Critique of Damages Methodology in GM Automotive Recall Class Action

Working on behalf of General Motors (GM), a Brattle team rebutted the plaintiffs’ claims that GM’s alleged failure to provide earlier notice of recalls related to ignitions, airbags, and power steering systems caused consumers to overpay for certain new GM cars. Our analysis showed that the plaintiffs’ experts had failed to calculate the amount of this overpayment since they provided a survey-based analysis that could – at best – only capture the demand side of the market instead of market prices determined by the intersection of supply and demand. Consistent with our findings, the court concluded that the plaintiffs’ analysis of conjoint survey data did not meet the requirements of the plaintiffs’ “benefit of the bargain” damages theory. The final settlement was less than one percent of the plaintiffs’ original $17 billion damages claim.