1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 MANUEL GUERRERO-CHAVEZ, Case No. 23-cv-06317-BLF
8 Plaintiff, ORDER DENYING MOTION TO 9 v. REMAND
10 FORD MOTOR COMPANY, [Re: ECF No. 12] 11 Defendant.
12 13 Before the Court is Plaintiff Manuel Guerrero-Chavez’s motion to remand this case to state 14 court. ECF No. 12 (“Mot.”). Defendant Ford Motor Company opposes the motion. ECF No. 14 15 (“Opp.”). Plaintiff did not file a reply. The Court finds the motion appropriate for disposition 16 without oral argument, and hereby VACATES the hearing scheduled for June 27, 2024. See Civ. 17 L.R. 7-1(b). 18 For the reasons below, the Court DENIES Plaintiff’s motion. 19 I. BACKGROUND 20 On May 7, 2022, Plaintiff purchased a 2022 Ford F-150 (“Vehicle”). ECF No. 1-4 21 (“Compl”) ¶ 5. Since purchase, Plaintiff has presented the Vehicle to a Ford-authorized service 22 and repair facility three times for various defects and malfunctions. Id. ¶¶ 10–11. On October 13, 23 2023, Plaintiff filed a lawsuit in the Santa Clara County Superior Court, alleging causes of action 24 for breach of implied warranty of merchantability and breach of express warranty under the Song- 25 Beverly Act. See id. ¶¶ 15–35. Among other remedies, the Complaint requests the civil penalty 26 “as provided in The Song-Beverly Act, in an amount not to exceed two times the amount of 27 Plaintiff’s actual damages” and attorneys’ fees. Id. at Prayer for Relief. On December 6, 2023, 1 Removal”). 2 II. LEGAL STANDARD 3 “A defendant may remove an action to federal court based on federal question jurisdiction 4 or diversity jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) 5 (citing 28 U.S.C. § 1441). “The mechanics and requirements for removal are governed by 28 6 U.S.C. § 1446.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013). A 7 party who contests removal may file a motion to remand. See 28 U.S.C. § 1447(c). “A motion to 8 remand the case on the basis of any defect other than lack of subject matter jurisdiction must be 9 made within 30 days after the filing of the notice of removal.” Id. “[T]he burden is on the party 10 removing the case from state court to show the exercise of federal jurisdiction is appropriate.” 11 Kuxhausen, 707 F.3d at 1141. 12 III. DISCUSSION 13 Plaintiff raises three arguments for remand: (1) the amount in controversy is speculative; 14 (2) comity principles weigh in favor of remand; and (3) Ford has failed to show that complete 15 diversity exists. The Court will address each argument in turn. 16 A. Amount in Controversy 17 Plaintiff argues that Ford has not met its burden to show that the amount in controversy 18 exceeds $75,000 because his damages are too speculative. Mot. at 6–7. Plaintiff argues that 19 although he purchased the Vehicle for $90,783.44,1 the Song-Beverly Act requires an offset for 20 reduction in value “directly attributable to use by the buyer.” Id. (quoting Cal. Civ. Code 21 § 1793.2(d)(2)(B)-(C)). Plaintiff further argues that any amount of attorney’s fees is too 22 speculative. Id. at 7. Ford argues that the amount in controversy is established not by 23 consideration of the likelihood of an award by what Plaintiff demands in his Complaint, and that 24 Plaintiff has requested a civil penalty and attorney’s fees under the Song Beverly Act, which 25 combined exceed $75,000. Opp. at 4–9. 