects the amount the property was reduced in value.” Kaplan, 166 S.W.3d at 72 (emphasis and internal quotation marks omitted). And, generally, the “cost of repairs” is “competent evidence to be considered in determining the damage suffered,” Tull v. Hous. Auth. of Columbia, 691 S.W.2d 940, 943 (Mo. Ct. App. 1985); see also Conner v. Aalco Moving & Storage Co., 218 S.W.2d 830, 832 (Mo. Ct. App. 1949), and may be the basis for a damages award where there is no evidence of fair market value, see Tull, 691 S.W.2d at 942. “While diminished value is the preferred measure of damages in tort cases because it restores plaintiffs to the positions they were in had the tort not been committed, the particular facts of each case determine which measure is appropriate.” Kaplan, 166 S.W.3d at 72; see also Clayton Ctr. Assocs. v. Schindler Haughton Elevator Corp., 731 F.2d 536, 540 (8th Cir. 1984) (noting that where Missouri law‘s “goal in awarding damages is to give the injured party the benefit of its bargain, . . . . [t]wo alternative measures of damages are used to achieve this goal” in repair contract cases: either “the cost of repair or completion of the contract work, or the diminution in value . . . caused by the breach . . . . [T]he particular facts of each case seem to govern which measure of damages is appropriate.“).
Indeed, in cases with facts similar to this one, Missouri courts uniformly treat the costs of repair as relevant to damages even where damages are based on the difference in value before and after the harm. See, e.g., Wright v. Edison, 619 S.W.2d 797, 801 (Mo. Ct. App. 1981) (“Where repairs to personal property such as an automobile result in causing it to be more valuable than it was before the injury, such excess must be deducted from the cost of repairs. On the other hand[,] if the item after repairs are made is still not as valuable as it was before the injury, then the owner may recover in addition to the cost of repairs such amount as will equal the difference between the value of the item of personal property before the injury and after the repairs were made upon it.” (citation omitted)); accord Hayes v. Dalton, 257 S.W.2d 198, 201 (Mo. Ct. App. 1953); Conner, 218 S.W.2d at 832 (Mo. App. 1949); see also Cline v. City of St. Joseph, 245 S.W.2d 695, 702 (Mo. Ct. App. 1952) (“As a general rule there can be no recovery for losses which might have been
Sure enough, in recent years, Missouri courts have tacked towards the view that while “the measure of damage to an automobile is [generally] the decrease in its fair market value after the accident, . . . if [the automobile] can be repaired to its prior state, the cost of repair is a measure of damages.” Shapiro v. Kravitz, 754 S.W.2d 44, 45 (Mo. Ct. App. 1988) (citations omitted). Thus, Missouri‘s intermediate appellate court has held that “[c]ompensatory damages in a fraud action where the defrauded party retains the property are limited to the benefit of the bargain from the sales transaction,” meaning that where “awarding the cost of repair would . . . give [the plaintiff] the benefit of her bargain,” it is “unnecessary to award damages measured by the diminution in value of her property.” Brown v. Bennett, 136 S.W.3d 552, 557 (Mo. Ct. App. 2004). Similarly, in Farning v. Brendal, 150 S.W.3d 384, 386 (Mo. Ct. App. 2004), a breach of warranty case, the Missouri Court of Appeals held that “the cost of repair was less than the diminution in value and was, therefore, the correct measure of damages,” because “the goal in awarding damages is to make an award that will put the non-breaching party in as good a position as he would have been in if the contract had been performed,” and an award of difference-in-value damages “put the [plaintiffs] in a better position than they would have been in had the [defendants] installed the flooring as warranted,” thereby “giving the [plaintiffs] a windfall by giving them new flooring at no cost.” Indeed, in ordinary contract cases, Missouri law‘s concern with avoiding wasteful remedies promotes a rule measuring damages according to the cost of repair or replacement except where those costs are “disproportionate” to the diminution in value. Stom v. St. Clair Corp., 153 S.W.3d 360, 364 (Mo. Ct. App. 2005). Based on its review of Missouri authorities, the Court therefore concludes that where Missouri law seeks to restore the benefit of a plaintiff‘s bargain in cases most analogous to this one, it generally awards the lesser of the cost of repair or the diminution in market value caused by the fraud or breach.
