Abrigo Castro v. Ford Motor Company

• Court: District Court, C.D. California
• Decided: October 10, 2023
• Docket: 2:23-cv-01891
• Status: Unknown

Opinion

1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ABRIGO CASTRO, Case No. 2:23-cv-01891-FLA (RAOx)

12 Plaintiff, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 FORD MOTOR COMPANY, 15 Defendant. 16

17 18

19 20 21 22 23 24 25 26 27 28 1 RULING 2 On February 16, 2023, Plaintiff Jose Abrigo Castro (“Plaintiff” or “Abrigo 3 Castro”) initiated this action against Defendant Ford Motor Company (“Defendant” or 4 “Ford”) in the Los Angeles County Superior Court. Dkt. 1-1. The Complaint alleges 5 three causes of action for violation of the California Song-Beverly Consumer 6 Warranty Act (the “Song-Beverly Act”), Cal. Civ. Code § 1970, et seq. Id. Plaintiff 7 seeks actual damages, civil penalties, and attorney’s fees. Id. at 19.1 8 On March 14, 2023, Defendant removed the action to this court based on 9 alleged diversity jurisdiction. Dkt. 1 (“NoR”). In its Notice of Removal, Defendant 10 alleges the court has subject matter jurisdiction under 28 U.S.C. § 1332, because the 11 amount in controversy exceeds $75,000. Id. at 3. 12 On August 30, 2023, the court ordered the parties to show cause why the action 13 should not be remanded for lack of subject matter jurisdiction due to an insufficient 14 amount in controversy (“OSC”). Dkt. 20. Both Plaintiff and Defendant filed 15 responses. Dkt. 21 (“Def. Resp.”); Dkt. 22 (“Pl. Resp.”). 16 Having reviewed the Notice of Removal and the parties’ responses to the OSC, 17 the court finds Defendant fails to establish subject matter jurisdiction and REMANDS 18 this action to the Los Angeles County Superior Court. 19 DISCUSSION 20 Federal courts are courts of “limited jurisdiction,” possessing “only that power 21 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 22 Am., 511 U.S. 375, 377 (1994); U.S. Const. art. III, § 2, cl. 1. District courts are 23 presumed to lack jurisdiction unless the contrary appears affirmatively from the 24 record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006). 25 Additionally, federal courts have an obligation to examine jurisdiction sua sponte 26