26 “The district courts shall have original jurisdiction of all civil actions where the matter in 27 1 controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between 2 . . . citizens of different states.” 28 U.S.C.A. § 1332(a)(1). “The amount in controversy may 3 include ‘damages (compensatory, punitive, or otherwise) and the cost of complying with an 4 injunction, as well as attorneys’ fees awarded under fee shifting statutes.’” Chavez v. JPMorgan 5 Chase & Co., 888 F.3d 413, 416 (9th Cir. 2018) (quoting Gonzales v. CarMax Auto Superstores, 6 LLC, 840 F.3d 644, 648 (9th Cir. 2016)). The Ninth Circuit has clarified that “[t]he amount in 7 controversy is ‘not a prospective assessment of [a] defendant’s liability.’ Rather, it is the ‘amount 8 at stake in the underlying litigation.’” Id. at 417 (alteration in original) (first quoting Lewis v. 9 Verizon Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010); then quoting Gonzales, 840 F.3d at 10 648–49). 11 The Court finds that the amount in controversy is easily met in this case. Although 12 Plaintiff did not plead the actual amount he paid for the Vehicle, Plaintiff has conceded that he 13 purchased the Vehicle for $90,783.44. See Mot. at 6; see also ECF No. 12-1 (a copy of Plaintiff’s 14 Retail Installment Sale Contract, listing the total sale price as $90,783.44). Although Plaintiff 15 argues that the amount in controversy should be reduced by the statutory use offset, courts may 16 not consider affirmative defenses, counterclaims, and potential offsets when calculating the 17 amount in controversy. See Garcia v. ACE Cash Express, Inc., No. SACV 14-0285-DOC, 2014 18 WL 2468344, at *3 (C.D. Cal. May 30, 2014). In addition, Plaintiff requests a civil penalty and 19 attorney’s fees. The civil penalty under the Song-Beverly Act is twice actual damages. Cal. Civ. 20 Code § 1794(c). On attorney’s fees, Ford has produced evidence showing that it is common for 21 attorney’s fees in similar Song-Beverly Act cases to exceed $35,000. See ECF No. 14-2 ¶ 6; see 22 also Cotoc v. Dolex Dollar Express, Inc., No. LA CV20-06066 JAK (MAAx), 2021 WL 3783581, at 23 *6 (C.D. Cal. Aug. 25, 2021) (“In calculating the amount in controversy, a court must include a 24 reasonable amount of a potential award of attorney’s fees to a plaintiff, if such an award is permitted 25 under the statutory or common law basis for a plaintiff’s claims.”) (citing Fritsch v. Swift Transp. Co. 26 of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018)). Plaintiff has not filed a reply to dispute Ford’s 27 evidence. Thus, Plaintiff has put at stake an award of $216,566.88. 1 significant civil penalty,” Mot. at 6, this position is at odds with Ninth Circuit precedent, which 2 states that Courts are not to make a prospective assessment of the defendant’s liability. See Lewis, 3 627 F.3d at 400. 4 Accordingly, the Court finds that Ford has met its burden to show that the amount in 5 controversy exceeds $75,000. 6 B. Comity 7 Plaintiff argues that the Court should decline to exercise jurisdiction under principles of 8 comity. Mot. at 8–11. In essence, Plaintiff argues that the case should be remanded because the 9 case includes only state law causes of action. See id. 10 This Court, however, has a “virtually unflagging obligation . . . to exercise the jurisdiction 11 given [to it].” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 12 (1976).
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 MANUEL GUERRERO-CHAVEZ, Case No. 23-cv-06317-BLF
