1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 SCHELLY FISHER, Case No.: 22-cv-339-W-AHG
14 Plaintiff, ORDER (1) GRANTING 15 v. MOTION TO REMAND [DOC. 4] AND (2) TERMINATING 16 FORD MOTOR COMPANY, MOTION TO DISMISS [DOC. 3] 17 AS MOOT Defendant. 18 19 20 Pending before the Court is Plaintiff Schelly Fisher’s motion to remand this case to 21 the San Diego Superior Court. Defendant opposes. 22 The Court decides the matter on the papers submitted and without oral argument. 23 See Civ. R. 7.1(d)(1). For the following reasons, the Court GRANTS the motion to 24 remand [Doc. 4] and ORDERS the case remanded. In light of this order, Defendant’s 25 pending motion to dismiss [Doc. 3] is TERMINATED as moot. 26 // 27 // 28 // 1 I. RELEVANT BACKGROUND 2 This case arises from Plaintiff Schelly Fisher’s purchase of a 2017 Ford Edge (the 3 “Vehicle”) from El Cajon Ford. (Compl. ¶ 4.1) The Complaint alleges that during the 4 warranty period, the vehicle began exhibiting various symptoms of persistent defects, 5 including “a loud clatter/knocking/rattle sound with the engine running; low coolant 6 level; loss of coolant; abnormal burning smell from vehicle; coolant leaks into the engine 7 cylinders; engine misfires; rough running; lack of power; hesitation on acceleration; 8 and/or activation of the check engine light (in response to fault code P0302).” (Id. ¶ 7). 9 Fisher alleges that while under warranty, he took the Vehicle to Defendant Ford 10 Motor Company’s (“Ford”) authorized repair facility. (Compl. ¶ 8.) However, Ford was 11 unable to repair the Vehicle “to conform to the applicable express warranties within a 12 reasonable number of opportunities.” (Id.) 13 On February 9, 2022, Fisher filed a lawsuit against Ford in the San Diego Superior 14 Court. The Complaint asserts five causes of action for: (1) Breach of Warranty 15 Obligation to Provide Restitution or Replacement, Cal. Civ. Code § 1793.2(D)(2); 16 (2) Breach of Obligation to Commence or Complete Repairs Within Thirty Days, Cal. 17 Civ. Code § 1793.2(B); (3) Breach of Implied Warranty of Merchantability, Cal. Civ. 18 Code § 1792; (4) Breach of Obligation to Supply Sufficient Service Literature or 19 Replacement Parts, Cal. Civ. Code, § 1792(A)(3); and (5) Fraudulent Inducement – 20 Concealment. (See Compl.) Fisher seeks, among other things, the entire purchase price, 21 actual damages, restitution, a civil penalty of two times Plaintiff’s actual damages, 22 consequential and incidental damages, punitive damages, reasonable attorney’s fees and 23 costs, and prejudgment interest at the legal rate. (Id. at 10-11, prayer ¶¶ 1–7.) 24 On March 14, 2022, Ford removed the case to this Court based on diversity 25 jurisdiction. (Notice of Removal [Doc. 1].) Fisher now moves to remand, arguing that 26 27 28 1 Ford cannot establish the amount in controversy exceeds $75,000. Ford responds that the 2 amount-in-controversy requirement is satisfied by aggregating actual damages, a civil 3 penalty, and attorney’s fees. 4 5 II. LEGAL STANDARD 6 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. 7 Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized by 8 Constitution or a statute, which is not to be expanded by judicial decree.” Id. (internal 9 citations omitted). “It is to be presumed that a cause lies outside this limited jurisdiction 10 and the burden of establishing the contrary rests upon the party asserting jurisdiction.” 11 Id. (internal citations omitted). 12 Consistent with the limited jurisdiction of federal courts, the removal statute is 13 strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 14 (9th Cir. 1992). “The strong presumption against removal jurisdiction means that the 15 defendant always has the burden of establishing that removal is proper.” Id. “Federal 16 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 17 instance.” Id. 18 To determine whether the amount in controversy has been met on removal, “[t]he 19 district court may consider whether it is ‘facially apparent’ from the complaint that the 20 jurisdictional amount is in controversy.” Singer v. State Farm Mutual Auto Ins. Co., 116 21 F.3d 373, 377 (9th Cir. 1997). Where the state-court complaint does not specify an exact 22 damage figure, the defendant “must provide evidence that it is ‘more likely than not’ that 23 the amount in controversy” satisfies the federal diversity-jurisdiction requirement. 