The big surprise in bids to lead GM ignition switch litigation

July 29, 2014

David Boies of Boies, Schiller & Flexner — the superstar litigator best known as the defender of same-sex marriage, Al Gore, securities class actions and Napster — is ready for a different sort of a challenge: He wants to be a products liability class action lawyer.

Boies was among the 60 or so lawyers who submitted an application Monday with U.S. District Judge Jesse Furman of Manhattan for a leadership spot in the consolidated litigation over GM’s ignition switch defects. Boies, whose firm filed a class action earlier this month in federal court in Mississippi on behalf of owners of defective GM cars, wants to serve as one of the three co-lead counsel in the case, arguing that he has long “worked to ensure that the efforts of a few benefit the injuries of many.”

Boies’s application was the wild card among Monday’s filings; his firm appears regularly as lead counsel in antitrust class actions but isn’t known for products liability cases. The other big-name applicants — including Motley Rice; Susman Godfrey; Beasley, Allen, Crow, Methvin, Portis & Miles; Baron & Budd; Robbins Geller Rudman & Dowd and Cohen Milstein Sellers & Toll — are more familiar in personal injury litigation.

But what’s startling is that none of those firms has asked to be appointed lead counsel in the GM case. Instead, they and almost all of the other applicants who submitted letters to Judge Furman on Monday asked to be appointed to the second tier of leadership, a 10-lawyer executive committee, or to be named to one of two liaison counsel posts the judge established in a pre-trial order earlier this month.

That would seem to clear the way for Furman to appoint as lead counsel the three firms he has already put in temporary charge of the GM litigation: Hagens Berman Sobol Shapiro; Lieff Cabraser Heimann & Bernstein; and Robinson Calcagnie Robinson Shapiro Davis. All three firms, which also had leadership roles in the billion-dollar Toyota sudden acceleration litigation, asked in filings on Monday to be appointed GM lead counsel.

As a matter of strategy, it makes sense for the other big-name firms to bid for an appointment to the executive committee rather than apply to be lead counsel. Under the procedure Furman set up (based on a proposal by the three temporary lead counsel) Hagens Berman, Robinson, and Lieff Cabraser will recommend to the judge their choices for liaison counsel and executive committee membership. Furman doesn’t have to accept the recommendations, but many other firms seem to have decided not to risk alienating the temporary leads with competing lead counsel applications.

Not everyone in the GM case, though, is willing to cede control without a fight. In addition to Boies and the three temporary lead counsel, at least four other firms have asked Furman to appoint them to head the litigation. Robert Hilliard of Hilliard Munoz Gonzales, for instance, asserted that car crash victims, like his clients, deserve a say in how the GM case is run. “These are people who want me to represent them,” Hilliard told me. Like Boies and lead counsel applicants Podhurst Orseck and Gray, Ritter & Graham, Hilliard didn’t identify any problems with Hagens Berman, Robinson or Lieff Cabraser, but merely argued that he would bring valuable insight and experience to the case as lead counsel.

Wolf Haldenstein Adler Freeman & Herz took a more aggressive approach in its lead counsel submission. The firm suggested that temporary lead counsel Hagens Berman and Robinson may end up torn between clients with competing interests. Those firms have filed a sweeping class action on behalf of all owners of GM cars, alleging that the value of their vehicles has been diminished by 35 identified defects. The class action has been transferred to Judge Furman as part of the multidistrict GM litigation, but Wolf Haldenstein contended in Monday’s filing that owners of cars with allegedly defective ignition switches have simpler liability and damages cases than members of the overarching class. Judge Furman, the firm said, needs to appoint a lead counsel who will be sure to protect the ignition switch class.

In an email Thursday, Steve Berman of Hagens Berman said that Judge Furman has already heard and discarded Wolf Haldenstein’s argument about competing interests. (In a footnote in the order establishing a leadership structure, the judge said that potential differences among plaintiffs are not a concern at this early stage of the litigation and can be addressed later, if necessary.)

“Wolf knows they don’t meet the qualifications of the other applicants and that the only way to get a spot for them is to conjure up a conflict,” Berman said in the email.

“We would never conjure up anything for self-serving interests,” responded Wolf partner Alexander Schmidt, who pointed out that two other firms in the GM case, Block & Leviton and Bonnett Fairbourn Friedman & Balint, have also raised concerns about competing interests among potential class members (though neither of those firms has asked to be appointed lead counsel). “We represent the interests of the class. As much as some people are downplaying the issue, there is a serious risk not only of substantial delay but also substantial injury in terms of potentially diminished recovery to the original ignition switch class,” Schmidt said.

Judge Furman will hold an August 11 hearing on GM leadership applications. Should be a lively session.

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