8 Plaintiff, ORDER DENYING MOTION TO 9 v. REMAND
10 FORD MOTOR COMPANY, [Re: ECF No. 12] 11 Defendant.
12 13 Before the Court is Plaintiff Manuel Guerrero-Chavez’s motion to remand this case to state 14 court. ECF No. 12 (“Mot.”). Defendant Ford Motor Company opposes the motion. ECF No. 14 15 (“Opp.”). Plaintiff did not file a reply. The Court finds the motion appropriate for disposition 16 without oral argument, and hereby VACATES the hearing scheduled for June 27, 2024. See Civ. 17 L.R. 7-1(b). 18 For the reasons below, the Court DENIES Plaintiff’s motion. 19 I. BACKGROUND 20 On May 7, 2022, Plaintiff purchased a 2022 Ford F-150 (“Vehicle”). ECF No. 1-4 21 (“Compl”) ¶ 5. Since purchase, Plaintiff has presented the Vehicle to a Ford-authorized service 22 and repair facility three times for various defects and malfunctions. Id. ¶¶ 10–11. On October 13, 23 2023, Plaintiff filed a lawsuit in the Santa Clara County Superior Court, alleging causes of action 24 for breach of implied warranty of merchantability and breach of express warranty under the Song- 25 Beverly Act. See id. ¶¶ 15–35. Among other remedies, the Complaint requests the civil penalty 26 “as provided in The Song-Beverly Act, in an amount not to exceed two times the amount of 27 Plaintiff’s actual damages” and attorneys’ fees. Id. at Prayer for Relief. On December 6, 2023, 1 Removal”). 2 II. LEGAL STANDARD 3 “A defendant may remove an action to federal court based on federal question jurisdiction 4 or diversity jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) 5 (citing 28 U.S.C. § 1441). “The mechanics and requirements for removal are governed by 28 6 U.S.C. § 1446.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013). A 7 party who contests removal may file a motion to remand. See 28 U.S.C. § 1447(c). “A motion to 8 remand the case on the basis of any defect other than lack of subject matter jurisdiction must be 9 made within 30 days after the filing of the notice of removal.” Id. “[T]he burden is on the party 10 removing the case from state court to show the exercise of federal jurisdiction is appropriate.” 11 Kuxhausen, 707 F.3d at 1141. 12 III. DISCUSSION 13 Plaintiff raises three arguments for remand: (1) the amount in controversy is speculative; 14 (2) comity principles weigh in favor of remand; and (3) Ford has failed to show that complete 15 diversity exists. The Court will address each argument in turn. 16 A. Amount in Controversy 17 Plaintiff argues that Ford has not met its burden to show that the amount in controversy 18 exceeds $75,000 because his damages are too speculative. Mot. at 6–7. Plaintiff argues that 19 although he purchased the Vehicle for $90,783.44,1 the Song-Beverly Act requires an offset for 20 reduction in value “directly attributable to use by the buyer.” Id. (quoting Cal. Civ. Code 21 § 1793.2(d)(2)(B)-(C)). Plaintiff further argues that any amount of attorney’s fees is too 22 speculative. Id. at 7. Ford argues that the amount in controversy is established not by 23 consideration of the likelihood of an award by what Plaintiff demands in his Complaint, and that 24 Plaintiff has requested a civil penalty and attorney’s fees under the Song Beverly Act, which 25 combined exceed $75,000. Opp. at 4–9. 26 “The district courts shall have original jurisdiction of all civil actions where the matter in 27 1 controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between 2 . . . citizens of different states.” 28 U.S.C.A. § 1332(a)(1). “The amount in controversy may 3 include ‘damages (compensatory, punitive, or otherwise) and the cost of complying with an 4 injunction, as well as attorneys’ fees awarded under fee shifting statutes.’” Chavez v. JPMorgan 5 Chase & Co., 888 F.3d 413, 416 (9th Cir. 2018) (quoting Gonzales v. CarMax Auto Superstores, 6 LLC, 840 F.3d 644, 648 (9th Cir. 2016)). The Ninth Circuit has clarified that “[t]he amount in 7 controversy is ‘not a prospective assessment of [a] defendant’s liability.’ Rather, it is the ‘amount 8 at stake in the underlying litigation.’” Id. at 417 (alteration in original) (first quoting Lewis v. 9 Verizon Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010); then quoting Gonzales, 840 F.3d at 10 648–49). 