1 2 3 4 JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 GEORGE DIAZ, an Case No. 2:23-cv-06987-MCS-SK 11 individual, ORDER REMANDING CASE AND 12 Plaintiff, DENYING PENDING MOTIONS 13 (ECF NOS. 14, 18) v. 14
15 GENERAL MOTORS, LLC, a Delaware Limited Liability Company; 16 and DOES 1 through 10, inclusive, 17 Defendants. 18
19 20 The Court ordered Defendant Mercedes-Benz USA, LLC, to show cause why the 21 case should not be remanded to state court. (OSC, ECF No. 10.) Defendant filed a 22 response. (Resp., ECF No. 13.) 23 I. BACKGROUND 24 This is a case brought under the Song-Beverly Consumer Warranty Act (“SBA”). 25 Plaintiff George Diaz alleges that he bought a 2022 Chevrolet Silverado (“Vehicle”) on 26 or about March 2, 2023, which then began exhibiting defects. (Notice of Removal Ex. 27 A ¶¶ 7, 9 (“Compl.”), ECF No. 1-1.) Plaintiff seeks “replacement of the subject vehicle, 28 or restitution of the amount actually paid or payable under the purchase contract,” civil 1 penalties of up to two times his actual damages, and attorneys’ fees. (Resp. ¶¶ 11–12, 2 14; Compl., Prayer for Relief.) 3 Plaintiff initiated this proceeding in the Los Angeles County Superior Court, No. 4 3AVCV00912. (Compl.) Asserting diversity jurisdiction, Defendant removed the case 5 to this Court. (Notice of Removal, ECF No. 1.) 6 II. LEGAL STANDARDS 7 A. Subject-Matter Jurisdiction 8 Federal courts are of limited jurisdiction, having subject-matter jurisdiction only 9 over matters authorized by the Constitution and Congress. Kokkonen v. Guardian Life 10 Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove a civil action in 11 state court to federal court if the federal court has original jurisdiction. 28 U.S.C. 12 § 1441(a). Federal courts have original jurisdiction where an action arises under federal 13 law or where each plaintiff’s citizenship is diverse from each defendant’s citizenship 14 and the amount in controversy exceeds $75,000. Id. §§ 1331, 1332(a). 15 There is a “strong presumption” against removal jurisdiction, and the removing 16 party bears the burden of proving that removal is proper. Gaus v. Miles, Inc., 980 F.2d 17 564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt as 18 to the right of removal in the first instance.” Id. 19 B. Amount in Controversy 20 To invoke diversity jurisdiction, a party must demonstrate that there is complete 21 diversity of citizenship between the parties and that the amount in controversy exceeds 22 the sum or value of $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). 23 “[W]here it is unclear or ambiguous from the face of a state-court complaint whether 24 the requisite amount in controversy is pled,” the removing defendant must establish by 25 a preponderance of the evidence that the amount in controversy “more likely than not” 26 exceeds $75,000. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 27 2007); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 28 /// 1 III. DISCUSSION 2 The amount in controversy is not clear from the face of the Complaint. Defendant 3 acknowledges that Plaintiff did not plead any specific amount in controversy. (Resp. 4 ¶ 8.) Cf. Schneider v. Ford Motor Co., 441 F. Supp. 3d 909, 913 (N.D. Cal. 2020) 5 (“[T]he Complaint alleges that Plaintiff suffered damages in a sum to be proven at trial 6 in an amount that is not less than $25,001.00. Hence, while Plaintiff seeks restitution 7 for the value of the car, civil penalties, and attorneys’ fees and costs, it is unclear 8 whether all these damages are subsumed within the request for $25,001.” (internal 9 quotation marks and citation omitted)). Thus, Defendant must show that the amount in 10 controversy more likely than not exceeds $75,000. 11 A. Actual Damages 12 Actual damages under the SBA are “equal to the actual price paid or payable by 13 the buyer,” minus the reduction in value “directly attributable to use by the buyer.” Cal. 14 Civ. Code § 1793.2(d)(2)(B)–(C). This so-called “milage offset” is based on miles 15 driven before the first attempted repair of the defect. Id. Defendant is unable to ascertain 16 the current mileage of the vehicle, (Resp. ¶ 8 n.1), so any actual damages asserted by 17 Defendant are inherently speculative. Additionally, contrary to Defendant’s inclusion 18 of finance charges in its calculations, (Resp. ¶ 11), actual damages do no include finance 19 charges that have yet to be paid. See Farrales v. Ford Motor Co., No. 21-cv-07624- 20 HSG, 2022 U.S. Dist. LEXIS 76768, at *9 (N.D. Cal. Apr. 27, 2022) (citing Mitchell v. 21 Blue Bird Body Co., 80 Cal. App. 4th 32, 37–39 (2000)) (recognizing “the actual price 22 paid or payable by the buyer includes only paid finance charges,” not finance charges 23 that have yet to accrue). At most, Defendant has shown that that actual damages could 24 be as much as the $41,601 total cash price for the Vehicle, minus an unknown deduction 25 for the mileage offset. (See Resp. ¶ 11; Strotz Decl. Ex. A, ECF No. 13-4.) As a result, 26 Defendant has not shown the quantum of actual damages beyond speculation. 