3. Texas
That leaves Texas. “The general principle governing damages for breach of contract” in Texas “is that the complaining party is entitled to recover the amount necessary to put him in as good a position as if the contract had been performed” — i.e., the benefit-of-the-bargain rule. Smith v. Kinslow, 598 S.W.2d 910, 912 (Tex. Civ. App. 1980). Similarly, “[t]he actual damages to which a plaintiff is entitled in” a case under the Texas Deceptive Trade Practices Act (“TDPTA“),
Similarly, like Missouri and California, Texas takes the cost of repairs (and the fact of repairs already performed) into account when calculating how far of his or her bargain a plaintiff has been kept short. As Texas‘s intermediate civil appellate court has held, in an automotive defect case, “[i]f the cost of repairing the vehicle [is] more than the loss in its fair market value, then the loss in fair market value [is] the measure of damage. If the car [is] subject to repair, and the cost of its repair [is] less than the loss in fair market value, then the cost-of-repair measure of damages [is] applicable.” Orr Chevrolet, Inc. v. Courtney, 488 S.W.2d 883, 886 (Tex. Civ. App. 1972). More recently, a California federal court applying Texas law held that because the defendant had already repaired the defects in the plaintiff‘s truck, the plaintiff was “already in essentially the same position he would have been in had Defendant sold him a non-defective truck.” Sater v. Chrysler Grp. LLC, No. ED CV 14-700 (VAP), 2016 WL 7377126, at *7 (C.D. Cal. Oct. 25, 2016). “Permitting [the plaintiff] to retain benefit-of-the-bargain damages for the difference in value between a non-defective truck and the defective truck” in that circumstance, “even though Defendant has repaired his truck, would afford him precisely the type of double-recovery windfall Texas courts have held is impermissible.” Id.9
In short, based on the available Texas authorities, the Court is persuaded that Texas law measures benefit-of-the-bargain damages in cases like this one according to the lesser of (1) the cost of
4. Conclusion
In sum, the Court concludes that in all three of the Bellwether States the proper measure of benefit-of-the-bargain damages is generally the lower of (1) the cost of repair or (2) the difference between the fair market value of the vehicle as warranted and the fair market value of the vehicle as sold, reduced according to Plaintiffs’ ability to mitigate or avoid damages. That is the difference between what Plaintiffs bargained for (namely, cars free of safety defects) and what they got (namely, cars with one or more defects) — which is what the benefit-of-the-bargain theory seeks to measure. That is not to say that Plaintiffs are wrong in arguing, or that the Court was wrong in previously noting, see 4ACC Op., 257 F. Supp. 3d at 401; 3ACC Op., 2016 WL 3920353, at *10, that benefit-of-the-bargain damages must be measured at the time of sale. That, after all, is when the “bargain” was made, and the theory measures damages according to the bargain that was struck. But it does not follow — and it is not the law, at least in the Bellwether States — that all post-sale conduct is irrelevant. To hold otherwise would confer on Plaintiffs, and any other plaintiffs who claim similar injuries, an immutable damages asset, redeemable upon sufficient proof regardless of any mitigated harm.10 In any event, the Court is bound to apply the law as it actually exists in each Bellwether State, each of which has, through its courts or otherwise, chosen not to embrace that type of remedy. Moreover, the Bellwether States have done so for defensible reasons: From a contract perspective, “efficiency requires that a disappointed promisee use his remedy to vindicate his expectation interest in the cheapest possible way, rather than proceeding wastefully. A promisee who may . . . claim[] a quantum of damages that reflects an unnecessarily expensive route to vindicating his contractual expectation . . . loses the incentive to cure efficiently.” DANIEL MARKOVITS, CONTRACT LAW & LEGAL METHODS § 5.4, at 119 (2012). In tort, such a remedy may lead to duplicative recoveries and wasteful levels of precaution. Cf. In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1017 & n.1 (7th Cir. 2002).
