Erin Smith v. FCA US LLC

• Court: District Court, C.D. California
• Decided: July 5, 2022
• Docket: 2:21-cv-05347
• Status: Unknown

Opinion

Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 1 of 10 Page ID #:665

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ERIN SMITH, Case No. 2:21-cv-05347-FLA (GJSx) 12 Plaintiff, ORDER DENYING PLAINTIFF’S 13 v. MOTION TO REMAND [DKT. 12] 14 15 FCA US, LLC, et al., Defendants. 16

18 RULING 19 Before the court is Plaintiff Erin Smith’s (“Plaintiff” or “Smith”) Motion to 20 Remand (“Motion”). Dkt. 12-1 (“Mot.”). Defendant FCA US, LLC (“Defendant” or 21 “FCA”) opposes the Motion. Dkt. 14 (“Opp.”). 22 On September 21, 2021, the court found this matter appropriate for resolution 23 without oral argument and vacated the hearing set for September 24, 2021. Dkt. 16; 24 see Fed. R. Civ. P. 78(b); Local Rule 7-15. For the reasons stated herein, the court 25 DENIES Plaintiff’s Motion. 26 / / / 27 / / / 28

1 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 2 of 10 Page ID #:666

1 BACKGROUND 2 Plaintiff filed this action in Los Angeles Superior Court (“LASC”) on 3 September 24, 2020. Dkt. 5, Ex. A (“Compl.”) at 31. Plaintiff alleges she purchased 4 a Jeep Cherokee vehicle on or about June 24, 2017 that was manufactured and/or 5 distributed by Defendant. Compl. ¶ 9. The Complaint asserts causes of action for 6 breach of express and implied warranties under California’s Song-Beverly Consumer 7 Warranty Act (“Song-Beverly Act”), Cal. Civ. Code §§ 1790-1795, and fraudulent 8 inducement-concealment. See generally Compl. Plaintiff states she has “suffered 9 damages in a sum to be proven at trial in an amount that is not less than $25,001.00,” 10 Compl. ¶ 12. She seeks, inter alia, actual damages, restitution, a civil penalty in the 11 amount of two times Plaintiff’s actual damages, reasonable attorneys’ fees, and 12 punitive damages. See Compl., Prayer for Relief. 13 On July 1, 2021, Defendant filed a notice of removal, invoking this court’s 14 diversity jurisdiction pursuant to 28 U.S.C. § 1332. See generally Dkt. 1 (“NOR”). 15 Plaintiff now moves to remand to LASC. See Mot. 16 DISCUSSION 17 I. Plaintiff’s Request for Judicial Notice 18 Plaintiff requests the court take judicial notice of certain district court orders 19 remanding actions to state court. Dkt. 13. Plaintiff, however, fails to identify any 20 specific “fact … not subject to reasonable dispute” that the court may judicially 21 notice. Fed. R. Evid. 201; see also Pittman v. Wells Fargo Bank, N.A., No. 16-cv- 22 00348-GW (JEMx), 2016 WL 7507772, at *4 (C.D. Cal. Apr. 28, 2016), aff'd in part, 23 694 F. App’x 520 (9th Cir. 2017) (“Plaintiff appears to request judicial notice of these 24 opinions as legal authorities, and as such, there is no reason why judicial notice is 25 required.”). As the orders are not the proper subject of judicial notice, the court 26 DENIES Plaintiff’s request. The court will consider the decisions in its legal analysis 27 to the extent they are applicable. 28 / / /