27 B. Civil Penalties 28 Plaintiff may be entitled to a civil penalty no greater than twice the amount of 1 actual damages only if Defendant’s violations were willful. Cal. Civ. Code § 1794(c). 2 However, in the jurisdictional analysis, “[t]he civil penalty . . . cannot simply be 3 assumed”; instead, “the defendant must make some effort to justify the assumption.” 4 D’Amico, 2020 U.S. Dist. LEXIS 90921, at *8 (internal quotation marks omitted) 5 (collecting cases). Courts do not include civil penalties in the jurisdictional analysis 6 “unless the removing defendant makes some showing regarding the possibility of civil 7 damages.” Savall v. FCA US LLC, No. 21cv195 JM (KSC), 2021 U.S. Dist. LEXIS 8 81477, at *7–8 (S.D. Cal. Apr. 28, 2021) (collecting cases). 9 Defendant asserts that the Court should consider the maximum civil penalty when 10 evaluating the amount in controversy because Plaintiff pleads entitlement to the 11 maximum penalty. (Resp. ¶ 12 (“Plaintiff claims entitlement to a civil penalty of ‘two 12 times’ his actual damages,” and “[t]wice the cash price of the subject vehicle would 13 total $83,202.00.”) As an initial matter, this calculation is based on an assumption of 14 the value of actual without factoring in any mileage offset. Even if the Court were to 15 accept Defendant’s proffered calculation, acknowledging a split in authority, the Court 16 respectfully declines to follow the line of cases Defendant cites for the proposition that 17 the maximum civil penalty factors into the amount in controversy without some indicia 18 of willfulness. See Savall, 2021 U.S. Dist. LEXIS 81477, at *6–8 (collecting cases on 19 either side of the split, and reasoning that if “boilerplate allegations [concerning 20 willfulness] were sufficient to defeat remand, then virtually any [SBA] action involving 21 a new vehicle purchase would remain in federal court”). Defendant presents no evidence 22 that a civil penalty is likely to be awarded in this case, let alone evidence justifying the 23 maximum penalty. See, e.g., id.
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1 2 3 4 JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 GEORGE DIAZ, an Case No. 2:23-cv-06987-MCS-SK 11 individual, ORDER REMANDING CASE AND 12 Plaintiff, DENYING PENDING MOTIONS 13 (ECF NOS. 14, 18) v. 14
15 GENERAL MOTORS, LLC, a Delaware Limited Liability Company; 16 and DOES 1 through 10, inclusive, 17 Defendants. 18
19 20 The Court ordered Defendant Mercedes-Benz USA, LLC, to show cause why the 21 case should not be remanded to state court. (OSC, ECF No. 10.) Defendant filed a 22 response. (Resp., ECF No. 13.) 23 I. BACKGROUND 24 This is a case brought under the Song-Beverly Consumer Warranty Act (“SBA”). 25 Plaintiff George Diaz alleges that he bought a 2022 Chevrolet Silverado (“Vehicle”) on 26 or about March 2, 2023, which then began exhibiting defects. (Notice of Removal Ex. 27 A ¶¶ 7, 9 (“Compl.”), ECF No. 1-1.) Plaintiff seeks “replacement of the subject vehicle, 28 or restitution of the amount actually paid or payable under the purchase contract,” civil 1 penalties of up to two times his actual damages, and attorneys’ fees. (Resp. ¶¶ 11–12, 2 14; Compl., Prayer for Relief.) 3 Plaintiff initiated this proceeding in the Los Angeles County Superior Court, No. 4 3AVCV00912. (Compl.) Asserting diversity jurisdiction, Defendant removed the case 5 to this Court. (Notice of Removal, ECF No. 1.) 6 II. LEGAL STANDARDS 7 A. Subject-Matter Jurisdiction 8 Federal courts are of limited jurisdiction, having subject-matter jurisdiction only 9 over matters authorized by the Constitution and Congress. Kokkonen v. Guardian Life 10 Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove a civil action in 11 state court to federal court if the federal court has original jurisdiction. 