B. The Sufficiency of Plaintiffs’ Benefit-of-the-Bargain Evidence
Having summarized the substantive law of damages in the three Bellwether States, the Court turns to whether there is evidence in the record that would allow a reasonable factfinder to find such damages in this case. Significantly, at a trial in these cases, Plaintiffs would bear the burden of showing that they are entitled to damages, see, e.g., Raishevich v. Foster, 247 F.3d 337, 343 (2d Cir. 2001), which means that for them to defeat New GM‘s motion pointing out an absence of evidence on that issue, they must come forward with evidence that would be “sufficient to establish the existence” of damages, Celotex, 477 U.S. at 322. More specifically, although Plaintiffs
Here, that means that Plaintiffs must have some evidence of, among other things, the market value of the allegedly defective vehicles that they actually received. See, e.g., Astiana v. Ben & Jerry‘s Homemade, Inc., No. C 10-4387 PJH, 2014 WL 60097, at *12-13 (N.D. Cal. Jan. 7, 2014) (holding that the “plaintiff has provided no damages evidence” because she had not “offered any expert testimony demonstrating that the market price of Ben & Jerry‘s ice cream with the ‘all natural’ designation was higher than the market price of Ben & Jerry‘s without the ‘all natural’ designation. Thus, by definition, there is no evidence showing how much higher the price of one was than the other” (emphasis added)); In re Vioxx Class Cases, 103 Cal. Rptr. 3d 83, 96 (Ct. App. 2009) (noting that, while “[t]he difference between what the plaintiff paid and the value of what the plaintiff received is a proper measure of restitution[,] [i]n order to recover under this measure, there must be evidence of the actual value of what the plaintiff received.“) (citation omitted) (emphasis added); Town E. Ford Sales, 730 S.W.2d at 801 (noting that, “in order to sustain . . . a finding of damages” based on the difference in values in an automotive defect case, “there must be evidence of both the actual amount paid by the buyer and the actual market value of the car as received in its defective condition“); Larabee, 271 S.W.3d at 548 (noting that a plaintiff must have “sufficient evidence of a difference between the fair market value of the property received and the property had it been as represented” to “support[] the existence of damages“); Givan v. Mack Truck, Inc., 569 S.W.2d 243, 249 & n.8 (Mo. Ct. App. 1978) (stating that, “even if” a “difference in values” measure of damages “were appropriate, plaintiffs failed to present any evidence of the value of a new 1972 Mack truck with the uncured defects“). Moreover, in each Bellwether State, the evidence must actually be of market value — evidence of private
Finally, and perhaps most significantly, under the substantive law of all three Bellwether States, market value is determined by the interaction of both supply and demand. See, e.g., Children‘s Hosp. Cent. Cal. v. Blue Cross of Cal., 172 Cal. Rptr. 3d 861, 872 (Ct. App. 2014) (stating that fair market value is “is the price that a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell, and both having full knowledge of all pertinent facts” (internal quotation marks omitted)); In re Marriage of Cream, 16 Cal. Rptr. 2d 575, 579 (Ct. App. 1993) (stating that fair market value “is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no obligation or urgent necessity to do so, and a buyer, being ready, willing and able to buy but under no particular necessity for so doing“); Peterson v. Cont‘l Boiler Works, Inc., 783 S.W.2d 896, 900 (Mo. 1990) (“Fair market value is not determined by value to the owner alone; it is measured also by the price that one who wishes, but does not need to buy, will pay.“); Factory Mut. Ins. Co. v. Alon USA L.P., 705 F.3d 518, 521 (5th Cir. 2013) (noting that, under Texas law, “[m]arket value is the amount a willing buyer, who is under no obligation to buy, would pay to a willing seller, who is under no obligation to sell“); Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 443 S.W.3d 820, 831 (Tex. 2014) (observing that an “offer price does not, alone, tend to establish the property‘s market value at the time it was made. [An] offer is some evidence of what a willing buyer will pay, but it is not, alone, evidence of what a willing seller will accept“). Evidence that fails to account for both phenomena is not evidence of market value.
