8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
11 EDUARDO BARBOZA, et al., No. 2:23-cv-02314-DJC-JDP
12 Plaintiffs, v. 13 ORDER FCA US, LLC, 14 Defendant. 15 16
17 Plaintiffs Eduardo Barboza and Joanna Castellano have filed the present action
18 against Defendant FCA US, LLC based on allegations that Defendant knowingly sold
19 Plaintiffs a vehicle with a transmission that contained one or more defects. After this
20 suit was originally filed in the San Joaquin County Superior Court, Defendant removed
21 it to this court on the basis of diversity jurisdiction. Plaintiffs now seek to have the
22 action remanded to the state court and Defendant asks that the Court dismiss 23 Plaintiffs’ Complaint for failure to state a claim. 24 For the reasons stated below, Plaintiffs’ Motion to Remand (Mot. (ECF No. 18)) 25 is granted and Defendant’s Motion to Dismiss (ECF No. 6) is denied as moot. 26 I. Background 27 Plaintiffs allegedly entered into a warranty contract with Defendant for a 2016 28 Chrysler 200 vehicle. Plaintiffs claim that Defendant failed to service or repair defects 1 in the vehicle, most specifically a “transmission defect,” despite the presence of
2 express and implied warranties. Plaintiffs bring causes of action for violations of Civil
3 Code sections 1793.2(a)(3), (b), and (d) as well as causes of action for fraudulent
4 inducement and violation of the implied warranty. (Compl. (ECF No. 1-2, Ex. A) at 8–
5 13.) Plaintiffs allege that as a result of Defendant’s actions “Plaintiffs suffered damages
6 in a sum to be proven at trial in an amount that is not less than $35,001.00.” (Id. ¶ 33.)
7 Plaintiffs originally filed suit in San Joaquin County Superior Court but
8 Defendant removed this action to federal court on the basis of diversity jurisdiction.
9 (See Not. of Removal (ECF No. 1.).) Plaintiffs now move for the Court to remand this
10 action on the grounds that Defendant has not shown that the amount in controversy
11 requirement for diversity jurisdiction is satisfied. (See Mot.) Defendant separately
12 moves to dismiss Plaintiff’s Complaint for failure to state a claim. The Court must first
13 address whether removal was proper and if it has subject matter jurisdiction over this
14 action.
15 II. Legal Standard
16 A case may be removed to federal court if that court would have original
17 jurisdiction over the matter, which generally requires asserting federal question
18 jurisdiction under 28 U.S.C. § 1331 or diversity jurisdiction under 28 U.S.C. § 1332.
19 See 28 U.S.C. § 1441; Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009)
20 (quoting Ansley v. Ameriquest Mortg. Co., 340 F.3d 858, 861 (9th Cir. 2003) (citation
21 omitted)). “However, it is to be presumed that a cause lies outside the limited
22 jurisdiction of the federal courts and the burden of establishing the contrary rests
23 upon the party asserting jurisdiction.” Hunter, 582 F.3d at 1042 (quoting Abrego
24 Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (citation omitted))
25 (internal quotation marks and alterations omitted). As a result, “[t]he ‘strong
26 presumption against removal jurisdiction means that the defendant always has the
27 burden of establishing that removal is proper,’ and that the court resolves all
28 ambiguity in favor of remand to state court.” Id. (quoting Gaus v. Miles, Inc., 980 F.2d 1 564, 566 (9th Cir. 1992) (per curiam) (internal quotation marks omitted)).
2 In order for the Court to have subject matter jurisdiction under 28 U.S.C.
3 § 1332, there must be complete diversity of citizenship of the parties and the amount
4 in controversy must exceed $75,000. Where removal on the basis of diversity is
5 challenged, the proponent of federal jurisdiction must establish by preponderance of
6 the evidence that the amount in controversy exceeds $75,000. Sanchez v.