11 The Court finds that the amount in controversy is easily met in this case. Although 12 Plaintiff did not plead the actual amount he paid for the Vehicle, Plaintiff has conceded that he 13 purchased the Vehicle for $90,783.44. See Mot. at 6; see also ECF No. 12-1 (a copy of Plaintiff’s 14 Retail Installment Sale Contract, listing the total sale price as $90,783.44). Although Plaintiff 15 argues that the amount in controversy should be reduced by the statutory use offset, courts may 16 not consider affirmative defenses, counterclaims, and potential offsets when calculating the 17 amount in controversy. See Garcia v. ACE Cash Express, Inc., No. SACV 14-0285-DOC, 2014 18 WL 2468344, at *3 (C.D. Cal. May 30, 2014). In addition, Plaintiff requests a civil penalty and 19 attorney’s fees. The civil penalty under the Song-Beverly Act is twice actual damages. Cal. Civ. 20 Code § 1794(c). On attorney’s fees, Ford has produced evidence showing that it is common for 21 attorney’s fees in similar Song-Beverly Act cases to exceed $35,000. See ECF No. 14-2 ¶ 6; see 22 also Cotoc v. Dolex Dollar Express, Inc., No. LA CV20-06066 JAK (MAAx), 2021 WL 3783581, at 23 *6 (C.D. Cal. Aug. 25, 2021) (“In calculating the amount in controversy, a court must include a 24 reasonable amount of a potential award of attorney’s fees to a plaintiff, if such an award is permitted 25 under the statutory or common law basis for a plaintiff’s claims.”) (citing Fritsch v. Swift Transp. Co. 26 of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018)). Plaintiff has not filed a reply to dispute Ford’s 27 evidence. Thus, Plaintiff has put at stake an award of $216,566.88. 1 significant civil penalty,” Mot. at 6, this position is at odds with Ninth Circuit precedent, which 2 states that Courts are not to make a prospective assessment of the defendant’s liability. See Lewis, 3 627 F.3d at 400. 4 Accordingly, the Court finds that Ford has met its burden to show that the amount in 5 controversy exceeds $75,000. 6 B. Comity 7 Plaintiff argues that the Court should decline to exercise jurisdiction under principles of 8 comity. Mot. at 8–11. In essence, Plaintiff argues that the case should be remanded because the 9 case includes only state law causes of action. See id. 10 This Court, however, has a “virtually unflagging obligation . . . to exercise the jurisdiction 11 given [to it].” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 12 (1976). “[C]ourts at every level of the federal judiciary have rejected the precise premise on 13 which Plaintiffs’ ‘comity’ argument is based: that a court has authority to decline to exercise 14 diversity jurisdiction.” Bratton v. FCA US LLC, No. 17-CV-01458-JSW, 2017 WL 11687946, at 15 *8 (N.D. Cal. June 22, 2017) (collecting cases). 16 Accordingly, the Court does not have authority to decline to exercise diversity jurisdiction 17 over this case and rejects Plaintiff’s comity-based argument. 18 C. Diversity of Parties 19 Plaintiff argues that Ford has failed to establish diversity of citizenship because Ford has 20 failed to produce sufficient evidence of his domicile. Mot. at 11. Ford argues that Plaintiff is a 21 resident of San Jose, California and points to evidence including the Retail Installment Sale 22 Contract, repair orders, and the Vehicle’s Carfax. Opp. at 9–10. 23 “It is a longstanding principle that ‘[t]he place where a person lives is taken to be his 24 domicile until facts adduced establish the contrary.’” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 25 606, 614 (9th Cir. 2016) (alteration in original) (quoting Anderson v. Watts, 138 U.S. 694, 706 26 (1891)). “Courts within this district have . . . found that diversity jurisdiction exists based on 27 assertions of residence, absent evidence about domicile to the contrary.” Ervin v. Ballard Marine 1 (collecting cases). 2 The Court finds that Ford has met its burden to show that the exercise of federal 3 || jurisdiction is appropriate. Ford has presented evidence that Plaintiff lives in San Jose, California. 4 || See ECF No. 14-1 Ex. B (the Retail Installment Sale Contract for the Vehicle listing Plaintiff's 5 address in San Jose, California); ECF No. 14-1 Ex. E (repair orders for the vehicle listing 6 Plaintiff's address in San Jose, California); see also ECF No. 14-1 Ex. C (the Carfax for the 7 || Vehicle stating that the Vehicle was owned and serviced in California). Ford has also presented 8 evidence that its state of incorporation is Delaware and its principal place of business is in 9 || Michigan. See ECF No. 14-1 Ex. D (Ford’s Form 10-K for FY 2022). Plaintiff has not filed a 10 || reply to contest any of this evidence. 11 Accordingly, the Court finds that Ford has met its burden to show that diversity of 12 || citizenship exists. 13 || IV. ORDER 14 For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiff Manuel Guerrero- 3 15 Chavez’s motion to remand (ECF No. 12) is DENIED. 16
= 17 Dated: March 4, 2024 18 fo infechian BETH LABSON FREEMAN 19 United States District Judge 20 21 22 23 24 25 26 27 28