Relying on these principles, New GM argues that Plaintiffs’ evidence is insufficient to permit a reasonable jury to award “difference-in-value” damages. See New GM SJ Mem. 19-24 & nn.10-12. New GM contends that the evidence upon which Plaintiffs rely to show a difference in value between what they paid for and what they received — namely, the expert analysis of Stefan Boedeker — is insufficient to prove difference-in-value damages under the substantive law of the three Bellwether States. See id. at 22-24.11 Notably, in response, Plaintiffs do not point to any other evidence that could support a finding of damages. Instead, they put all of their eggs in the Boedeker basket and argue that his testimony is sufficient to establish benefit-of-the-bargain damages and thus to stave off summary judgment. See Pls.’ SJ Opp‘n 34-36; see also Boedeker Report; Berman Class Cert. Decl. Ex. 215 (“Boedeker Rebuttal Report“). It follows that New GM‘s motion for summary judgment turns (for present purposes) on whether it is right about Boedeker‘s testimony. If Boedeker‘s testimony is not competent evidence of difference-in-value damages, then New GM has satisfied its burden on summary judgment by “point[ing] to an absence of evidence to support an essential element of” Plaintiffs’ claims, and Plaintiffs have failed to rebut that showing. Goenaga, 51 F.3d at 18. If Boedeker‘s testimony would be competent evidence of difference-in-value damages, however, then summary judgment cannot be granted (at least on the grounds discussed here).
Although the issue is a close one, the Court concludes that New GM has the better of the argument. The core of Boedeker‘s opinion is that “[t]he non-disclosure of defects caused class members,” including the named Plaintiffs, “to overpay for their vehicles.” Boedeker Report ¶ 22. To arrive at this conclusion, Boedeker used a survey methodology known as “conjoint analysis.” Id. ¶ 23. Conjoint analysis measures consumer desires by asking survey respondents about their relative preferences for certain combinations of product features. Id. ¶ 25; see, e.g., Saavedra v. Eli Lilly & Co., No. 2:12-CV-9366 (SVW), 2014 WL 7338930, at *4 (C.D. Cal. Dec. 18, 2014) (“Conjoint analysis is a statistical technique capable of using survey data to determine how consumers value a product‘s individual attributes — often called the market‘s willingness to pay.“); accord Hadley v. Kellogg Sales Co., 324 F. Supp. 3d 1084, 1103-04 (N.D. Cal. 2018); Zakaria, 2017 WL 9512587, at *9. On Boedeker‘s telling, for example, a conjoint analysis survey might ask consumers whether they would choose to buy cotton seeds with one set of features for $16, seeds with a more advanced set of features for $75, or if — presented with that choice — whether they would instead buy neither seed. Boedeker Report ¶ 25 fig. 1. By evaluating respondents’ answers to such questions, conjoint analyses “measure preferences for product features, . . . how changes to price affect demand for products or service[s], and . . . forecast the likely acceptance of a product if brought to market.” Id. ¶ 24 (internal quotation marks omitted).
