David C Loudermilk v. FCA US, LLC

• Court: District Court, C.D. California
• Decided: September 29, 2025
• Docket: 5:24-cv-02261
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 ) 11 DAVID C. LOUDERMILK, et al. ) Case No. 5:24-cv-02261-CV (SHKx) ) 12 ) ORDER DENYING PLAINTIFFS’ ) MOTION TO REMAND 13 Plaintiffs, ) [DOC. # 15] 14 v. ) ) ) 15 FCA US, LLC, et al., ) ) 16 ) Defendants. ) 17 18 On November 22, 2024, Plaintiffs David C. Loudermilk and Jolene M. Loudermilk 19 (collectively, “Plaintiffs”) filed a Motion to Remand (“Motion”). Doc. # 15. On 20 December 18, 2024, Defendant FCA US, LLC (“Defendant”) filed an opposition to the 21 Motion. Doc. # 18 (“Opp.”). On December 24, 2024, Plaintiffs filed a reply brief. Doc. # 22 19. 23 On February 6, 2025, the Court issued its reassignment order, which vacated the 24 hearing date for this Motion. Doc. # 29. The Court now finds that oral argument is not 25 necessary to resolve the Motion. See Fed. R. Civ. P. 78(b); C.D. Cal. L. Civ. R. 7-15; 26 Willis v. Pac. Mar. Ass’n, 244 F.3d 675, 684 n. 2 (9th Cir. 2001). Having considered the 27 briefing, the Court DENIES the Motion. 28 1 I. BACKGROUND 2 Plaintiffs filed their Complaint in San Bernardino County Superior Court on 3 September 10, 2024. Doc. # 1-1 (“Compl.”). Plaintiffs alleged that, on or about August 4 13, 2016, they entered into a warranty contract with Defendant regarding a 2016 Ram 5 1500 vehicle. Compl. ¶ 7. The Complaint asserts four causes of action: three for different 6 violations of California’s Song-Beverly Consumer Warranty Act (“Song-Beverly Act”) 7 and a cause of action for breach of the implied warranty of merchantability pursuant to 8 sections 1791.1, 1794, and 1795.5 of the California Civil Code. Id. ¶¶ 34–52. Plaintiffs 9 seek damages, restitution, a civil penalty in the amount of two times Plaintiff’s actual 10 damages, prejudgment interest, attorney fees and costs, and other relief that the Court 11 deems proper. Id. at Prayer for Relief. 12 On October 23, 2024, Defendant filed a Notice of Removal, invoking this Court’s 13 diversity jurisdiction pursuant to 28 U.S.C. § 1332. Doc. # 1 ¶ 12. Plaintiff now moves to 14 remand this action back to state court. See generally Doc. # 15; Memorandum of Points 15 and Authorities in Support of Plaintiffs’ Motion, Doc. # 15-1 (“Mot.”). 16 II. LEGAL STANDARD 17 “Federal courts are courts of limited jurisdiction. They possess only that power 18 authorized by Constitution and statute . . . It is to be presumed that a cause lies outside 19 this limited jurisdiction . . . and the burden of establishing the contrary rests upon the 20 party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 21 377 (1994) (internal citations omitted). A defendant may remove an action from state 22 court to federal court only if the federal court has subject matter jurisdiction over the 23 action. 28 U.S.C. § 1441(a). Under 28 U.S.C. § 1332(a), a federal court has subject 24 matter jurisdiction when (1) the dispute is between “citizens of different States,” and (2) 25 the amount in controversy “exceeds the sum or value of $75,000, exclusive of interest 26 and costs.” 27 // 28 // 1 III. DISCUSSION 2 Plaintiffs do not dispute that complete diversity between the parties exists, and thus 3 the Court considers that requirement satisfied. See Ehrman v. Cox Commc’ns, Inc., 932 4 F.3d 1223, 1228 (9th Cir. 2019) (“[W]hen a defendant’s allegations of citizenship are 5 unchallenged, nothing more is required”). However, Plaintiffs argue that the Court lacks 6 subject matter jurisdiction because Defendant has not sufficiently shown that the amount 7 in controversy exceeds $75,000. See Mot. at 10–24.1 8 In determining the amount in controversy, courts first look to whether the 9 complaint alleges on its face “damages in excess of the required jurisdictional minimum.” 10 Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 402 (9th Cir. 1996). If the complaint 11 alleges on its face damages that equal or exceed $75,000, the amount pled controls unless 12 it appears to a “legal certainty” that the claim is for less than $75,000. Id. at 401–404. 