Martinez v. Ford Motor Co.

• Court: District Court, E.D. California
• Decided: April 24, 2025
• Docket: 2:25-cv-00415
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 ----oo0oo---- 9 10 OLGA MARTINEZ, and JONATHAN No. 2:25-cv-415 WBS CSK FLORES MARTINEZ, 11 Plaintiffs, 12 ORDER RE: MOTION TO REMAND1 v. 13 FORD MOTOR COMPANY, a Delaware 14 corporation; and DOES 1 through 10, inclusive, 15 Defendants. 16

17 ----oo0oo---- 18 19 Plaintiffs Olga Martinez and Jonathan Flores Martinez 20 (“plaintiffs”) filed this action in state court on December 26, 21 2024, against defendant Ford Motor Company (“defendant”) alleging 22 breaches of express and implied warranties under the Song-Beverly 23 Act, Cal. Civ. Code § 1794, as well as fraudulent inducement and 24 negligent repair. (Docket No. 1-1 at 6-27.) After defendant 25 removed the case to this court (Docket No. 1), plaintiffs moved 26

27 1 The motion is decided on the papers without oral argument pursuant to Local Rule 230(g). The scheduled April 28, 28 2025 hearing on the motion is hereby VACATED. 1 to remand. (Docket Nos. 6, 8.) Defendant opposes the instant 2 motion. (Docket No. 9.) 3 On September 2, 2023, plaintiffs financed and purchased 4 a vehicle of defendant’s make, from a non-party dealership in 5 Sacramento, California. (Docket No. 6 at 17.) Starting in 2024, 6 plaintiffs experienced issues operating the vehicle. (Id. at 18- 7 19.) On September 3, 2024, plaintiffs took the vehicle to a non- 8 party authorized repair facility pursuant to defendant’s 9 warranties. (Id.) After the first set of repairs, plaintiffs 10 experienced different issues operating the vehicle and had 11 repairs attempted on it two more times on November 1, 2024, and 12 November 20, 2024, both at the same facility. (Id.) 13 After the litigation commenced, defendant answered the 14 complaint in state court on January 27, 2025. (Docket No. 1-2 at 15 2-6.) Defendant removed the case to this court on January 30, 16 2025, based on diversity jurisdiction. (Docket No. 1 (citing 28 17 U.S.C. § § 1332, 1446).) 18 “Any civil action brought in a State court of which the 19 district courts of the United States have original jurisdiction, 20 may be removed by the defendant or the defendants, to the 21 district court of the United States for the district and division 22 embracing the place where such action is pending.” 28 U.S.C. 23 § 1441(a). District courts have original jurisdiction over cases 24 “involving citizens of different states” where the amount in 25 controversy exceeds $75,000, exclusive of interest and costs. 26 Demarest v. HSBC Bank USA, N.A., 920 F.3d 1223, 1225-26 (9th 27 Cir. 2019) (quoting 28 U.S.C. § 1332(a)). 28 1 It is undisputed that plaintiffs are citizens of 2 California, while defendant is a citizen of Delaware and 3 Michigan. (See, e.g., Docket No. 1 at 5; Docket No. 1-1 at 7.) 4 The parties thus appear to be diverse.2 See 28 U.S.C. § 1332(a). 5 The remaining issue, however, is whether the action satisfies the 6 amount in controversy requirement of over $75,000, for diversity 7 jurisdiction. Id. 8 “The amount in controversy is the ‘amount at stake in 9 the underlying litigation. This includes any result of the 10 litigation, excluding interests and costs, that ‘entails a 11 payment’ by the defendant.’” Fritsch v. Swift Transp. Co. of 12 Ariz., LLC, 899 F.3d 785, 792-94 (9th Cir. 2018) (cleaned up) 13 (quoting Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 14 648-49 (9th Cir. 2016)). “Among other items, the amount in 15 controversy includes damages (compensatory, punitive, or 16 otherwise), the costs of complying with an injunction, and 17 attorneys’ fees awarded under fee-shifting statutes or contract.” 18 Id. 19 “To determine if the amount in controversy requirement 20 is met, the court looks to the amount demanded by the plaintiff 21