7 Monumental Life Ins., 102 F.3d 398, 404 (9th Cir. 1996).
8 III. Discussion
9 In removing this action, Defendant calculated the amount in controversy in two
10 main steps. First, Defendant asserted Plaintiffs’ complaint sought actual damages of
11 $30,581.98 in restitution by taking the price of the vehicle as stated in the Retail Sales
12 Installment Contract (see ECF No. 1-2, Ex. E), adding the amount paid in finance
13 charges, and subtracting the price of the optional service contract and a milage
14 deduction as a “reasonable allowance” for use of the vehicle. (Not. of Removal ¶ 20.)
15 Defendant then added two times the amount of actual damages in civil penalties
16 based on Plaintiffs’ claim that they were entitled to civil penalties under the Song-
17 Beverly Warranty Act. (Id. at 21.) Based on this, Defendant argued that Plaintiffs’
18 complaint asserted an amount in controversy of $91,745.94. (Id.) Defendant also
19 contended that the amount in controversy is satisfied on the face of the complaint and
20 that the attorney’s fees requested by Plaintiffs would bring this case within the
21 $75,000.00 amount in controversy.
22 Plaintiffs’ Motion contests whether removal was proper under diversity
23 jurisdiction based on a failure to satisfy the amount in controversy requirement.1 Most
24 relevant are Plaintiffs’ factual attacks on Defendant’s calculation of actual damages
25 and attorney’s fees as well as Plaintiffs’ challenge to Defendant’s statement that
26 diversity is satisfied on the face of Plaintiffs’ Complaint.
28 1 Plaintiffs do not contest the parties’ diversity, only the amount in controversy. 1 A. Actual Damages
2 Plaintiffs first contend that Defendant improperly calculated actual damages by
3 using the total price of the vehicle from the Retail Sales Installment Contract to
4 calculate Plaintiffs’ actual damages. Plaintiffs argue Defendant failed to present
5 “essential facts about the purchase price” including whether Plaintiff made all interest
6 payments on the vehicle. (Mot. at 7.) Because section 1793.2 permits recovery based
7 on “the actual price paid” by a purchaser, other courts have rejected calculations of
8 actual damages based on the total cost of the vehicle where the vehicle was financed,
9 and the defendant failed to establish by a preponderance of the evidence that all
10 payments had been made and finance charges paid. See Savall v. FCA US LLC, No.
11 21-cv-00195-JM-KSC, 2021 WL 1661051, at *2 (S.D. Cal. Apr. 28, 2021).
12 Defendant argues that this would “transfer an unreasonable and impossible
13 burden on Defendant” to determine whether Plaintiff had made all payments within
14 the time for removal. (Opp’n (ECF No. 21) at 6.) But on removal, it is Defendant’s
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
11 EDUARDO BARBOZA, et al., No. 2:23-cv-02314-DJC-JDP
12 Plaintiffs, v. 13 ORDER FCA US, LLC, 14 Defendant. 15 16
17 Plaintiffs Eduardo Barboza and Joanna Castellano have filed the present action
18 against Defendant FCA US, LLC based on allegations that Defendant knowingly sold
19 Plaintiffs a vehicle with a transmission that contained one or more defects. After this
20 suit was originally filed in the San Joaquin County Superior Court, Defendant removed
21 it to this court on the basis of diversity jurisdiction. Plaintiffs now seek to have the
22 action remanded to the state court and Defendant asks that the Court dismiss 23 Plaintiffs’ Complaint for failure to state a claim. 24 For the reasons stated below, Plaintiffs’ Motion to Remand (Mot. (ECF No. 18)) 25 is granted and Defendant’s Motion to Dismiss (ECF No. 6) is denied as moot. 26 I. Background 27 Plaintiffs allegedly entered into a warranty contract with Defendant for a 2016 28 Chrysler 200 vehicle. Plaintiffs claim that Defendant failed to service or repair defects 1 in the vehicle, most specifically a “transmission defect,” despite the presence of
2 express and implied warranties. Plaintiffs bring causes of action for violations of Civil
3 Code sections 1793.2(a)(3), (b), and (d) as well as causes of action for fraudulent
4 inducement and violation of the implied warranty. (Compl. (ECF No. 1-2, Ex. A) at 8–
5 13.) Plaintiffs allege that as a result of Defendant’s actions “Plaintiffs suffered damages
6 in a sum to be proven at trial in an amount that is not less than $35,001.00.” (Id. ¶ 33.)