24 Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 25 In cases involving dismissal, the general test is that “[i]t must appear to a legal 26 certainty that the claim is really for less than the jurisdictional amount to justify 27 dismissal.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). 28 However, the “legal certainty” test must consider “where a rule of law or measure of 1 damages limits the amount of damages recoverable.” See Morris v. Hotel Riviera, Inc., 2 704 F.2d 1113, 1115 (9th Cir. 1983). 3 4 III. DISCUSSION 5 The Complaint does not specify a damage figure. Fisher argues remand is required 6 because Ford cannot establish that the amount in controversy exceeds $75,000. (P&A 7 [Doc. 4-1] 3:21–9:18.) Ford responds that the jurisdictional amount-in-controversy 8 requirement is satisfied by aggregating the restitution, a two-time civil penalty and 9 typical attorney’s fees in similar cases. (Opp’n [Doc. 9] 2:13–16.) For the reasons that 10 follow, the Court finds Ford has failed to establish the amount in controversy exceeds 11 $75,000. 12 13 A. Restitution 14 Ford contends that the amount of restitution at issue (in the form of a statutory 15 repurchase) totals $39,629.03. (Opp’n 5:13–15.) In his motion, Fisher argues this figure 16 is inflated because Ford fails to account for two deductions to restitution. (P&A 4:7–6:5.) 17 First, Fisher argues the amount of restitution must be deducted based on the 18 Vehicle’s usage/mileage. (P&A 4:18–5:12.) Under the Song Beverly Act, the buyer is 19 entitled to reimbursement “in an amount equal to the purchase price…, less that amount 20 directly attributable to use by the buyer prior to the discovery of the nonconformity.” 21 Cal. Civ. Code § 1793.2(d)(1). This deduction “is calculated based on the number of 22 miles the buyer drove the car before the first relevant repair.” Cox v. Kia Motors 23 America, Inc., 2020 WL 5814518, *3 (N.D.Cal. Sept. 30, 2020). According to Fisher, 24 the Vehicle’s milage was 41,370 when he first “presented” the car to Ford for repair, 25 resulting in a deduction of $13,000. (Id. 5:13–24, n.2; Chae Decl. [Doc. 4-2] ¶¶ 2, 3.) 26 Ford responds that there is no evidence supporting Fisher’s claim regarding the Vehicle’s 27 mileage when first taken for repair. (Opp’n 6:4–7.) However, Fisher’s attorney declares 28 that based on the repair records “available to [him], it appears that the first presentation of 1 the Subject Ford Edge to Ford’s dealer was made at 41,370 miles.” (Chae Decl.
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1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 SCHELLY FISHER, Case No.: 22-cv-339-W-AHG
14 Plaintiff, ORDER (1) GRANTING 15 v. MOTION TO REMAND [DOC. 4] AND (2) TERMINATING 16 FORD MOTOR COMPANY, MOTION TO DISMISS [DOC. 3] 17 AS MOOT Defendant. 18 19 20 Pending before the Court is Plaintiff Schelly Fisher’s motion to remand this case to 21 the San Diego Superior Court. Defendant opposes. 22 The Court decides the matter on the papers submitted and without oral argument. 23 See Civ. R. 7.1(d)(1). For the following reasons, the Court GRANTS the motion to 24 remand [Doc. 4] and ORDERS the case remanded. In light of this order, Defendant’s 25 pending motion to dismiss [Doc. 3] is TERMINATED as moot. 26 // 27 // 28 // 1 I. RELEVANT BACKGROUND 2 This case arises from Plaintiff Schelly Fisher’s purchase of a 2017 Ford Edge (the 3 “Vehicle”) from El Cajon Ford. (Compl. ¶ 4.1) The Complaint alleges that during the 4 warranty period, the vehicle began exhibiting various symptoms of persistent defects, 5 including “a loud clatter/knocking/rattle sound with the engine running; low coolant 6 level; loss of coolant; abnormal burning smell from vehicle; coolant leaks into the engine 7 cylinders; engine misfires; rough running; lack of power; hesitation on acceleration; 8 and/or activation of the check engine light (in response to fault code P0302).” (Id. ¶ 7). 