In re Motors Liquidation Co.

522 B.R. 13, 2014 Bankr. LEXIS 4688, 2014 WL 5819825
United States Bankruptcy Court, S.D. New York·Decided November 10, 2014·No. Case No.: 09-50026 (REG) (Jointly Administered)·Published·Cited by 9 cases

Opinion

Chapter 11

DECISION WITH RESPECT TO NO STAY PLEADING, AND RELATED MOTION FOR ABSTENTION (SES-AY PLAINTIFFS)

ROBERT E. GERBER, UNITED STATES BANKRUPTCY JUDGE:

Once again — now for the fourth time, and for the second time by the same counsel — a plaintiff group wishing to proceed ahead of all of the others has asked for leave to go it alone. This request, brought on behalf of plaintiffs Ishmail Sesay and Joanne Yearwood (the “Sesay Plaintiffs”), by Gary Peller, Esq., the same counsel whose contentions I rejected in my written opinion denying the second request, follows two written decisions1 and an oral one, all holding that litigants with ignition switch monetary loss claims barred, in whole or in part, by my July 5, 2009 sale order (the “Sale Order”) must await the conclusion of the now-ongoing briefing and argument before me in all of the other actions, whose number has now swollen to [17]*17over 100.2 This request too is denied. The great bulk of the contentions here do not differ from the contentions I rejected in Phaneuf and Elliott, the latter of which were made by this same counsel. And the new contentions (asserted insufficient time to respond and other assertedly unfair procedures) and the new request (that I abstain from hearing this controversy) lack merit as well.

The Sesay Plaintiffs’ action will be stayed along with the others.

My Findings of Fact (made solely with respect to the Sesay Plaintiffs’ claims) and Conclusions of Law (truncated to limit discussion of matter previously set forth in Phaneuf and Elliott) follow.

Facts

In April 2014, New GM filed a motion (the “Motion to Enforce”) to enforce the Sale Order with respect to ignition switch monetary loss civil actions (“Ignition Switch Actions”). In May, I held an on-the-record conference to discuss coordinated procedures to tee up the Motion to Enforce issues for judicial consideration in light of the growing number of Ignition Switch Actions — 87 at the time, though the number has now swollen to over 100. Counsel for New GM and Ignition Switch Actions plaintiffs conferred and negotiated a broad array of mechanisms to agree upon undisputed facts and identify key threshold issues (“Threshold Issues”) whose determination would resolve or facilitate resolution of the Motion to Enforce.

As part of that effort — given that prosecution of many, if not most, of the Ignition Switch Actions claims at the time was barred by terms of the Sale Order (assuming that such terms were enforceable against Ignition Switch Actions plaintiffs— a matter yet to be decided, and which was included amongst the Threshold Issues)— the Ignition Switch Actions plaintiffs voluntarily put their actions on hold, pending determination of the Threshold Issues. Counsel for New GM and the great bulk of the Ignition Switch Actions plaintiffs who had filed suit as of that time established a procedure to move forward: Ignition Switch Actions plaintiffs would either (i) agree to enter into a stipulation with New GM staying their individual Ignition Switch Actions, or (ii) file with the Court a “No Stay Pleading” explaining why they believed their individual Ignition Switch Actions should not be stayed. I approved these procedures in a scheduling order (the “Scheduling Order”). All but a very few of the plaintiff groups agreed to the stay stipulations. The Sesay Plaintiffs are one of only seven plaintiff groups to object to staying the individual proceedings.3 Their counsel, Peller, represents three of these groups.

In June 2014, New GM filed a motion to establish stay procedures for newly-filed [18]*18Ignition Switch Actions, which I approved in an order dated July 8, 2014 (the “Stay Procedures Order”).4 That order requires plaintiffs in newly-filed Ignition Switch Actions, within three business days of receipt of a form stay stipulation, to either enter into a stay stipulation or file a “No Stay Pleading” with the Court.

In July 2014, I held another conference to address additional procedural issues that arose after the entry of the Scheduling Order. At the July conference, I identified the four Threshold Issues that should be decided first in the contested proceedings, and entered an order (the “Supplemental Scheduling Order”) with respect to a briefing schedule.5

The Phaneuf Plaintiffs filed a No Stay Pleading arguing that their claims related to New GM’s conduct post-bankruptcy and they were therefore entitled to continue litigating their Ignition Switch Action. I ruled against the Phaneuf Plaintiffs, finding that it made sense to address common issues at one time. I initially issued an oral ruling, stating, among other things:

[T]he sale order now applies, though it’s possible, without prejudging any issues, that, after I hear from the other 87 litigants, I might ultimately rule that it does not apply to some kinds of claims and that, even if the sale order didn’t apply, that New GM would be entitled to a preliminary injunction temporarily staying the Phaneuf plaintiffs’ action from going forward, pending a determination by me on the other 87 litigants’ claims under the standards articulated by the circuit in Jackson Dairy and its progeny.6

I subsequently entered a written decision memorializing the Phaneuf oral ruling.7

After ruling on the Phaneuf No Stay Pleading, I had to address nearly identical contentions with respect to the Elliott No Stay Pleading. Additionally, however, the Elliott Plaintiffs surprisingly claimed that this Court did not have subject matter jurisdiction over the Motion to Enforce, focusing nearly entirely on the “related to” prong of 28 U.S.C. § 1334. In my second written decision, dealing with the Elliott Plaintiffs’ claims, I stated:

Once again, a plaintiff group wishing to proceed ahead of all of the others (only one week after I issued the written opinion memorializing my earlier oral ruling proscribing such an effort) has asked for leave to go it alone. Its request is denied. With a single exception, the issues raised by this group (the “Elliott Plaintiffs”) don’t differ from those addressed in Phaneuf. And as to that single exception — their claim that I don’t have subject matter jurisdiction to construe and enforce the Sale Order in this ease — their contention is frivolous....8

I noted that bankruptcy courts “have subject matter jurisdiction to enforce their orders in bankruptcy cases and proceedings under those courts’ ‘arising in ’ jurisdiction.” 9 I continued:

As in Phaneuf, I find that the Elliott Plaintiffs are asserting claims with respect to vehicles that were manufactured before the 363 Sale, and, although to a lesser extent than in Phaneuf, relying on conduct of Old GM. Thus I find as a fact, or mixed question of fact and [19]*19law, that the threshold applicability of the Sale Order&emdash;and its injunctive provisions&emdash;has been established in the first instance.

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In re Motors Liquidation Co., 522 B.R. 13, 2014 Bankr. LEXIS 4688, 2014 WL 5819825 (N.Y. 2014).

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