7 Plaintiffs originally filed suit in San Joaquin County Superior Court but
8 Defendant removed this action to federal court on the basis of diversity jurisdiction.
9 (See Not. of Removal (ECF No. 1.).) Plaintiffs now move for the Court to remand this
10 action on the grounds that Defendant has not shown that the amount in controversy
11 requirement for diversity jurisdiction is satisfied. (See Mot.) Defendant separately
12 moves to dismiss Plaintiff’s Complaint for failure to state a claim. The Court must first
13 address whether removal was proper and if it has subject matter jurisdiction over this
14 action.
15 II. Legal Standard
16 A case may be removed to federal court if that court would have original
17 jurisdiction over the matter, which generally requires asserting federal question
18 jurisdiction under 28 U.S.C. § 1331 or diversity jurisdiction under 28 U.S.C. § 1332.
19 See 28 U.S.C. § 1441; Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009)
20 (quoting Ansley v. Ameriquest Mortg. Co., 340 F.3d 858, 861 (9th Cir. 2003) (citation
21 omitted)). “However, it is to be presumed that a cause lies outside the limited
22 jurisdiction of the federal courts and the burden of establishing the contrary rests
23 upon the party asserting jurisdiction.” Hunter, 582 F.3d at 1042 (quoting Abrego
24 Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (citation omitted))
25 (internal quotation marks and alterations omitted). As a result, “[t]he ‘strong
26 presumption against removal jurisdiction means that the defendant always has the
27 burden of establishing that removal is proper,’ and that the court resolves all
28 ambiguity in favor of remand to state court.” Id. (quoting Gaus v. Miles, Inc., 980 F.2d 1 564, 566 (9th Cir. 1992) (per curiam) (internal quotation marks omitted)).
2 In order for the Court to have subject matter jurisdiction under 28 U.S.C.
3 § 1332, there must be complete diversity of citizenship of the parties and the amount
4 in controversy must exceed $75,000. Where removal on the basis of diversity is
5 challenged, the proponent of federal jurisdiction must establish by preponderance of
6 the evidence that the amount in controversy exceeds $75,000. Sanchez v.
7 Monumental Life Ins., 102 F.3d 398, 404 (9th Cir. 1996).
8 III. Discussion
9 In removing this action, Defendant calculated the amount in controversy in two
10 main steps. First, Defendant asserted Plaintiffs’ complaint sought actual damages of
11 $30,581.98 in restitution by taking the price of the vehicle as stated in the Retail Sales
12 Installment Contract (see ECF No. 1-2, Ex. E), adding the amount paid in finance
13 charges, and subtracting the price of the optional service contract and a milage
14 deduction as a “reasonable allowance” for use of the vehicle. (Not. of Removal ¶ 20.)
15 Defendant then added two times the amount of actual damages in civil penalties
16 based on Plaintiffs’ claim that they were entitled to civil penalties under the Song-
17 Beverly Warranty Act. (Id. at 21.) Based on this, Defendant argued that Plaintiffs’
18 complaint asserted an amount in controversy of $91,745.94. (Id.) Defendant also
19 contended that the amount in controversy is satisfied on the face of the complaint and
20 that the attorney’s fees requested by Plaintiffs would bring this case within the
21 $75,000.00 amount in controversy.
22 Plaintiffs’ Motion contests whether removal was proper under diversity
23 jurisdiction based on a failure to satisfy the amount in controversy requirement.1 Most
24 relevant are Plaintiffs’ factual attacks on Defendant’s calculation of actual damages
25 and attorney’s fees as well as Plaintiffs’ challenge to Defendant’s statement that
26 diversity is satisfied on the face of Plaintiffs’ Complaint.
28 1 Plaintiffs do not contest the parties’ diversity, only the amount in controversy. 1 A. Actual Damages
2 Plaintiffs first contend that Defendant improperly calculated actual damages by
3 using the total price of the vehicle from the Retail Sales Installment Contract to
4 calculate Plaintiffs’ actual damages. Plaintiffs argue Defendant failed to present
5 “essential facts about the purchase price” including whether Plaintiff made all interest
6 payments on the vehicle. (Mot. at 7.) Because section 1793.2 permits recovery based
7 on “the actual price paid” by a purchaser, other courts have rejected calculations of
8 actual damages based on the total cost of the vehicle where the vehicle was financed,
9 and the defendant failed to establish by a preponderance of the evidence that all
10 payments had been made and finance charges paid. See Savall v. FCA US LLC, No.