13 However, if the amount pled is “unclear or ambiguous” or is less than $75,000, “the 14 removing defendant bears the burden of establishing, by a preponderance of the evidence, 15 that the amount in controversy exceeds the jurisdictional threshold.” Fritsch v. Swift 16 Transportation Co. of Arizona, LLC, 899 F.3d 785, 793 (9th Cir. 2018) (citing Urbino v. 17 Orkin Servs. of California, Inc., 726 F.3d 1118, 1122 (9th Cir. 2013)). 18 “The amount in controversy is simply an estimate of the total amount in dispute, 19 not a prospective assessment of [the] defendant’s liability.” Lewis v. Verizon Commc’ns, 20 Inc., 627 F.3d 395, 400 (9th Cir. 2010). Accordingly, in assessing the amount in 21 controversy, a court must “assume that the allegations of the complaint are true and 22 assume that a jury will return a verdict for the plaintiff on all claims made in the 23 complaint.” Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 24 993, 1001 (C.D. Cal. 2002) (citation modified). At the same time, “a defendant cannot 25 establish removal jurisdiction by mere speculation and conjecture, with unreasonable 26 assumptions.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). Courts 27

28 1 All record citations in this Order reflect CM/ECF pagination. 1 strictly construe the removal statutes, rejecting removal jurisdiction in favor of remand to 2 the state court if any doubt as to the right of removal exist. Martinez v. Am.’s Wholesale 3 Lender, 764 F. App’x 592 (9th Cir. 2019) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 4 (9th Cir. 1992). 5 Here, the Complaint alleges damages “in an amount that is not less than $35,001” 6 and is thus ambiguous as to whether the amount in controversy exceeds $75,000. Compl. 7 ¶ 21. Although Defendant asserts that $35,001 should be read as a “floor, not a cap,” that 8 argument, even if correct, does not establish that the Complaint alleges on its face 9 damages exceeding the jurisdictional threshold. See Opp. at 4–5. Accordingly, Defendant 10 must establish by a preponderance of the evidence that the amount in controversy 11 exceeds $75,000. 12 Defendant argues that it has met this burden. See id. at 3–4. First, Defendant points 13 to the Manufacturers Suggested Retail Price (“MSRP”) of Plaintiff’s subject vehicle of 14 $35,340 as representing Plaintiff’s potential actual damages. Id. at 3. Second, Defendant 15 asserts that the Complaint alleges civil penalties that could potentially amount to an 16 additional $70,680, or two times the number of actual damages. Id. Third, Defendant 17 estimates that Plaintiff could be awarded approximately $25,000 in attorney fees. 18 Combined, the potential actual damages, civil penalties, and attorney fees exceed the 19 $75,000 threshold. Id. at 3–4. 20 In contrast, Plaintiffs argue that Defendant’s asserted potential actual damages of 21 $35,340 is speculative because Defendant failed to consider “essential facts about the 22 purchase price and use” of the vehicle. Mot. at 9 (emphasis omitted). Such essential facts 23 include whether Plaintiff had made any installment payments on the vehicle or whether 24 Defendant accounted for the “mileage offset”—or the “amount directly attributable to use 25 by the buyer prior to the discovery of the nonconformity”—which needs to be subtracted 26 from the purchase price to calculate actual damages under the Song-Beverly Act. Id. at 27 13–18. Plaintiffs also assert that Defendant cannot simply assume civil penalties are 28 included in the amount in controversy without pointing to specific facts in the Complaint 1 or other evidence showing that such penalties are appropriate. Id. at 18–21. Finally, 2 Plaintiffs argue that Defendant’s calculation of potential attorney fees is purely 3 speculative and should not be considered. Id. at 21–24. 4 These three disputed categories of damages—actual damages, civil penalties, and 5 attorney fees—are analyzed in greater detail below. 