27 1 The court cites documents by the page numbers added by the CM/ECF system, 28 rather than any page numbers listed on documents natively. 1 before proceeding to the merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526 2 U.S. 574, 583 (1999). 3 Federal courts have jurisdiction where an action arises under federal law or 4 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 5 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 6 §§ 1331, 1332(a). Thus, a notice removing an action from state court to federal court 7 must include “a plausible allegation that the amount in controversy exceeds the 8 jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 9 U.S. 81, 89 (2014). Where “the plaintiff contests, or the court questions, the 10 defendant’s allegation” concerning the amount in controversy, “both sides [shall] 11 submit proof,” and the court may then decide whether the defendant has proven the 12 amount in controversy “by a preponderance of the evidence.” Id. at 88–89. “Federal 13 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 14 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). It is Defendant’s 15 burden as the removing party to justify this court’s exercise of jurisdiction. Id. at 567. 16 A. Actual Damages 17 At issue here is whether the amount in controversy is sufficient to establish 18 diversity jurisdiction. Under the Song-Beverly Act, a plaintiff may recover “in an 19 amount equal to the actual price paid or payable by the buyer,” reduced by an amount 20 “directly attributable to use by the buyer prior to the time the buyer first delivered the 21 vehicle to the manufacturer or distributor, or its authorized service and repair facility 22 for correction of the problem that gave rise to the nonconformity.” Cal. Civ. Code 23 § 1793.2(d)(2)(B)–(C). This reduction, also known as a mileage offset, is calculated 24 by dividing the number of miles driven prior to first delivery for correction by 25 120,0000. See id. § 1793.2(d)(2)(C). 26 In the Notice of Removal, Defendant alleges Plaintiff’s actual damages pleaded 27 are $37,848.13, “[b]ased on the numbers provided in Plaintiff’s Purchase Contract, as 28 well as repair orders in possession of Ford[.]” NoR at 10. In its response to the 1 court’s order to show cause, Defendant argues $42,901.85 in actual damages are at 2 issue. Def. Resp. at 4. Defendant calculates this figure by taking the total amount 3 Plaintiff owed in the sales contract (after taxes and financing) and subtracting a 4 mileage offset of 3,554 miles. Id. at 3–4. Defendant, however, does not present 5 evidence of when Plaintiff’s first delivery for repair occurred. See id.; Dkt. 21-1 6 (Proudfoot Decl.). Furthermore, Defendant’s statements in its response to the OSC 7 conflict with its assertions and calculations in a declaration submitted by its counsel, 8 Mr. Proudfoot, in support of the Notice of Removal. There, Mr. Proudfoot stated 9 Plaintiff paid only $21,578.04 as of the removal and calculated a mileage offset of 10 31,628 miles based on the exhibits attached to the declaration. See Dkt. 3 at 3–4. 11 Using these figures, it appears that a reasonable estimate of Plaintiff’s actual damages 12 was $15,890.79, as of the removal. See Cal. Civ. Code § 1793.2(d)(2)(C). 13 Defendant argues two additional damages categories bring the amount in 14 controversy to over $75,000: civil penalties and attorney’s fees. For the following 15 reasons, however, the court finds Defendant’s estimates of these categories are 16 speculative and insufficient to bring the amount in controversy past the jurisdictional 17 threshold. 18 B. Civil Penalties 19 “A plaintiff who establishes that a violation of the Song-Beverly Act was 20 willful may recover a civil penalty of up to two times the amount of actual damages.” 21 Estrada v. FCA US LLC, Case No. 2:20-cv-10453-PA (JPRx), 2021 WL 223249, 22 at *3 (C.D. Cal. Jan. 21, 2021) (citing Cal. Civ. Code § 1794(c)) (brackets omitted). 23 However, “‘[t]he civil penalty under California Civil Code § 1794(c) cannot simply be 24 assumed.’” Pennon v. Subaru of Am., Inc., Case No. 2:22-cv-03015-SB (RAOx), 25 2022 WL 2208578, at *2 (C.D. Cal. June 17, 2022) (remanding action where 26 defendant provided no specific argument or evidence for including a civil penalty in 27 the amount in controversy) (quoting Castillo v. FCA USA, LLC, Case No. 3:19-cv- 28 00151-CAB-MDD, 2019 WL 6607006, at *2 (S.D. Cal. Dec. 5, 2019)). “To satisfy 1 its burden, the removing party ‘must make some effort to justify the assumption by, 2 for example, pointing to allegations in the [c]omplaint suggesting award of a civil 3 penalty would be appropriate, and providing evidence—such as verdicts or judgments 4 from similar cases—regarding the likely amount of the penalty.’” Id. (quoting 5 Zawaideh v. BMW of N. Am., LLC, Case No. 3:17-cv-02151-W-KSC, 2018 WL 6 1805103, at *2 (S.D. Cal. Apr. 17, 2018)). 