2 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 3 of 10 Page ID #:667

1 II. Legal Standard 2 A defendant may remove an action from state court to federal court if the 3 plaintiff could have originally filed the action in federal court. See 28 U.S.C. 4 § 1441(a). Under 28 U.S.C. § 1332, a district court has original jurisdiction over a 5 civil action where (1) the amount in controversy exceeds the sum or value of $75,000, 6 exclusive of interest and costs, and (2) the dispute is between “citizens of different 7 States.” 8 When a complaint filed in state court alleges on its face “damages in excess of 9 the required jurisdictional minimum,” the amount pled controls unless it appears “to a 10 legal certainty” that the claim is for less than the jurisdictional amount. Sanchez v. 11 Monumental Life Ins. Co., 102 F.3d 398, 402-04 (9th Cir. 1996). “The complaint, 12 however, does not always state a specific sum.” Lewis v. Verizon Commc’ns, Inc., 13 627 F.3d 395, 399 (9th Cir. 2010). In the circumstances where it is “unclear or 14 ambiguous from the face of a state-court complaint whether the requisite amount in 15 controversy is pled, the removing defendant bears the burden of establishing, by a 16 preponderance of the evidence, that the amount in controversy exceeds the 17 jurisdictional threshold.” Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 18 F.3d 785, 793 (9th Cir. 2018) (citation omitted). “The amount in controversy is 19 simply an estimate of the total amount in dispute, not a prospective assessment of 20 [the] defendant’s liability.” Lewis, 627 F.3d at 400. Accordingly, in assessing the 21 amount in controversy, a court must “assume that the allegations of the complaint are 22 true and assume that a jury will return a verdict for the plaintiff on all claims made in 23 the complaint.” Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. 24 Supp. 2d 993, 1001 (C.D. Cal. 2002) (cleaned up). 25 Removability is determined based on the removal notice and the complaint as it 26 existed at the time of removal. See Miller v. Grgurich, 763 F.2d 372, 373 (9th Cir. 27 1985). The removing party need only include a “short and plain statement” setting 28 forth “a plausible allegation that the amount in controversy exceeds the jurisdictional

3 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 4 of 10 Page ID #:668

1 threshold.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 83, 89 2 (2014). Where the plaintiff contests the removing defendant’s allegations, however, 3 “both sides submit proof and the court decides, by a preponderance of the evidence, 4 whether the amount-in-controversy requirement has been satisfied.” Id. at 82. “Under 5 this system, a defendant cannot establish removal jurisdiction by mere speculation and 6 conjecture, with unreasonable assumptions.” Ibarra v. Manheim Invs., Inc., 775 F.3d 7 1193, 1197 (9th Cir. 2015). Courts strictly construe the removal statutes, rejecting 8 removal jurisdiction in favor of remand to the state court if any doubts as to the right 9 of removal exist. Nevada v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir. 2012). 10 III. Analysis1 11 Here, the parties dispute whether Defendant has demonstrated the amount in 12 controversy in this action exceeds $75,000. See Mot. 6-16; Opp. 8-20. 13 A. Legal Certainty Test 14 Defendant argues “it is evident from the face of the complaint” that the amount 15 in controversy exceeds $75,000 because Plaintiff alleges she suffered damages in an 16 amount “not less than $25,001.00”—which Defendant interprets as a measure of 17 Plaintiff’s actual damages—and Plaintiff seeks twice her actual damages as a civil 18 penalty and attorneys’ fees. Opp. 10. Plaintiff, on the other hand, maintains that the 19 $25,001.00 “damages” figure “refers to Plaintiff’s total damages, which include, inter 20 alia, (1) actual damages; (2) civil penalties; (3) attorneys’ fees; and (4) punitive 21 damages.” Mot. 6 (emphasis in original). According to Plaintiff, “it is unclear from 22 the face of the Complaint that the [jurisdictional] threshold is exceeded,” and thus 23 24

25 1 Plaintiff does not dispute that she and Defendant are citizens of different states. See 26 generally Mot. This is sufficient to establish diversity of citizenship pursuant to 28 27 U.S.C. § 1332. See Ehrman v. Cox Commc’ns, Inc., 932 F.3d 1223, 1228 (9th Cir. 2019) (noting “when a defendant’s allegations of citizenship are unchallenged, 28 nothing more is required”).