9 Fisher alleges that while under warranty, he took the Vehicle to Defendant Ford 10 Motor Company’s (“Ford”) authorized repair facility. (Compl. ¶ 8.) However, Ford was 11 unable to repair the Vehicle “to conform to the applicable express warranties within a 12 reasonable number of opportunities.” (Id.) 13 On February 9, 2022, Fisher filed a lawsuit against Ford in the San Diego Superior 14 Court. The Complaint asserts five causes of action for: (1) Breach of Warranty 15 Obligation to Provide Restitution or Replacement, Cal. Civ. Code § 1793.2(D)(2); 16 (2) Breach of Obligation to Commence or Complete Repairs Within Thirty Days, Cal. 17 Civ. Code § 1793.2(B); (3) Breach of Implied Warranty of Merchantability, Cal. Civ. 18 Code § 1792; (4) Breach of Obligation to Supply Sufficient Service Literature or 19 Replacement Parts, Cal. Civ. Code, § 1792(A)(3); and (5) Fraudulent Inducement – 20 Concealment. (See Compl.) Fisher seeks, among other things, the entire purchase price, 21 actual damages, restitution, a civil penalty of two times Plaintiff’s actual damages, 22 consequential and incidental damages, punitive damages, reasonable attorney’s fees and 23 costs, and prejudgment interest at the legal rate. (Id. at 10-11, prayer ¶¶ 1–7.) 24 On March 14, 2022, Ford removed the case to this Court based on diversity 25 jurisdiction. (Notice of Removal [Doc. 1].) Fisher now moves to remand, arguing that 26 27 28 1 Ford cannot establish the amount in controversy exceeds $75,000. Ford responds that the 2 amount-in-controversy requirement is satisfied by aggregating actual damages, a civil 3 penalty, and attorney’s fees. 4 5 II. LEGAL STANDARD 6 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. 7 Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized by 8 Constitution or a statute, which is not to be expanded by judicial decree.” Id. (internal 9 citations omitted). “It is to be presumed that a cause lies outside this limited jurisdiction 10 and the burden of establishing the contrary rests upon the party asserting jurisdiction.” 11 Id. (internal citations omitted). 12 Consistent with the limited jurisdiction of federal courts, the removal statute is 13 strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 14 (9th Cir. 1992). “The strong presumption against removal jurisdiction means that the 15 defendant always has the burden of establishing that removal is proper.” Id. “Federal 16 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 17 instance.” Id. 18 To determine whether the amount in controversy has been met on removal, “[t]he 19 district court may consider whether it is ‘facially apparent’ from the complaint that the 20 jurisdictional amount is in controversy.” Singer v. State Farm Mutual Auto Ins. Co., 116 21 F.3d 373, 377 (9th Cir. 1997). Where the state-court complaint does not specify an exact 22 damage figure, the defendant “must provide evidence that it is ‘more likely than not’ that 23 the amount in controversy” satisfies the federal diversity-jurisdiction requirement. 24 Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 25 In cases involving dismissal, the general test is that “[i]t must appear to a legal 26 certainty that the claim is really for less than the jurisdictional amount to justify 27 dismissal.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). 28 However, the “legal certainty” test must consider “where a rule of law or measure of 1 damages limits the amount of damages recoverable.” See Morris v. Hotel Riviera, Inc., 2 704 F.2d 1113, 1115 (9th Cir. 1983). 3 4 III. DISCUSSION 5 The Complaint does not specify a damage figure. Fisher argues remand is required 6 because Ford cannot establish that the amount in controversy exceeds $75,000. (P&A 7 [Doc. 4-1] 3:21–9:18.) Ford responds that the jurisdictional amount-in-controversy 8 requirement is satisfied by aggregating the restitution, a two-time civil penalty and 9 typical attorney’s fees in similar cases. (Opp’n [Doc. 9] 2:13–16.) For the reasons that 10 follow, the Court finds Ford has failed to establish the amount in controversy exceeds 11 $75,000. 