22 2 Although ten Doe defendants are joined in the complaint, such fictitious defendants can be ignored in 23 determining whether the parties are diverse. See Rojas v. Sea Worlds Parks & Ent., Inc., 538 F. Supp. 3d 1008, 1018-19 (S.D. 24 Cal. 2021) (“The inclusion of Doe defendants destroys diversity only if the plaintiffs’ ‘allegations concerning the Doe 25 defendants provide a reasonable indication of their identity, the relationship to the action, and their diversity-destroying 26 citizenship, then the Court lacks diversity jurisdiction.’” 27 (cleaned up) (quoting Robinson v. Lowe’s Home Ctrs., LLC, No. 1:15-cv-1321 LJO SMS, 2015 WL 13236883, at *3-4 (E.D. Cal. Nov. 28 13, 2015)). 1 in the complaint.” Adkins v. J.B. Hunt Transp., Inc., 293 F. 2 Supp. 3d 1140, 1143-44 (E.D. Cal. 2018) (capitalization altered) 3 (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 4 291-92 (1938)). “Where it is not facially evident from the 5 complaint that more than $75,000 is in controversy, the removing 6 party must prove, by a preponderance of the evidence, that the 7 amount in controversy meets the jurisdictional threshold.” Id. 8 (quoting Matheson v. Progressive Specialty Ins. Co., 319 F.3d 9 1089, 1090-91 (9th Cir. 2003) (per curiam)). 10 After accounting for a 3.9% annual interest rate and a 11 total cash price of $60,836.00, the vehicle’s ”total sale price” 12 was $92,760.72, which is amortized over 66 monthly payments. 13 (See Docket No. 6-5 at 2-3 (capitalization altered).) Plaintiffs 14 attest that their “recovery would not exceed $64,027.52” in 15 actual damages after accounting for statutory deductions and 16 offsets, such as mileage and negative equity. (See Docket No. 6- 17 1 at 7.) That figure, however, does not include other remedies, 18 such as statutory civil penalties. (See id. at 8-11.) 19 Defendant argues that the amount in controversy exceeds 20 $75,000, because the statutory civil penalty of twice the actual 21 damages, as well as attorneys’ fees must be included. (See id. 22 at 16-19.) The court agrees. The Ninth Circuit has not 23 addressed whether to include statutory civil penalties in the 24 amount in controversy of an action arising under the Song-Beverly 25 Act. See Cal. Civ. Code § 1794. However, several federal 26 district courts within the state of California, including this 27 court, have found that the court may consider statutory civil 28 1 penalties in assessing the amount in controversy. See, e.g., 2 Selinger v. Ford Motor Co., No. 22-cv-08883, 2023 WL 2813510, at 3 *8-12 (C.D. Cal. Apr. 5, 2023); McGill v. FCA US LLC, No. 2:21- 4 cv-93 MCE JDP, 2021 WL 5883037, at *5-6 (E.D. Cal. Dec. 13, 5 2021); Canesco v. Ford Motor Co., 570 F. Supp. 3d 872, 890-903 & 6 n.19 (S.D. Cal. 2021); Brady v. Mercedes-Benz USA, Inc., 243 F. 7 Supp. 2d 1004, 1007-10 (N.D. Cal. 2002). 8 The Canesco court stated that “the majority of courts 9 and more recent cases [] find civil penalties appropriate for 10 inclusion in the calculation of the amount in controversy.” 570 11 F. Supp. 3d at 901-03 (citing Brady, 243 F. Supp. 2d at 1009-10). 12 Another court concluded “that civil penalties should be 13 considered” because “in determining the amount in controversy, 14 courts are to consider the ‘maximum recovery the plaintiff could 15 reasonably recover.’” Selinger, 2023 WL 2813510, at *9-10 16 (cleaned up) (quoting Arias v. Residence Inn by Marriott, 936 17 F.3d 920, 926-27 (9th Cir. 2019) (emphasis omitted)). As it has 18 before, this court finds these cases persuasive. See, e.g., 19 McGill, 2021 WL 5883037, at *5-6 (quoting Brady, 243 F. Supp. 2d 20 at 1009-10). 21 Plaintiffs cite cases declining to include statutory 22 penalties in the amount in controversy, but those cases are 23 distinguishable. See, e.g., Vega v. FCA US LLC, No. 21-cv-05128, 24 2021 WL 3771795, at *3-4 (C.D. Cal. Aug. 25, 2021). Where courts 25 have declined to include statutory civil penalties in the amount 26 in controversy, they have done so due to the defendant “simply 27 assum[ing] that because a civil penalty is available, one will be 28 1 awarded.” Id. (quoting Zawaideh v. BMW of N. Am., LLC, No. 17- 2 cv-2151, 2018 WL 1805103, at *1-3 (S.D. Cal. Apr. 17, 2018)). 3 Those cases are inapposite where the party opposing remand shows, 4 by a preponderance of the evidence, that statutory civil 5 penalties are in fact at stake. 6 Here, the operative complaint does not specify a 7 specific amount in damages. (See Docket No. 1-1 Ex. A at 27.) 8 However, plaintiffs request general, special, actual, and 9 punitive damages; diminution in value; “a civil penalty in the 10 amount of two times plaintiffs’ actual damages”; and “reasonable 11 attorneys’ fees.” (Id. (cleaned up).) This list mirrors what 12 the Song-Beverly Act provides in remedies. See Cal. Civ. Code 13 § 1794. Despite their own request in the complaint for these 14 various types of damages, plaintiffs ask the court to only look 15 at actual damages in determining the amount in controversy. 16 The Song-Beverly Act allows for civil penalties 17 assessed at twice the amount of actual damages. See Cal. Civ. 18 Code § 1794(c). “If the buyer establishes that the failure to 19 comply was willful, the judgment may include . . . a civil 20 penalty which shall not exceed two times the amount of actual 21 damages.” Id. In the complaint, plaintiffs allege that 22 defendant willfully failed to comply with its responsibilities 23 under the Song-Beverly Act. (See Docket No. 1-1 at 20-22.) 24 Thus, plaintiffs may well be able to recover statutory civil 25 penalties from defendant. 26 Defendant has shown that, whether the court uses 27 plaintiffs’ range of actual damages or defendant’s estimate, the 28 ee nn een en nn nn on on nn on nn nnn enn ne on nn ON