11 21-cv-00195-JM-KSC, 2021 WL 1661051, at *2 (S.D. Cal. Apr. 28, 2021).
12 Defendant argues that this would “transfer an unreasonable and impossible
13 burden on Defendant” to determine whether Plaintiff had made all payments within
14 the time for removal. (Opp’n (ECF No. 21) at 6.) But on removal, it is Defendant’s
15 burden to show that the Court has subject matter jurisdiction. Sanchez, 102 F.3d at
16 404. Moreover, Defendant may present evidence in response to a motion to remand
17 establishing that removal is appropriate. Ibarra v. Manheim Investments, Inc., 775 F.3d
18 1193, 1197 (9th Cir. 2015) (“The parties may submit evidence outside the complaint,
19 including affidavits or declarations, or other summary-judgment-type evidence
20 relevant to the amount in controversy at the time of removal.” (internal citations and
21 quotation marks removed)). Despite the opportunity to do so in opposing the present
22 Motion, Defendant has failed to provide any evidence that shows what portion of the
23 purchase price Plaintiffs paid. Defendant also argues that based on the original Retail
24 Sales Installment Contract, Plaintiff’s final payment was due on September 7, 2023,
25 and that the Court “may take the reasonable inference that the financial charges have
26 been paid.” (Opp’n at 6.) This is well beyond the “reasonable inference” that
27 Defendant suggests. The Retail Sales Installment Contract was signed on September
28 7, 2016. (See ECF No. 1-2, Ex. E at 2.) Defendants ask the Court to assume — without 1 any support from the Complaint or evidence provided by Defendant — that all
2 payments were made in the time originally proscribed in a document signed seven
3 years before the scheduled final payment date. This ignores the multitude of possible
4 intervening events that altered the terms of the loan and affected whether Plaintiffs
5 have, at the time of filing this suit, paid the full original value of the vehicle.
6 Defendant’s calculation of actual damages using the full purchase price is thus
7 unsupported by a preponderance of the evidence.
8 Plaintiffs also contend that the calculation of the mileage deduction is entirely
9 speculative. Defendant calculated the mileage offset based on an assumption “that
10 Plaintiffs will argue the first attempted repair occurred on August 14, 2018, at 32,749
11 miles[,]” minus the 21 miles at delivery. Defendant then divided that number by
12 120,000 and multiplied it by the purchase price. (Not. of Removal at 6 n.1; Opp’n at 5
13 n.1.) However, Defendant provides absolutely no justification for the assumption that
14 the first attempted repair occurred on August 14, 2018. Plaintiffs’ Complaint does not
15 identify any specific date when relevant service occurred. Defendants have not
16 provided any evidence that the service allegedly provided on August 14, 2018 was at
17 all related to the transmission defect at issue in this action, what the mileage was at the
18 time of the alleged service, or even that the vehicle was serviced at all on that date.
19 The only mention of service occurring on that date that the Court can find in any
20 document before it is this statement in the Motion which is contained within a footnote
21 with no citation or additional context provided. In their Opposition, Defendant argues
22 that Plaintiffs “offer no explanation as to why they disagree with Defendant’s
23 calculation and offer no proof to support that disagreement.” (Opp’n at 6.) But
24 Plaintiffs are not obligated to do either, even when engaged in a factual challenge to
25 removal. “A factual attack . . . need only challenge the truth of the defendant's
26 jurisdictional allegations by making a reasoned argument as to why any assumptions
27 on which they are based are not supported by evidence.” Harris v. KM Indus., Inc., 980
28 F.3d 694, 700 (9th Cir. 2020). Again, it is Defendant’s burden to show that removal is 1 appropriate. Defendant’s calculations of the mileage offset appear to be entirely
2 unsupported by the Complaint or any evidence.