4 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 5 of 10 Page ID #:669

1 “Defendant must show by a preponderance of the evidence that the amount in 2 controversy exceeds $75,000.” Mot. 5. 3 The court agrees with Plaintiff that the face of the Complaint does not 4 unambiguously plead damages in excess of the jurisdictional minimum. Plaintiff’s 5 allegation that she suffered damages in an amount “not less than $25,001.00” does not 6 delineate the boundaries of the damages sought, and thus does not clearly indicate 7 more than $75,000 is in controversy. Further, the Ninth Circuit has noted that when a 8 damages estimate is articulated in the body of the complaint, but “no mention is made 9 of a total dollar amount in controversy” in the Prayer for Relief, “the complaint fails to 10 allege a sufficiently specific total amount in controversy” for the “legal certainty” test 11 to apply. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 700-01 (9th Cir. 2007). 12 Courts, therefore, routinely find that identical language alleging damages “in an 13 amount that is not less than $25,001.00” is not sufficiently specific to meet the amount 14 in controversy requirement. See, e.g., Carillo v. FCA USA, LLC, 546 F. Supp. 3d 995, 15 1000 (C.D. Cal. 2021); Luna v. FCA US LLC, No. 21-cv-01230-LHK, 2021 WL 16 4893567, at *5 (N.D. Cal. Oct. 20, 2021). Accordingly, Defendant must submit 17 evidence that establishes it is “more likely than not” that the amount in controversy 18 exceeds $75,000. See Sanchez, 102 F.3d at 404. 19 B. Preponderance of the Evidence Test 20 “Damages recoverable under the Song-Beverly Act include restitution, 21 incidental and consequential damages, attorneys’ fees and costs, and, if there has been 22 a ‘willful’ violation of the Act, a civil penalty.” Ortega v. Toyota Motor Sales, USA, 23 Inc., 572 F. Supp. 2d 1218, 1221 (S.D. Cal. 2008); see also Cal. Civ. Code § 1794. 24 The remedies provided by the Song-Beverly Act are “cumulative and shall not be 25 construed as restricting any remedy that is otherwise available … .” Cal. Civ. Code 26 § 1790.4. A consumer may state a tort claim and recover punitive damages even 27 when the facts underlying the tort claim and the Song-Beverly claim are the same. 28 Troensegaard v. Silvercrest Indus., Inc., 175 Cal. App. 3d 218, 226-28 (1985). When

5 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 6 of 10 Page ID #:670

1 a consumer alleges both a Song-Beverly claim and a tort claim, however, she must 2 elect to recover either a civil penalty or punitive damages to avoid “double recovery.” 3 See id.; Clauson v. Superior Court, 67 Cal. App. 4th 1253, 1256 (1998). 4 1. Restitution 5 Under the Song-Beverly Act, restitution is measured by the “amount equal to 6 the actual price paid or payable [for the vehicle] by the buyer,” less the reduction in 7 value to the vehicle “directly attributable to use by the buyer prior to the time the 8 buyer first delivered the vehicle to the manufacturer or distributor … for correction of 9 the problem that gave rise to the nonconformity.” Cal. Civ. Code § 1793.2(d)(2)(B)- 10 (C). “[T]he actual price paid or payable by the buyer [only] includes any paid finance 11 charges.” Alvarado v. FCA US, LLC, No. 17-cv-00505-JGB (DTBx), 2017 WL 12 2495495, at *4 (C.D. Cal. Jun. 8, 2017) (emphasis added). Where the record does not 13 show whether a plaintiff has made all installment payments for the amount financed, 14 courts have found the total “cash price” listed on a Retail Installment Sale Contract is 15 a reasonable estimate of “the actual price paid or payable” for the vehicle. See Luna, 16 2021 WL 4893567, at *7; Messih v. Mercedes-Benz USA, LLC, No. 21-cv-03032- 17 WHO, 2021 WL 2588977, at *4 (N.D. Cal. June 24, 2021) (collecting cases). 18 To determine the restitution amount, the cash price is then reduced by a 19 “mileage offset” to account for the vehicle’s reduction in value attributable to use by 20 the plaintiff, as required by Cal. Civ. Code § 1793.2(d)(2)(C). See Messih, 2021 WL 21 2588977, at *4. The mileage offset is determined by multiplying the “actual price of 22 the new motor vehicle paid or payable by the buyer … by a fraction having as its 23 denominator 120,000 and having as its numerator the number of miles traveled by the 24 new motor vehicle prior to the time the buyer delivered the vehicle” for correction of 25 the defect. Cal. Civ. Code § 1793.2(d)(2)(C). 26 / / / 27 / / / 28 / / /