6 A. Actual Damages 7 Under the Song-Beverly Act, if a vehicle manufacturer is unable to “conform [the 8 vehicle] to the applicable express warranties after a reasonable number of attempts,” the 9 manufacturer must either “promptly replace the new motor vehicle” or “promptly make 10 restitution to the buyer.” Cal. Civ. Code § 1793.2(d). Restitution is measured by the 11 “amount equal to the actual price paid or payable [for the vehicle] by the buyer,” less the 12 reduction in value to the vehicle “directly attributable to use by the buyer prior to the time 13 the buyer first delivered the vehicle to the manufacturer or distributor . . . for correction 14 of the problem that gave rise to the nonconformity.” Cal. Civ. Code § 1793.2(d)(2)(B)– 15 (C). The calculation of restitution also excludes “nonmanufacturer items installed by a 16 dealer or the buyer.” Id.; see also Alvarado v. FCA US, LLC, Case No. 5:17-cv-00505- 17 JGB (DTBx), 2017 WL 2495495, at *4 (C.D. Cal. Jun. 8, 2017). 18 In calculating restitution under the Song-Beverly Act, the starting point is to 19 determine the “actual price paid or payable [for the vehicle] by the buyer[.]” Cal. Civ. 20 Code § 1793.2(d). If a plaintiff has been paying for the vehicle in installments, only the 21 installments actually paid would be included in the amount. See Salazar v. Ford Motor 22 Co., No. 2:21-CV-06756-FLA (JPRx), 2022 WL 16855563, at *2 (C.D. Cal. Nov. 10, 23 2022). However, if the record does not show whether a plaintiff has made all installment 24 payments for the amount financed, courts have found that the total “cash price” listed in a 25 Retail Installment Sale Contract is a reasonable estimate of “the actual price paid or 26 payable.” See id.; Stupin v. Gen. Motors LLC, No. 2:23-cv-06943-SVW (MAAx), 2024 27 WL 811706, at *3 (C.D. Cal. Feb. 27, 2024); Messih v. Mercedes-Benz USA, LLC, Case 28 1 No. 3:21-cv-03032-WHO, 2021 WL 2588977, at *4 (N.D. Cal. June 24, 2021) (collecting 2 cases). 3 Once the actual price paid or payable has been established, the next step in 4 calculating restitution is to reduce the cash price by a “mileage offset,” which accounts 5 for the vehicle’s reduction in value attributable to use by the plaintiff prior to the first 6 repair or attempted repair, as required by Cal. Civ. Code § 1793.2(d)(2)(C). See Messih, 7 2021 WL 2588977, at *5. The mileage offset is determined by multiplying the “actual 8 price of the new motor vehicle paid or payable by the buyer . . . by a fraction having as its 9 denominator 120,000 and having as its numerator the number of miles traveled by the 10 new motor vehicle prior to the time the buyer delivered the vehicle” for correction of the 11 defect. Cal. Civ. Code § 1793.2(d)(2)(C). However, courts in this district are split as to 12 whether defendants must submit evidence of the mileage offset to establish the amount in 13 controversy at the motion to remand stage. Compare Tucker v. FCA US LLC, No. CV 21- 14 2908-GW (MAAx), 2021 WL 3733243, at *3 (C.D. Cal. Aug. 23, 2021) (“[M]ileage- 15 offsets and vehicle-value reductions are not appropriate for consideration for amount-in- 16 controversy purposes.”), with Quinones v. FCA US LLC, No. 2:20-cv-06144-RGK 17 (JPRx), 2020 WL 4437482, at *1 (C.D. Cal. July 31, 2020) (“Without information about 18 [p]laintiff’s use of the vehicle (such as the number of miles driven), the Court is left with 19 considerable doubt as to the amount in controversy.”); see also Selinger v. Ford Motor 20 Co., No. 2:22-cv-08883-SPG (KSx), 2023 WL 2813510, at *6–*8 (C.D. Cal. Apr. 5, 21 2023) (collecting cases). 22 Here, Defendant states the Manufacturer Suggested Retail Price (“MSRP”) for 23 vehicles similar to the subject vehicle is $35,340. Opp. at 3. This number encompasses 24 the $30,280 suggested base price for the vehicle, plus an additional $5,060 in options and 25 a “destination charge.” Declaration of James Sheridan in Support of Defendant’s Notice 26 of Removal of Entire Case (Doc. # 1-3) at ¶ 7. Although Defendant did not provide a 27 Retail Installment Sale Contract, the Court finds that the MSRP is a reasonable estimate 28 of the total cash price for the vehicle. See Mireles v. Gen. Motors LLC, No. 5:23-cv- 1 01717-SSS (JPRx), 2023 WL 8320321, at *1, *3 n.3 (C.D. Cal. Nov. 30, 2023) (finding 2 MSRP “to be a proper estimate of the value of the contract”). Moreover, the MSRP is a 3 reasonable estimate of the actual price paid since the record does not show whether 4 Plaintiffs have made installment payments or paid the full cash price of the vehicle. For 5 purposes of this Motion, the Court will use the $30,280 base price as the starting point for 6 calculating potential restitution. 