For example, Boedeker calculated how respondents would value a car with a disclosed side airbag defect by presenting them with the following survey question:
Id. ¶ 91 fig. 9. By compiling and analyzing responses to that and similar survey questions, Boedeker was able to estimate the amount that consumers would be willing to pay for a vehicle with a particular defect that was fully disclosed — as in the above example, a vehicle with a fully disclosed side airbag defect. See id. ¶ 116. Boedeker was thus able to construct hypothetical “demand curves” for vehicles in the “but-for” world — that is, the world in which
In his rebuttal report, Boedeker clarifies that he made this assumption in order to fit a particular legal interpretation of how to measure benefit-of-the-bargain damages. See Boedeker Rebuttal Report ¶ 565. “[P]laintiffs’ damage theory,” he explains, “is ‘benefit-of-the-bargain’ damages, which requires no consideration of changed supply because the supply in the but-for-world is the same number of defective vehicles that were supplied in the actual world with the only difference that GM concealed the defect in the actual world but disclosed the defect at the point of purchase in the but-for-world.” Id. Thus, Boedeker did not estimate any possible changes in New GM‘s willingness to sell a car with a known, acknowledged, and disclosed defect — instead, he assumed that “the new equilibrium” (i.e., market) “price” in the but-for world would be the price at which “all the purchasers of defective vehicles in the actual-world would also buy in the but-for-world.” Boedeker Report ¶ 67. Using that methodology, Boedeker came up with a chart that Plaintiffs cite as their sole evidence showing difference-in-value damages. See Berman Decl. Ex. 43. The chart lists each named Bellwether State Plaintiff and Boedeker‘s estimated economic loss damages based on his conjoint analysis of consumer willingness to pay for a vehicle with the particular alleged defect fully disclosed. Id.; Pls.’ SJ Opp‘n 34.
Under the substantive law of the Bellwether States discussed above, this evidence does not suffice to establish damages. The benefit-of-the-bargain theory awards damages based on the difference between what the plaintiff paid for and the fair market value of what the plaintiff received. As Boedeker acknowledges, fair market value is determined according to the equilibrium price of a good, Boedeker Report ¶ 43, and the “equilibrium price is not the simple average of all consumers’ willingness to pay. Rather, the equilibrium price depends on supply and demand,” id. ¶ 44. “In other words,” Boedeker himself explains, “the willingness-to-pay does not necessarily reflect the actual price that a consumer ends up paying for a product.” Id. ¶ 46. The problem is, as Boedeker himself acknowledges, his model measures only the effect that a disclosed defect would have on willingness to pay. Id. ¶ 67; Boedeker Rebuttal Report ¶ 565. Indeed, Boedeker straightforwardly admits that he did not inquire into New GM‘s willingness to sell. See, e.g., 7/6/18 Boedeker Dep. 462:11-18; Pixton Class Cert Decl. Ex. 34 (“7/5/18 Boedeker Dep.“), at 235:3-20 (“Q. And there‘s no information that you‘ve looked at about GM‘s willingness to sell
For that reason, Boedeker‘s conjoint analysis does not provide competent proof of Plaintiffs’ damages.12 Notably, that conclusion is supported by a handful of decisions that have (in various procedural contexts) rejected conjoint analyses as evidence of market value for precisely the same reason. See Zakaria, 2017 WL 9512587, at *17-21 (decertifying a damages class because a conjoint analysis that measured only plaintiffs’ changed willingness to pay was “insufficient to establish a basis for calculating either restitution or actual damages” under California law); In re NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050, 1119 (C.D. Cal. 2015) (denying class certification because the plaintiffs’ proffered conjoint analysis tested only what consumers were willing to pay “without considering other factors in a functioning marketplace,” and therefore “[did] not address the fair market value of NJOY‘s e-cigarettes absent the misrepresentations and omissions.” (emphasis omitted)); id. at 1122 (“A consumer‘s subjective valuation of the purported safety message, measured by their relative willingness to pay for products with or without the message, . . . does not permit the court to calculate the true market price of NJOY e-cigarettes absent the purported misrepresentations.“).