12 13 A. Restitution 14 Ford contends that the amount of restitution at issue (in the form of a statutory 15 repurchase) totals $39,629.03. (Opp’n 5:13–15.) In his motion, Fisher argues this figure 16 is inflated because Ford fails to account for two deductions to restitution. (P&A 4:7–6:5.) 17 First, Fisher argues the amount of restitution must be deducted based on the 18 Vehicle’s usage/mileage. (P&A 4:18–5:12.) Under the Song Beverly Act, the buyer is 19 entitled to reimbursement “in an amount equal to the purchase price…, less that amount 20 directly attributable to use by the buyer prior to the discovery of the nonconformity.” 21 Cal. Civ. Code § 1793.2(d)(1). This deduction “is calculated based on the number of 22 miles the buyer drove the car before the first relevant repair.” Cox v. Kia Motors 23 America, Inc., 2020 WL 5814518, *3 (N.D.Cal. Sept. 30, 2020). According to Fisher, 24 the Vehicle’s milage was 41,370 when he first “presented” the car to Ford for repair, 25 resulting in a deduction of $13,000. (Id. 5:13–24, n.2; Chae Decl. [Doc. 4-2] ¶¶ 2, 3.) 26 Ford responds that there is no evidence supporting Fisher’s claim regarding the Vehicle’s 27 mileage when first taken for repair. (Opp’n 6:4–7.) However, Fisher’s attorney declares 28 that based on the repair records “available to [him], it appears that the first presentation of 1 the Subject Ford Edge to Ford’s dealer was made at 41,370 miles.” (Chae Decl. ¶ 3.) 2 Accordingly, the Court finds a mileage/usage deduction of $13,000 is appropriate. 3 Fisher also contends a $10,145.99 deduction for negative equity is appropriate. 4 (P&A 5:13–24.) This deduction is based on the negative equity from Fisher’s trade-in 5 vehicle that was rolled into the financing. (Chae ¶ 4.) Ford does not dispute that this 6 deduction is appropriate or the amount of the negative equity. (See Opp’n n. 1; 7 Silverman Decl. [Doc. 9-1] ¶ 11.) Instead, Ford insists that with even with the deduction, 8 the amount in controversy exceeds $75,000. (Opp’n n. 1.) Accordingly, the Court also 9 finds that the amount of restitution at issue should be reduced by negative equity. 10 Based on the deductions for mileage/usage and negative equity, the amount of 11 restitution at issue is $16,483.04, not $39,629.03 as alleged by Ford. 12 13 B. Civil Penalty 14 Ford’s amount-in-controversy calculation also assumes a two-time civil penalty 15 totaling $79,258.06. (Opp’n 5:18–20.) There are two problems with this calculation. 16 First, the Court is not convinced that a civil penalty should automatically be 17 included in the calculation. In Conrad Associates v. Hartford Accident & Indemnity 18 Company, 994 F.Supp. 1196 (N.D. Cal. 1998), an insurance company defendant in a bad- 19 faith case argued punitive damages should be included in the amount in controversy 20 calculation. As support, defendant attached a number of jury verdicts awarding punitive 21 damages and asserted the average amount of those verdicts should be used to calculate 22 the amount in controversy. Id. at 1200. The court rejected the argument because the 23 “defendant has made no effort to compare the facts of those cases with the alleged facts 24 of this case.” Id. at 1201. The court reasoned that “Defendant’s burden cannot be met 25 simply by pointing out that the complaint seeks punitive damages and that any damages 26 awarded under such a claim could total a large sum of money, particularly in light of the 27 high burden that must be met in order for a plaintiff even to be eligible for receipt of 28 discretionary punitive damages.” Id. 1 Numerous other cases have followed the approach in Conrad. In Pontiero v. 2 GEICO Gen. Ins. Co., 2017 WL 3475666 (C.D. Cal. Aug. 14, 2017), for example, the 3 court found that merely alleging the defendant acted intentionally did not provide 4 sufficient information to infer that punitive damages may be available. Id. at *4. In 5 Mendoza v. Subaru of Am., Inc., 2020 WL 1433427 (C.D. Cal. Mar. 24, 2020), the court 6 denied the inclusion of civil penalties reasoning that “while civil penalties are available 7 for willful failure to comply with the Song-Beverly Act, Defendant has not offered any 8 evidence to support such an award.” Id. at *2. See also Simmons v. PCR Tech., 209 F. 9 Supp. 2d 1029, 1033 (N.D. Cal. 2002) (noting that in evaluating punitive damages in 10 context of the amount in controversy requirement, defendants may introduce evidence of 11 jury verdicts in cases involving analogous facts). 