7 Furthermore, this Court agrees with the courts in this district that have held that the 8 actual price paid need not be reduced by the mileage offset in calculating the amount in 9 controversy. In so holding, the Court notes that the mileage offset is an affirmative 10 defense that Defendant may or may not raise at trial. See Selinger, 2023 WL 2813510, at 11 *8. The mileage offset defense is “not automatically applied”; rather, it reduces 12 Defendant’s liability only if Defendant affirmatively and successfully raises the defense. 13 Id. Considering such affirmative defenses in calculating the amount in controversy is 14 improper at this stage because the Court is merely concerned with the “maximum 15 recovery” that Plaintiffs can reasonably recover at the time of removal, Arias v. 16 Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (emphasis omitted), not the 17 “likely liability” in light of a defense that may or may not be raised at a later stage of the 18 proceedings. Greene v. Harley-Davidson, Inc., 965 F.3d 767, 774 (9th Cir. 2020) 19 (holding that affirmative defenses are “irrelevant to determining the amount that is at 20 stake in the litigation.”); see also Geographic Expeditions, Inc. v. Est. of Lhotka ex rel. 21 Lhotka, 599 F.3d 1102, 1108 (9th Cir. 2010) (“[I]f a district court had to evaluate every 22 possible defense that could reduce recovery below the jurisdictional amount the district 23 court would essentially have to decide the merits of the case before it could determine if 24 it had subject matter jurisdiction.”); In re Ford Motor Co. DPS6 Powershift Transmission 25 Prods. Liab. Litig., No. 18-ml-02814 AB (FFMx), 2018 WL 5905942, at *4 (C.D. Cal. 26 Sept. 10, 2018) (“[T]he amount in controversy is established by what the plaintiff 27 demands, not by any reductions that a defendant might achieve through its defenses.”). 28 Requiring Defendant to submit evidence supporting a potential mileage offset defense 1 would, in this Court’s view, improperly convert the amount-in-controversy analysis into a 2 “prospective assessment of [D]efendant’s liability.” See Lewis, 627 F.3d at 400; see also 3 Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018) (explaining that the 4 amount in controversy is the “amount at stake in the underlying litigation . . . whatever 5 the likelihood that [plaintiff] will actually recover” that amount). 6 Accordingly, the Court finds that $30,280 is a reasonable estimate of the actual 7 damages in dispute at this stage. The Court next considers the potential civil penalties. 8 B. Civil Penalties 9 Under Cal. Civ. Code 1794(c), a consumer who purchased a defective good may 10 receive a civil penalty of up to “two times the amount of actual damages” if the 11 manufacturer’s failure to comply with the Song-Beverly Act was “willful.” Here, 12 Plaintiffs allege that Defendant’s conduct “was willful, in that Defendant [] and its 13 representative were aware that they were unable to service or repair the Vehicle to 14 conform to the applicable express warranties after a reasonable number of repair 15 attempts, yet Defendant [] failed and refused to promptly replace the Vehicle or make 16 restitution.” Compl. ¶ 37. Therefore, according to Plaintiffs, they “are entitled to a civil 17 penalty of two times Plaintiffs’ actual damages.” Id. 18 Like the mileage offset, courts “have varying views as to whether the maximum 19 civil penalties should be considered when deciding the amount in controversy.” 