6 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 7 of 10 Page ID #:671

1 Here, Defendant submits evidence of an undisputed Retail Installment Sale 2 Contract with a cash price of $24,035.00.2 See Dkt. 5, Ex. Q (“RISC”) at 1. When 3 Plaintiff first brought the vehicle in for repair, the mileage was 20,496. Koo Decl. ¶ 6. 4 The odometer, however, reflected 10 miles at the time of purchase. RISC at 1. Thus, 5 Plaintiff drove the vehicle 20,486 miles before the first attempted repair, and the 6 mileage offset is $24,035 x (20,486/120,000) = $4,103.18.3 Subtracting $4,103.18 7 from $24,035.00, the court estimates Plaintiff’s actual damages are $19,931.82. 8 Moreover, $19,931.82 is a conservative estimate of Plaintiff’s damages.4 9 Notably, Plaintiff alleges she is entitled to recover “the entire contract price” of the 10 vehicle, Compl. ¶ 133, without regard to the cash price or any mileage offset. 11 According to the evidence submitted, the sale price of the vehicle was $32,313.04. 12 RISC at 1. At least one court within this district has found this figure controls the 13 restitution calculation when Plaintiff seeks to recover the entire contract price. See 14 Gupta v. Mercedes-Benz USA, LLC, No. 20-cv-9295-GW (JEMx), 2020 WL 7423111, 15 at *3 (C.D. Cal. Dec. 10, 2020) (noting “[t]he Court only considers what a plaintiff’s 16 complaint puts in-controversy, not what a plaintiff is ultimately likely to recover or 17 whether a defendant likely has a defense that will preclude some or all of that 18 recovery.”). 19 2. Civil Penalties 20 The Song-Beverly Act allows a plaintiff to recover a civil penalty of twice the 21 amount of actual damages if the defendant’s conduct was “willful.” Cal. Civ. Code 22 § 1794(c), (e). Here, Plaintiff alleges Defendant’s “failure to comply with its 23

24 2 This amount does not include the document processing fee ($80), Mopar tracking 25 system fee ($895), sales tax ($2,313.43), electronic vehicle registration or transfer charge ($29), or optional services contract ($3,000). 26 3 Plaintiff failed to file a reply brief, and thus does not contest the accuracy of the 27 mileage offset. 28 4 This figure does not include potential incidental and consequential damages.

7 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 8 of 10 Page ID #:672

1 obligations under [the Song-Beverly Act] was willful, in that Defendant and its 2 representative were aware that they were unable to service or repair the Vehicle to 3 conform to the applicable express warranties after a reasonable number of repair 4 attempts, yet Defendant failed and refused to promptly replace the Vehicle or make 5 restitution.” Compl. ¶ 127. Thus, according to Plaintiff, she is “entitled to a civil 6 penalty of two times Plaintiff’s actual damages.” Id. 7 Courts “have varying views as to whether the maximum civil penalties should 8 be considered when deciding the amount in controversy.” Verastegui v. Ford Motor 9 Co., No. 19-cv-04806-BLF, 2020 WL 598516, at *3 (N.D. Cal. Feb. 7, 2020). This 10 court is persuaded that the maximum recoverable civil penalties should be considered 11 for purposes of determining the amount in controversy “because that is what Plaintiff 12 put in controversy.” Cox v. FCA US LLC, No. 20-cv-03808-WHO, 2020 WL 13 5046103, at *2 (N.D. Cal. Aug. 24, 2020); see also Saulic v. Symantec Corp., No. 07- 14 cv-00610-AH (PLAx), 2007 WL 5074883, at *4 (C.D. Cal. Dec. 26, 2007) (“Courts 15 as a matter of law, calculate the amount in controversy based upon the maximum 16 amount of civil penalties available to plaintiff.”). 17 Plaintiff here alleges Defendant acted willfully and that she is entitled to the 18 maximum civil penalty. Defendant should not be required to put forth evidence of its 19 own willfulness to oppose a motion to remand. See Canesco, 2021 WL 5122231, at 20 *19 (declining to require the defendant to “prove a case against itself” with respect to 21 liability for civil penalties in the calculation of the amount in controversy). 22 Accordingly, the court finds that for jurisdictional purposes, the civil penalties 23 available to Plaintiff amount to at least $19,931.82 x 2 = $39,863.64. Adding this 24 figure to Plaintiff’s actual damages, the amount in controversy, exclusive of attorneys’ 25 fees and punitive damages, is at least $59,795.46. 26 3. Attorneys’ Fees and Punitive Damages 27 Plaintiff’s Complaint also seeks reasonable attorneys’ fees as authorized by Cal. 28 Civ. Code § 1794(d) and punitive damages. See Compl., Prayer for Relief; Mot. 13