7 District courts regularly find a plaintiffs’ boilerplate allegations regarding 8 defendants’ willfulness are, without more, insufficient to establish that civil penalties 9 of two times actual damages are not speculative and should be included in the amount 10 in controversy. See Estrada, 2021 WL 223249, at *3 (collecting cases and remanding 11 where inclusion of civil penalties to establish amount in controversy was “too 12 speculative and not adequately supported by the facts and evidence”). This is because 13 “[s]imply assuming a civil penalty [will be] award[ed] is inconsistent with the 14 principle that the defendant must provide evidence that it is more likely than not that 15 the amount in controversy requirement is satisfied.” Makol v. Jaguar Land Rover N. 16 Am., LLC, Case No. 5:18-cv-03414-NC, 2018 WL 3194424, at *3 (N.D. Cal. June 28, 17 2018) (quotation marks omitted); see also Zawaideh, 2018 WL 1805103, at *2; 18 Khachatryan, 2021 WL 927266, at *2. 19 Defendant argues a civil penalty of twice the repurchase price of the Subject 20 Vehicle should be included in the amount in controversy “since Plaintiff is also 21 requesting civil penalties of up to twice their actual damages amount[.]” Def. Resp. at 22 4; NoR at 8, 10. Defendant, however, does not point to any allegations of the 23 Complaint or present evidence regarding willfulness, or otherwise establish that an 24 award of civil penalties is not speculative. See id. Accordingly, Defendant fails to 25 meet its burden to demonstrate by a preponderance of the evidence that civil penalties 26 of two times actual damages should be included in the amount in controversy. See 27 Estrada, 2021 WL 223249, at *3. 28 / / / 1 C. Attorney’s Fees 2 In the Ninth Circuit, attorney’s fees awarded under fee-shifting statutes may be 3 considered in assessing the jurisdictional threshold. Gonzales v. CarMax Auto 4 Superstores, LLC, 840 F.3d 644, 649 (9th Cir. 2016). A removing defendant, 5 however, bears the burden “to prove that the amount in controversy (including 6 attorneys’ fees) exceeds the jurisdictional threshold by a preponderance of the 7 evidence,” and must “make this showing with summary-judgment-type evidence.” 8 Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 795 (9th Cir. 2018). “A 9 district court may reject the defendant’s attempts to include future attorneys’ fees in 10 the amount in controversy if the defendant fails to satisfy this burden of proof.” Id. 11 “While a defendant may meet its burden to establish a reasonable estimate of 12 attorneys’ fees by identifying awards in other cases, those cases must be similar 13 enough to the case at hand that the court can conclude that it is more likely than not 14 that the plaintiff may incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, 15 Case No. 3:21-cv-00857-TWR-AGS, 2021 WL 4352340, at *6 (S.D. Cal. Sept. 24, 16 2021); cf. D’Amico v. Ford Motor Co., Case No. 2:20-cv-02985-CJC (JCx), 2020 WL 17 2614610, at *4 (C.D. Cal. May 21, 2020) (“[M]any cases alleging violations of the 18 [Song-Beverly] Act settle early.”). A defendant fails to show attorney’s fees are part 19 of the amount in controversy where it “makes no effort to explain what amount of 20 attorney fees might be sought or awarded in this case, neglecting to include so much 21 as an estimate of the hour or billing rates that might apply.” Vega v. FCA US, LLC, 22 Case No. 2:21-cv-05128-VAP (MRWx), 2021 WL 3771795, at *4 (C.D. Cal. Aug. 25, 23 2021). 24 Defendant argues “Plaintiff’s attorneys in Song Beverly cases tried or prepared 25 for trial regularly request more than $ 65,000.” Def. Resp. at 6–7. Defendant, 26 however, does not discuss the facts of the cases cited or explain how those cases were 27 in any way analogous to the case at hand. See id. The fact that Plaintiffs’ counsel 28 sought and obtained significant attorney’s fee awards in other actions involving the 1 | Song-Beverly Act is alone insufficient to demonstrate it is more likely than not that 2 | Plaintiffs will incur a similar fee award here. See Kaplan, 2021 WL 4352340, at *6. 3 | Defendant’s argument, thus, fails. 4 CONCLUSION 5 In sum, Defendant fails to meet its burden to demonstrate by a preponderance 6 | of the evidence that the amount in controversy exceeds the jurisdictional minimum for 7 || federal jurisdiction based on diversity. The court, therefore, REMANDS the action to 8 | the Los Angeles County Superior Court, Case No. 23GDCV00313. All dates and 9 | deadlines in this court are VACATED. The clerk of the court shall close the action 10 | administratively. 11 12 IT IS SO ORDERED. 13 14 | Dated: October 10, 2023

FERNANDO L. AENLLE-ROCHA 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28