28 U.S.C. 12 § 1441(a). Federal courts have original jurisdiction where an action arises under federal 13 law or where each plaintiff’s citizenship is diverse from each defendant’s citizenship 14 and the amount in controversy exceeds $75,000. Id. §§ 1331, 1332(a). 15 There is a “strong presumption” against removal jurisdiction, and the removing 16 party bears the burden of proving that removal is proper. Gaus v. Miles, Inc., 980 F.2d 17 564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt as 18 to the right of removal in the first instance.” Id. 19 B. Amount in Controversy 20 To invoke diversity jurisdiction, a party must demonstrate that there is complete 21 diversity of citizenship between the parties and that the amount in controversy exceeds 22 the sum or value of $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). 23 “[W]here it is unclear or ambiguous from the face of a state-court complaint whether 24 the requisite amount in controversy is pled,” the removing defendant must establish by 25 a preponderance of the evidence that the amount in controversy “more likely than not” 26 exceeds $75,000. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 27 2007); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 28 /// 1 III. DISCUSSION 2 The amount in controversy is not clear from the face of the Complaint. Defendant 3 acknowledges that Plaintiff did not plead any specific amount in controversy. (Resp. 4 ¶ 8.) Cf. Schneider v. Ford Motor Co., 441 F. Supp. 3d 909, 913 (N.D. Cal. 2020) 5 (“[T]he Complaint alleges that Plaintiff suffered damages in a sum to be proven at trial 6 in an amount that is not less than $25,001.00. Hence, while Plaintiff seeks restitution 7 for the value of the car, civil penalties, and attorneys’ fees and costs, it is unclear 8 whether all these damages are subsumed within the request for $25,001.” (internal 9 quotation marks and citation omitted)). Thus, Defendant must show that the amount in 10 controversy more likely than not exceeds $75,000. 11 A. Actual Damages 12 Actual damages under the SBA are “equal to the actual price paid or payable by 13 the buyer,” minus the reduction in value “directly attributable to use by the buyer.” Cal. 14 Civ. Code § 1793.2(d)(2)(B)–(C). This so-called “milage offset” is based on miles 15 driven before the first attempted repair of the defect. Id. Defendant is unable to ascertain 16 the current mileage of the vehicle, (Resp. ¶ 8 n.1), so any actual damages asserted by 17 Defendant are inherently speculative. Additionally, contrary to Defendant’s inclusion 18 of finance charges in its calculations, (Resp. ¶ 11), actual damages do no include finance 19 charges that have yet to be paid. See Farrales v. Ford Motor Co., No. 21-cv-07624- 20 HSG, 2022 U.S. Dist. LEXIS 76768, at *9 (N.D. Cal. Apr. 27, 2022) (citing Mitchell v. 21 Blue Bird Body Co., 80 Cal. App. 4th 32, 37–39 (2000)) (recognizing “the actual price 22 paid or payable by the buyer includes only paid finance charges,” not finance charges 23 that have yet to accrue). At most, Defendant has shown that that actual damages could 24 be as much as the $41,601 total cash price for the Vehicle, minus an unknown deduction 25 for the mileage offset. (See Resp. ¶ 11; Strotz Decl. Ex. A, ECF No. 13-4.) As a result, 26 Defendant has not shown the quantum of actual damages beyond speculation. 27 B. Civil Penalties 28 Plaintiff may be entitled to a civil penalty no greater than twice the amount of 1 actual damages only if Defendant’s violations were willful. Cal. Civ. Code § 1794(c). 2 However, in the jurisdictional analysis, “[t]he civil penalty . . . cannot simply be 3 assumed”; instead, “the defendant must make some effort to justify the assumption.” 4 D’Amico, 2020 U.S. Dist. LEXIS 90921, at *8 (internal quotation marks omitted) 5 (collecting cases). Courts do not include civil penalties in the jurisdictional analysis 6 “unless the removing defendant makes some showing regarding the possibility of civil 7 damages.” Savall v. FCA US LLC, No. 21cv195 JM (KSC), 2021 U.S. Dist. LEXIS 8 81477, at *7–8 (S.D. Cal. Apr. 28, 2021) (collecting cases). 