20 Verastegui v. Ford Motor Co., No. 19-cv-04806-BLF, 2020 WL 598516, at *3 (N.D. Cal. 21 Feb. 7, 2020) (collecting cases). For example, some courts refuse to consider civil 22 penalties unless the defendant submits evidence that the plaintiff would be entitled to 23 them. See Limon-Gonzalez v. Kia Motors Am., Inc., No. CV 20-4381-PA (JPRx), 2020 24 WL 3790838, at *3 (C.D. Cal. July 7, 2020) (“[S]imply assuming a civil penalty award is 25 inconsistent with the principle that the defendant must provide evidence that it is more 26 likely than not that the amount in controversy requirement is satisfied.”) (citation 27 modified). However, this Court finds that the maximum recoverable civil penalties 28 should be considered “because that is what Plaintiff[s] put in controversy” in alleging 1 Defendant’s willfulness. Selinger, 2023 WL 2813510, at *9 (quoting Verastegui, 2020 2 WL 598516, at *3); see also Cox v. FCA US LLC, Case No. 3:20-cv-03808-WHO, 2020 3 WL 5046103, at *2 (N.D. Cal. Aug. 24, 2020)); Canesco v. Ford Motor Co., 570 F. 4 Supp. 3d 872, 902–03 (S.D. Cal. 2021). Accordingly, the Court must assume Plaintiffs’ 5 allegations regarding Defendant’s willfulness are true and calculate “the maximum 6 recovery” Plaintiffs could reasonably recover based on those allegations, which, in this 7 case, is two times Plaintiffs’ potential actual damages. See Kenneth Rothschild, 199 F. 8 Supp. 2d at 1001 (explaining that a court must “assume that the allegations of the 9 complaint are true” in calculating the amount in controversy); Arias, 936 F.3d at 927 10 (explaining that “the amount in controversy reflects the maximum recovery the plaintiff 11 could reasonably recover” at the time of removal) (emphasis omitted). Furthermore, 12 Defendant should not have to “prove up its own liability” by submitting evidence of its 13 willfulness to establish subject matter jurisdiction. Selinger, 2023 WL 2813510, at *9; 14 see also Canesco, 570 F. Supp. 3d at 902 (“[T]his Court sides with the majority of courts 15 and more recent cases, which find civil penalties appropriate for inclusion in the 16 calculation of the amount in controversy without the defendant needing to ‘prove a case 17 against itself’ with respect to liability for civil penalties.”). 18 With the assumption that Plaintiffs’ potential actual damages are $30,280, the 19 amount in controversy includes potential civil penalties of $60,560. These numbers, 20 added together, equal $90,840 in potential liability. This number exceeds the 21 jurisdictional threshold of $75,000, and the amount in controversy requirement is 22 therefore satisfied. 23 C. Attorney Fees 24 Plaintiff’s Complaint also seeks reasonable attorney fees as authorized by Cal. Civ. 25 Code § 1794(d). See Compl. at Prayer for Relief. Prospective attorney fees are properly 26 included in the court’s assessment of the amount in controversy. See Arias, 936 F.3d at 27 922 (“[W]hen a statute or contract provides for the recovery of attorneys’ fees, 28 prospective attorney fees must be included in the assessment of the amount in 1 |/controversy.”); Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648-49 (9th 2 || Cir. 2016) (noting the amount in controversy includes “damages (compensatory, punitive, 3 || or otherwise) . . . as well as attorneys’ fees awarded under fee shifting statutes”). 4 Here, Defendant’s Senior Staff Counsel submitted a declaration in support of 5 ||Defendant’s Notice of Removal, stating that he has been responsible for managing 6 Defendant’s breach of warranty litigation in California since October 2018 and that, in 7 experience, it is common for plaintiffs to seek attorney fees in excess of $50,000. See 8 || Doc. # 1-3 1, 9. Defendant also cites multiple cases where similarly situated plaintiffs 9 || were awarded attorney fees exceeding $75,000. Id. { 10, Exs. 1-2 (Doc. ## 1-5, 1-6.) 10 || Plaintiffs, on the other hand, argue that Defendant’s estimate of attorney fees is 11 ||speculative and without justification. Mot. at 21-24. The Court, however, has no 12 || difficulty finding that Defendant has shown it is more likely than not that Plaintiffs 13 |}demand for attorney fees is sufficient to push the amount in controversy well over the 14 || jurisdictional threshold, to the extent it was not already met between actual damages and 15 |} civil penalties. 16 CONCLUSION 17 For the foregoing reasons, the Motion is DENIED. 18 19 IT IS SO ORDERED. 20 21 || DATED: 9/29/25 Yio V Alen? □ 22 Lig YNTHIA VALENZUELA 73 UNITED STATES DISTRICT JUDGE 24 25 26 27 28