(emphasis omitted)); Apple, Inc. v. Samsung Elecs. Co., No. 11-CV-01846 (LHK), 2014 WL 976898, at *12 (N.D. Cal. Mar. 6, 2014) (denying a motion for permanent injunctive relief because the proffered conjoint analysis measured only demand and did “not account for supply at all, much less the real-world intersection of market demand and market supply, which sets the real-world market price,” leaving the plaintiff without evidence of a price increase); Saavedra, 2014 WL 7338930, at *5 (denying class certification because the
Zakaria is representative of these cases. In that case, a class sought compensation for the alleged overpayment for infant formula based on a misleading label. 2017 WL 9512587, at *1 The parties agreed that the proper measure of damages was “the amount of the price premium, if any,” that the plaintiffs were induced to pay as a result of the deceptive label. Id. at *18. But because the plaintiffs’ proposed conjoint analysis showed only consumers’ “potential willingness to pay a premium,” the court held that “market value [had] not been demonstrated adequately” for purposes of California law and decertified the class. Id. at *20-21. On appeal, the Ninth Circuit affirmed by summary order. The Court explained — citing Pulaski — that, under California law, “plaintiffs can measure class-wide damages using methods that evaluate what a consumer would have been willing to pay for the product had it been labeled accurately.” 755 Fed. App‘x at 624 (memorandum disposition). The Court then continued:
Such methods must, however, reflect supply-side considerations and marketplace realities that would affect product pricing. . . . Dr. Howlett‘s conjoint analysis did not reflect market realities and prices for infant formula products. [It] showed only how much consumers subjectively valued the 1st and Only Seal, not what had occurred to the actual market price of Good Start Gentle with or without the label. Thus, regardless whether consumers were willing to pay a higher price for the labelled product, the expert‘s opinion did not contain any evidence that such higher price was actually paid; hence, no evidence of restitution or actual damages was proffered. . . . Dr. Howlett‘s conjoint analysis alone therefore does not create a genuine issue of material fact regarding the amount of restitution or actual damages.
Id. at 624-25 (emphasis added). In short, where the law awards damages based on the difference in market value, evidence — including conjoint analyses — that measures only consumers’ subjective valuation or willingness to pay is not sufficient evidence of such damages.
Although none of those decisions are binding on this Court, they are persuasive and consistent with the substantive law of each Bellwether State discussed above. The Court thus concludes that Boedeker‘s demand-side-only evidence not only fails to estimate hypothetical market conditions, but also fails to qualify as evidence of benefit-of-the-bargain damages entirely. That conclusion is further supported by logic and common sense. To see why, one need only consider a hypothetical Widget Company that manufactures and sells widgets. The market price of a working widget is $100. One day, the Widget Company discovers that it has manufactured a batch of widgets with a latent defect that would cost an additional $5 to repair. The Widget Company calls an expert who performs a conjoint analysis to determine that consumers would be willing to pay $75 for a widget knowing that it had that particular defect. Would the Widget Company sell its defective widgets for $75 each? Or (assuming it remained profitable to do so, given the additional cost) would it pay $5 each to repair each widget, and sell each