9 Defendant asserts that the Court should consider the maximum civil penalty when 10 evaluating the amount in controversy because Plaintiff pleads entitlement to the 11 maximum penalty. (Resp. ¶ 12 (“Plaintiff claims entitlement to a civil penalty of ‘two 12 times’ his actual damages,” and “[t]wice the cash price of the subject vehicle would 13 total $83,202.00.”) As an initial matter, this calculation is based on an assumption of 14 the value of actual without factoring in any mileage offset. Even if the Court were to 15 accept Defendant’s proffered calculation, acknowledging a split in authority, the Court 16 respectfully declines to follow the line of cases Defendant cites for the proposition that 17 the maximum civil penalty factors into the amount in controversy without some indicia 18 of willfulness. See Savall, 2021 U.S. Dist. LEXIS 81477, at *6–8 (collecting cases on 19 either side of the split, and reasoning that if “boilerplate allegations [concerning 20 willfulness] were sufficient to defeat remand, then virtually any [SBA] action involving 21 a new vehicle purchase would remain in federal court”). Defendant presents no evidence 22 that a civil penalty is likely to be awarded in this case, let alone evidence justifying the 23 maximum penalty. See, e.g., id. at *8 (“Other than referring to Plaintiff’s allegation that 24 FCA acted willfully, however, FCA provides no support for the likelihood that a civil 25 penalty based on its willfulness would actually be awarded in this case, or that the full 26 civil penalty would be awarded.”); Chajon v. Ford Motor Co., No. 2:18-cv-10533-RGK 27 (RAOx), 2019 U.S. Dist. LEXIS 4254, at *3–4 (C.D. Cal. Jan. 8, 2019) (“As to civil 28 penalties, while authorized under the Song-Beverly Act, Defendants have not offered 1 any evidence to support such an award.”). Defendant has not established that the 2 requested civil penalty is more likely than not in controversy. 3 C. Fees 4 “Section 1332(a)’s amount-in-controversy requirement excludes only ‘interest 5 and costs’ and therefore includes attorneys’ fees.” Guglielmino, 506 F.3d at 700; Fritsch 6 v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018) (“[A] court must 7 include future attorneys’ fees recoverable by statute or contract when assessing whether 8 the amount-in-controversy requirement is met.”). 9 Defendant claims that it is “common for plaintiffs’ counsel to claim hourly rates 10 of $350 to $500 per hour and seek attorneys’ fees exceeding $50,000.” (Resp. ¶ 15.) 11 Even if fees recovered or sought in other SBA cases present competent evidence of the 12 fees that could accrue here, they do not provide probative evidence of the hours that 13 might reasonably be expended in this case. Cf. Schneider, 441 F. Supp. 3d at 914 14 (finding burden unmet where “Defendants fail to provide the Court with specific 15 evidence showing the attorneys’ fees in this case are ‘more likely than not’” to bring 16 the amount in controversy above the jurisdictional threshold); D’Amico, 2020 U.S. Dist. 17 LEXIS 90921, at *11 (finding burden unmet where defendant failed to “provide an 18 estimate of the hours that will be incurred”). Specifically, Defendant “provides no 19 explanation for why this case is similar to ones that went to trial” or that the cases are 20 likely to involve similar procedural challenges. D’Amico, 2020 U.S. Dist. LEXIS 21 90921, at *10–11; accord Schneider, 441 F. Supp. 3d at 914 (“All that Defendants claim 22 is that the same counsel appears in each case and that the subject-matter of the cases are 23 the same. They do not, however, compare or contrast the litigation strategies or the 24 litigation timelines of the two cases.” (citation omitted)). The Court also notes that 25 virtually every SBA case assigned to this judicial officer except one has settled before 26 trial. 27 /// 28 /// 1 IV. CONCLUSION 2 The amount in controversy is not clear from the face of the Complaint. Defendant 3 has not made a sufficient showing to demonstrate that actual damages, civil penalties 4 or attorneys’ fees are more likely than not to be awarded at a quantum that would satisfy 5 the amount-in-controversy threshold. Accordingly, Defendant has not shown the Court 6 has subject-matter jurisdiction over the case, and remand is therefore appropriate. 28 7 U.S.C. § 1447(c). 8 The Court remands the case to Los Angeles County Superior Court, No. 9 23AVCV00912. The pending motions are denied as moot. The Court directs the Clerk 10 to effect the remand and close the case. 11 12 IT IS SO ORDERED. 13
14 Dated: September 25, 2023 MARK C. SCARSI 15 UNITED STATES DISTRICT JUDGE 16
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