3 In short, Defendant has calculated what they believe to be Plaintiffs’ actual
4 damages based on unsupported speculation regarding both the actual price paid by
5 Plaintiffs and the mileage offset to be applied to that amount. Defendants have failed
6 to show by preponderance of the evidence that these calculations are valid and thus
7 they are insufficient to satisfy the amount in controversy requirement for diversity
8 jurisdiction.
9 B. Civil Penalties
10 As noted, Defendant also relied on potential civil penalties of two times the
11 actual damages to reach the amount in controversy. Civil penalties under the Song-
12 Beverley Warranty Act are properly included within the calculation of the amount in
13 controversy. See Newsome v. FCA US LLC, No. 1:20-cv-01189-JLT-BAK, 2022 WL
14 408631, at *5 (E.D. Cal. Deb. 10, 2022). But the calculation of these penalties is reliant
15 on the actual damages at issue. Given Defendant’s assertion that Plaintiffs’ actual
16 damages amount to $30,581.98 is unsupported, this amount cannot be used to
17 calculate civil penalties. Defendant argues that the civil penalties can still be
18 calculated from the statement in the Complaint that Plaintiffs “suffered damages . . . in
19 an amount that is not less than $35,001.00[,]” by assuming that actual damages cannot
20 be less than that amount. (Compl. ¶ 33.; see Opp’n at 8–9.)
21 District courts in California are split about whether “damages” allegations in
22 similar cases should be read to refer to total damages or actual damages. See
23 Newsome, 2022 WL 408631, at *3 (collecting cases). However, any doubt as to
24 whether removal is appropriate must resolved in favor of remand. Moore-Thomas v.
25 Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (“The removal statute is
26 strictly construed, and any doubt about the right of removal requires resolution in
27 favor of remand.”). Where other courts have found an allegation of minimum
28 damages to be a reference to actual damages, they typically rely on some further 1 evidence that this is the case. Here, there is nothing in the Complaint or otherwise to
2 indicate that the referenced damages suffered by Plaintiffs are actual damages.
3 Throughout the Complaint, Plaintiffs make multiple references to “actual
4 damages” when discussing their right to civil penalties. (See, e.g., Compl. ¶¶ 52–53,
5 59, 62.) These allegations are distinct from the relevant allegation in paragraph 33
6 which simply alleges that the “damages” exceed $35,001.00. (Id. ¶ 33.) Unlike other
7 cases, this damages allegation is also not proximate to the civil penalty allegations
8 within the Complaint. See Coronel v. Ford Motor Co., 2020 WL 550690, at *6 (C.D.
9 Cal. Feb. 4, 2020) (finding a “damages” allegation to refer to actual damages where
10 the following paragraph added that the plaintiff sought additional civil penalties).
11 Instead, the damages allegation here is found in a separate section with no clear
12 connection to the civil penalty allegations. In reality, the $35,001.00 damages
13 allegation seems intended to simply place this case over the amount necessary for it
14 to qualify as an unlimited civil action in California state court. See Cal. Civ. Proc. Code
15 sections 86, 88.
16 Thus, there is no evidence to suggest that the allegation that Plaintiffs claimed
17 $35,001.00 in damages is a reference to actual damages. Accordingly, the Court
18 construes Plaintiffs’ statement of their damages in the Complaint as a reference to
19 total damages. See Rodriguez v. Ford Motor Co., No. 5:22-cv-01056-SSS-MAAx, 2022
20 WL 4653660, at *4 (C.D. Cal. Sept. 30, 2022) (finding an allegation that Plaintiff had
21 suffered at least $25,001.00 in damages to be insufficient to establish actual damages
22 of at least that number); see also Mpock v. FCA US LLC, No. 1:21-cv-00330-NONE-
23 SAB, 2021 WL 5356472, at *8 (E.D. Cal. Nov. 17, 2021). Thus, this allegation is
24 insufficient alone to meet the amount in controversy requirement as it encompasses
25 both actual damages and civil penalties.