8 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 9 of 10 Page ID #:673

1 (noting Cal. Civ. Code § 3294(a) authorizes the recovery of punitive damages “where 2 it is proven by clear and convincing evidence that the defendant has been guilty of 3 oppression, fraud, or malice”). Both prospective attorneys’ fees and punitive damages 4 are properly included in the court’s assessment of the amount in controversy. See 5 Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019) (“[W]hen a 6 statute or contract provides for the recovery of attorneys’ fees, prospective attorneys’ 7 fees must be included in the assessment of the amount in controversy.”); Gonzales v. 8 CarMax Auto Superstores, LLC, 840 F.3d 644, 648-49 (9th Cir. 2016) (noting the 9 amount in controversy includes “damages (compensatory, punitive, or otherwise) … 10 as well as attorneys’ fees awarded under fee shifting statutes”). An award of punitive 11 damages is typically limited to a single-digit multiplier of the plaintiff’s compensatory 12 damages. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 US 408, 424-425 13 (2003). And as noted above, Plaintiff may recover either a civil penalty or punitive 14 damages, but not both. Troensegaard, 175 Cal. App. 3d at 226-28. 15 Here, defense counsel submits a declaration stating he has litigated hundreds of 16 cases under the Song-Beverly Act, and in his experience, plaintiffs’ attorneys 17 regularly request more than $75,000 in attorneys’ fees for cases tried or prepared for 18 trial. Dkt. 4 (Stuhlbarg Decl.) ¶ 5. Indeed, Plaintiff’s counsel, Strategic Legal 19 Practices, has sought over $250,000 in attorneys’ fees in this district in an action 20 brought under the Song-Beverly Act. See Jerry Zomorodian v. BMW of North 21 America, LLC, et al., Case No. 17-cv-05061-DMG (PLAx), Dkt. 136 at 7. Thus, 22 according to defense counsel, it is more likely than not Plaintiff’s counsel will seek 23 fees in excess of $60,000 if the case goes to trial. Opp. 15. 24 Plaintiff, on the other hand, argues this estimate of attorneys’ fees is 25 speculative, and that defense counsel “fails to compare the facts and circumstances of 26 this case to any of the cases referenced in [his] declaration, or how any of the 27 potentially relevant cases in his declaration reflect a reasonable and accurate estimate 28 of the attorneys’ fees in this matter.” Mot. 13-14 (emphasis in original). The court,

9 Case 2:21-cv-05347-FLA-GJS Document 23 Filed 07/05/22 Page 10o0f10 Page ID #:674

| | however, has no difficulty finding Defendant has shown it is more likely than not that 2 | Plaintiff's demand for attorneys’ fees places at least $15,205 at stake, pushing the 3 || amount in controversy over the jurisdictional threshold. 4 Plaintiff also largely ignores the impact of her claim for punitive damages on 5 | the court’s calculation of the amount in controversy, arguing “Defendant offers no 6 | evidence regarding ‘oppression, fraud, or malice’ that might support such an award of 7 || punitive damages.” Mot. 13 (emphasis in original). As with Plaintiff's claim for civil 8 | penalties, the court declines to require Defendant to put forth evidence of its own 9 | wrongdoing. Plaintiff's allegation that she is entitled to punitive damages adequately 10 | places such damages at issue when calculating the amount in controversy. 11 | Furthermore, when added to the court’s restitution calculation, the court need only 12 | multiply Plaintiff's actual damages by three to satisfy the amount in controversy. 13 | Multiplying Plaintiff's actual damages by nine places $179,386.38 in controversy for 14 | punitive damages alone. Accordingly, the court finds Defendant has shown by a 15 || preponderance of the evidence that the amount in controversy exceeds $75,000, and 16 | jurisdiction is proper under 28 U.S.C. § 1332. Plaintiff's Motion to Remand (Dkt. 12) 17 || is DENIED. 18 CONCLUSION 19 For the foregoing reasons, the court DENIES Plaintiff's Motion to Remand 20 | (Dkt. 12). 21 22 IT IS SO ORDERED. 23 24 | Dated: July 5, 2022 =z) 25 Ss 2% FERNANDO L. AENLLE-ROCHA United States District Judge 27 28 10