It is true, as Plaintiffs argue, that various courts have approved of the use of conjoint analyses to measure benefit-of-the-bargain damages — in some cases, no less, analyses proffered by Boedeker himself. See Hilsley v. Ocean Spray Cranberries, Inc., No. 17-CV-2335 (GPC), 2019 WL 3006465, at *4 (S.D. Cal. July 10, 2019); In re Arris Cable Modem Consumer Litig., 327 F.R.D. 334, 370-73 (N.D. Cal. 2018); Hadley, 324 F. Supp. 3d at 1105-06; Schneider v. Chipotle Mexican Grill, Inc., 328 F.R.D. 520, 542-43 (N.D. Cal. 2018); Fitzhenry-Russell v. Dr. Pepper Snapple Grp., Inc., 326 F.R.D. 592, 606 (N.D. Cal. 2018); In re MyFord Touch Consumer Litig., 291 F. Supp. 3d at 970-71; Broomfield v. Craft Brew All., Inc., No. 17-CV-01027 (BLF), 2018 WL 4952519, at *19 (N.D. Cal. Sept. 25, 2018); Davidson v. Apple, Inc., No. 16-CV-04942 (LHK), 2018 WL 2325426, at *22 (N.D. Cal. May 8, 2018); In re Dial Complete Mktg. & Sales Practices Litig., 320 F.R.D. 326, 332 (D.N.H. 2017); Sanchez-Knutson v. Ford Motor Co., 181 F. Supp. 3d 988, 995 (S.D. Fla. 2016); In re: Lenovo Adware Litig., No. 15-MD-02624 (RMW), 2016 WL 6277245, at *21 (N.D. Cal. Oct. 27, 2016); In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 1023-32 (C.D. Cal. 2015); Guido v. L‘Oreal, USA, Inc., No. 2:11-CV-01067 (CAS), 2014 WL 6603730, at *7-14 (C.D. Cal. July 24, 2014); see also ECF No. 6187 (“Pls.’ Boedeker Daubert Opp‘n“), at 34-41. In some of these cases (for example, Arris Cable and Sanchez-Knutson), however, the courts did so with little or no consideration of the market price issue. In others (for example, Guido, Lenovo, and ConAgra), the courts found (whether correctly or not) that the conjoint analyses did take into consideration market prices. See Zakaria, 2017 WL 9512587, at *19-20 (distinguishing Lenovo and ConAgra on that basis). And the remaining cases are distinguishable, unpersuasive, or both.
One group of these cases, for example, involved classic allegations of mislabeling. See Hadley, 324 F. Supp. 3d at 1105; Broomfield, 2018 WL 4952519, at *19; Fitzhenry-Russell, 326 F.R.D. at 606; Dial Complete Mktg., 320 F.R.D. at 329; Hilsley, 2019 WL 3006465, at *1; Schneider, 328 F.R.D. at 527. On the whole, the courts in these cases found that the conjoint analyses “adequately account[ed] for supply-side factors” because “(1) the prices used in the surveys underlying the analyses reflect[ed] the actual market prices that prevailed during the class period; and (2) the quantities used (or assumed) in the statistical calculations reflect[ed] the actual quantities of products sold during the class period.” Hadley, 324 F. Supp. 3d at 1105.
In the other cases, courts approved of conjoint analyses — including Boedeker‘s — on the ground that they “account[] for the supply side of the equation” because they “discuss[] the role of supply in conjoint analysis at length.” Davidson, 2018 WL 2325426, at *22. Needless to say, however, merely including a section titled “Consideration of the Supply Side” in an expert report — as Boedeker does here, see Boedeker Report 22 — does not cut it if the analysis reflected in that expert report does not actually include meaningful consideration of supply-side factors. That is the case here. Boedeker‘s key supply-side assumptions are (1) that New GM‘s marginal costs would be the same in the but-for world where it disclosed the defects at the point of sale and (2) that the supply — that is, the number of cars New GM would sell — would also be the same. See Boedeker Report ¶¶ 67-68 (explaining that his model “quantif[ies] the new equilibrium price where all the purchasers of defective vehicles in the actual-world would also buy in the but-for-world“). But those assumptions are undermined by Plaintiffs’ own evidence, including Boedeker‘s report and testimony themselves. See 7/5/18 Boedeker Dep. 62-63; see also Boedeker Rebuttal Report ¶ 387 (acknowledging that an assumption of inelastic supply would be “fundamentally flawed” because it would “mean[] that a given product is supplied by the manufacturer in the same quantity no matter what the price is“); 6/28/18 Gans Dep. 281:6-10 (conceding that it is “highly unlikely that GM