26 C. Attorney’s Fees
27 Defendant argues that as Plaintiffs seek attorney’s fees, this also can satisfy the
28 amount in controversy requirement. Attorney’s fees are properly considered as part 1 of the amount in controversy,2 though the proponent of diversity jurisdiction “retains
2 the burden of proving . . . the amount of future attorneys’ fees by a preponderance of
3 the evidence.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927–28 (9th Cir.
4 2019). Via a declaration from counsel provided with the Notice of Removal,
5 Defendant represents that “claims for attorneys’ fees through litigation commonly
6 exceed $25,000.00.” (See Skanes Decl. (ECF No. 1-2) ¶ 11.) Defendant also notes
7 that counsel for Plaintiffs previously sought $108,135.31 in fees for another case of this
8 type. (Id.)
9 As discussed above, the Complaint states that Plaintiffs suffered at least
10 $35,001.00 in damages. This is construed by the Court to be an allegation regarding
11 the minimum amount of Plaintiffs’ total damages. The Court need not address
12 whether Defendant’s allegation that attorney’s fees commonly exceed $25,000.00 is
13 sufficient as, even if it were, $35,001.00 in damages and $25,000.00 in attorney’s fees
14 would only create $60,001.00 in controversy and not meet the $75,000.00 threshold.
15 Defendant is thus reliant on the single allegation that Plaintiffs’ Counsel previously
16 sought $108,135.31 in attorney’s fees in a “similar matter” to the present case.
17 (Skanes Decl. ¶ 11; see Not. of Removal ¶ 23.) This is far too speculative to support
18 the Court apply a similar attorney’s fee in calculating the amount in controversy in this
19 action.
20 Defendant has not provided any additional information on that action and the
21 only document from that case provided by Defendant is Counsel’s motion for
22 attorney’s fees. (See Skanes Decl. ¶ 11; ECF No. 1-2, Ex. F.) Review of that motion
23 shows the requested attorney’s fees were made following a settlement of
24 $150,000.00, with an established total vehicle purchase price of nearly $50,000.00
25 2 Plaintiffs incorrectly suggest that there remains a split within the Ninth Circuit about whether attorney’s 26 fees are properly included within the amount of controversy. The Ninth Circuit firmly resolved the apparent split in Arias v. Residence Inn by Marriott, stating that where there exists a statutory right to 27 future attorney’s fees, as they are here, see Civil Code section 1794(d), (e)(1), those fees should be included in assessing whether the amount in controversy requirement has been met. 936 F.3d 920, 28 927–28 (9th Cir. 2019). 1 | (ECF No. 1-2, Ex. F at 2-4.) Even if Plaintiffs here did pay the full amount of the vehicle 2 || in this action, their actual damages would be nearly half that of the plaintiffs in this 3 | other action. The motion also included a request for application of a multiplier; 4 | something which is necessarily only awarded in cases outside the norm. (/d. at 11.) 5 | Most importantly, the Motion provided by Defendant simply establishes what 6 | Plaintiffs’ Counsel requested the court in that action award in attorney's fees. 7 | Defendant does not include any evidence or make any representation as to what 8 | attorney's fees were actually awarded by the Court. Even from the information within 9 || the Motion provided, it is clear that there are factual differences between the two 10 | cases that make this single comparison insufficient to establish those requested fees 11 | as applicable here. 12 Accordingly, the Court finds that Defendant has not met their burden to show 13 | that the attorney’s fees requested in this other action would be sufficient, when added 14 | with the damages allegation, to reach the amount in controversy threshold. See 15 | Mpock v. FCA US LLC, No. 1:21-cv-00330-NONE-SAB, 2021 WL 5356472, *13 (E.D. 16 || Cal. Feb. 17, 2021). 17 | IV. Conclusion 18 Defendant has not shown that the amount in controversy requirement has been 19 | met for diversity jurisdiction. As such, Plaintiffs’ Motion to Remand (ECF No. 18) is 20 | GRANTED and this action is REMANDED to the San Joaquin County Superior Court. 21 | Defendant's Motion to Dismiss (ECF No. 6) is DENIED AS MOOT. 22 53 IT IS SO ORDERED. 24 | Dated: _ February 18, 2025 “Daniel CoD batt Hon. Daniel Lt Cod 25 UNITED STATES DISTRICT JUDGE 26 27 28