12 This Court also agrees with Conrad’s approach. Rather than simply assuming that 13 because a civil penalty is available, one will be awarded, the defendant must make some 14 effort to justify the assumption by, for example, pointing to allegations in the Complaint 15 suggesting such an award would be appropriate. Such an approach appears more 16 consistent with the general principle that where the state-court complaint does not specify 17 a damage figure, the defendant “must provide evidence establishing that it is ‘more likely 18 than not’ that the amount in controversy” requirement is satisfied. Sanchez v. 19 Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996); see also Matheson v. 20 Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (finding that in 21 evaluating amount in controversy, courts may consider facts presented in the removal 22 petition as well as any summary-judgment-type evidence). 23 Second, even assuming a civil penalty of two times the amount of restitution is 24 appropriate, Ford’s contention that a civil penalty of $79,258.06 is erroneously based on 25 the purchase price of the vehicle before deducting for usage/milage and negative equity. 26 (See Opp’n 5:13–21.) Instead, the civil penalty is calculated as a multiplier of the 27 plaintiff’s actual damages. See Ayala v. Ford Motor Co., No. 20-CV-02383-KSC, 2021 28 WL 2644506, at *4 (S.D. Cal. June 21, 2021) (using actual damages, offset by 1 deductions, to calculate the civil penalty); Degenhardt v. Ford Motor Co., No. 21-CV- 2 1921-MMA (BLM), 2022 WL 103723, at *5 (S.D. Cal. Jan. 10, 2022) (finding the Song- 3 Beverly Act requires a reduction for mileage and usage before assessing the amount of 4 the civil penalty). As a result, the civil penalty should be based on $16,469.04 in 5 restitution discussed above. Thus, the maximum civil penalty at issue in this case is 6 $32,938.08. 7 8 C. Attorney’s Fees 9 Ford also contends that attorney’s fees in the amount of $20,000 should be 10 included in the amount in controversy calculation. Ford’s contention is based on Pappas 11 v. Ford Motor Co., 2021 WL 5810661, at *6 (S.D. Cal. Dec. 7, 2021) and Tapia v. Ford 12 Motor Co., 2021 WL 5863597, at *3 (S.D. Cal. Oct. 19, 2019), which involved attorney’s 13 fee award of $21,165 and $22,828 respectively. (Opp’n 8:7–19.) Fisher argues there is 14 “no evidence to support FORD’s reliance on attorney fees as an element of damages for 15 purposes of calculating the amount in controversy.” (P&A 9:12–13.) The Court 16 disagrees. Given Fisher’s failure to provide any indication regarding her current fees, the 17 Court is persuaded by Ford’s reliance on similar cases from this district. Accordingly, 18 the attorney’s fees in the amount of $20,000 are appropriate in evaluating the amount in 19 controversy. 20 21 D. The Amount in Controversy 22 As discussed above, Ford has failed to attempt to justify the assumption that a civil 23 penalty should be included in the amount in controversy in this case. However, even 24 assuming Ford demonstrated that a civil penalty should be applied, the record establishes 25 that the amount in controversy is $69,421.12. Because the amount in controversy does 26 not meet the diversity jurisdictional minimum, the Court will grant Fisher’s motion to 27 remand. 28 1 ||}IV. CONCLUSION & ORDER 2 Because Defendant has not established the amount in controversy exceeds 3 $75,000, the Court GRANTS Fisher’s motion [Doc. 4] and ORDERS the case remanded 4 ||to the San Diego Superior Court. In light of this order, Ford’s motion to dismiss [Doc. 3] 5 TERMINATED as MOOT. 6 IT IS SO ORDERED. 7 ||Dated: June 15, 2022 \ 8 ihe Dor 9 Hn. 1 omas J. Whelan 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28