1 | potential civil penalty alone, without even considering actual 2 damages, is well in excess of the jurisdictional threshold of 3 $75,000. As such, defendant has shown that the amount in 4 controversy exceeds $75,000, and the court must deny the motion 5 to remand.? 6 IT IS THEREFORE ORDERED that plaintiffs’ motion to 7 remand the case to the state court (Docket No. 6) be, and the 8 | same hereby is, DENIED. . ak. 10 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 | 3 Because the court finds that including civil penalties 16 in the amount in controversy exceeds the jurisdictional 17 threshold, it need not address whether to include attorneys’ fees in that amount as well, although inclusion of attorneys’ fees 18 would provide another basis for concluding the amount in controversy meets the jurisdictional requirement. See Cal. Civ. 19 Code § 1794(d) (allowing plaintiffs “to recover as part of the judgment a sum equal to the aggregate amount of costs and 20 expenses, including attorneys' fees” (cleaned up)). Defense counsel estimates that “$7,500 is a reasonable estimate” of ‘attorneys’ fees” plaintiffs may recover here. (Docket No. 9-1 22 at @ 7.) The court has previously noted that even “$50,000 in attorneys’ fees is, on average, commonly viewed as a reasonable 23 estimate” and included that amount in the amount in controversy. See Cassi v. Gen. Motors, LLC, No. 2:23-cv-1801 WBS JDP, 2023 WL 24 7168348, at *1-2 (E.D. Cal. Oct. 31, 2023) (cleaned up) (quoting 5 Selinger, 2023 WL 2813510, at *10-11). Moreover, some courts > which conclude that the amount in controversy includes civil 26 penalties have also found that it includes attorneys’ fees. See, e.g., Selinger, 2023 WL 2813510, at *10-12; Brady, 243 F. Supp. 27 2d at 1010-11. Other courts have merely declined to address the issue. See, e.g., McGill, 2021 WL 5883037, at *5-6 n.7; Canesco, 28 | 570 F. Supp. 3d at 902-03 & n.19.