More fundamentally, those assumptions are inconsistent with the substantive law in all three of the Bellwether States, which defines market value to mean “the price that a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell.” Children‘s Hosp. Cent. Cal., 172 Cal. Rptr. 3d at 872 (California) (internal quotation marks omitted); accord Peterson, 783 S.W.2d at 900 (Missouri); Factory Mut. Ins. Co., 705 F.3d at 521 (Texas). To assume, as Boedeker does, that New GM would sell the same number of vehicles in the but-for world despite commanding a lower price for each vehicle at the same marginal cost per sale is to assume a massive forced sale — contrary to the substantive law in all three Bellwether States. Put differently, although Boedeker‘s hypothetical constant supply curve admits that New GM would ordinarily be willing to sell a smaller quantity of vehicles at the lower price consumers would then be willing to pay, Boedeker simply assumes that New GM would be willing to sell the same quantity anyway, notwithstanding the lower price. See Boedeker Report 21 fig. 8; cf. MyFord Touch Consumer Litig., 291 F. Supp. 3d at 970 (discussing a graph similar to the one displayed as Figure 8 to Boedeker‘s report in this case and concluding that “the supply curve that concerns Mr. Boedeker‘s analysis is effectively vertical — supply is fixed regardless of price in this region of the graph“).16 For purposes of this motion, that is not enough. If a gap remains in the evidence that could support factfinding about market value, the Bellwether States do not permit a plaintiff to plug the gap with assumptions. Instead, the Bellwether States require a plaintiff to adduce evidence that, like direct evidence of actual market prices, appropriately reflects each composite element of market value. Here, because Boedeker‘s evidence is insufficient to establish market value under the law in each of the Bellwether States, it is insufficient to stave off summary judgment to the extent the Court has explained.
CONCLUSION
In the final analysis, the Court‘s task here is not to decide what makes sense as a matter of policy. Cf. MyFord Touch, 291 F. Supp. 3d at 971 (citing “policy reasons to afford Plaintiffs a reasonable opportunity to posit damages based on a more flexible approach to economic theory“). Nor is it even to evaluate whether Boedeker‘s analysis passes muster as a matter of economic theory. Instead, it is to apply the substantive law of each Bellwether State. As discussed, that law requires that benefit-of-the-bargain
In their various motion papers, the parties have briefed many other issues, including but not limited to the viability of various claims and/or other damages theories (such as Plaintiffs’ bankruptcy-fraud claims, their claims for “lost time” damages, the claims of Plaintiffs who purchased Old GM or used vehicles, the claims of Plaintiffs who disposed of their vehicles before the recalls, and the claims of Plaintiffs whose vehicles are subject to “service parts” vehicle recalls), the effectiveness of New GM‘s recalls and repairs, the availability of injunctive relief, class certification, and the admissibility of certain experts’ testimony. In light of the ruling above, however, the Court will refrain from reaching such issues pending discussion between and with the parties and, possibly, new briefing. It does so because the ruling almost certainly moots some of the remaining issues and, with respect to the issues that are not mooted (for example, class certification), the ruling changes the landscape in dramatic ways that may call for new briefing. On top of that, and given that changed landscape, it may well make sense for the parties to revisit the issue of settlement. And, of course, Plaintiffs may petition for certification of an interlocutory appeal. In short, even though the parties have spilled considerable ink briefing other issues, the Court concludes, as a matter of efficient case management, that it makes more sense to stop where it has than to go on.17
The parties should immediately meet and confer with respect to the implications of this Opinion and Order and be prepared to address the next steps for both this litigation and the pending motion to withdraw the bankruptcy reference in 19-CV-1852 (JMF) — or, at a minimum, a process for determining the next steps — at the status conference on August 15, 2019.18
The Clerk of Court is directed to docket this Opinion and Order in 14-MD-2543, 14-MC-2543, and 19-CV-1852, and to terminate 14-MD-2543, ECF Nos. 5845, 5854,
SO ORDERED.
Dated: August 6, 2019
New York, New York
JESSE M. FURMAN
United States District Judge