1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 MIRNA BONILLA MENDOZA, et al., Case No. 2:23-cv-04783-FLA (RAOx)
12 Plaintiffs, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 FORD MOTOR COMPANY, et al., 15 Defendants. 16
17 18 RULING 19 On May 15, 2023, Plaintiffs Mirna Bonilla Mendoza and Byron Alvarez 20 (“Plaintiffs”) initiated this action against Defendant Ford Motor Company 21 (“Defendant”) and DOES 1 through 10 in the Los Angeles County Superior Court. 22 Dkt. 1-2, Ex. A (“Compl.”). The Complaint alleges two causes of action, both 23 stemming from the Song-Beverly Act. Id. Plaintiffs seek actual damages, civil 24 penalties, and attorney’s fees. Id. 25 On June 16, 2023, Defendant removed the action to this court based on alleged 26 diversity jurisdiction. Dkt. 1. In its Notice of Removal, Defendant alleges the court 27 has subject matter jurisdiction under 28 U.S.C. § 1332 because the amount in 28 controversy exceeds $75,000. Id. at 3. 1 On July 19, 2023, the court ordered the parties to show cause why the action 2 should not be remanded for lack of subject matter jurisdiction due to an insufficient 3 amount in controversy. Dkt. 9. Both Plaintiffs and Defendant filed responses. Dkts. 4 12 (“Def. Resp.”), 13 (“Pltfs. Resp.”). 5 Having reviewed the Notice of Removal and the responses to this court’s Order 6 to Show Cause, and for the following reasons, the court finds Defendant fails to 7 establish subject matter jurisdiction and accordingly REMANDS this action to the Los 8 Angeles County Superior Court. 9 DISCUSSION 10 Federal courts are courts of “limited jurisdiction,” possessing “only that power 11 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 12 Am., 511 U.S. 375, 377 (1994); U.S. Const. art. III, § 2, cl. 1. District courts are 13 presumed to lack jurisdiction unless the contrary appears affirmatively from the 14 record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006). 15 Additionally, federal courts have an obligation to examine jurisdiction sua sponte 16 before proceeding to the merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526 17 U.S. 574, 583 (1999). 18 Federal courts have jurisdiction where an action arises under federal law or 19 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 20 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 21 §§ 1331, 1332(a). Thus, a notice removing an action from state court to federal court 22 must include “a plausible allegation that the amount in controversy exceeds the 23 jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 24 U.S. 81, 89 (2014). Where “the plaintiff contests, or the court questions, the 25 defendant’s allegation” concerning the amount in controversy, “both sides [shall] 26 submit proof,” and the court may then decide whether the defendant has proven the 27 amount in controversy “by a preponderance of the evidence.” Id. at 88–89. “Federal 28 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 1 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). It is Defendant’s 2 burden as the removing party to justify this court’s exercise of jurisdiction. Id. at 567. 3 A. Actual Damages 4 At issue here is whether the amount of money Plaintiffs place in controversy 5 with their two Song-Beverly Act claims is sufficient. Under the Song-Beverly Act, a 6 plaintiff may recover “in an amount equal to the actual price paid or payable by the 7 buyer,” reduced by “that amount directly attributable to use by the buyer.” Cal. Civ. 8 Code § 1793.2(d)(2)(B)–(C). This includes a mileage offset. The offset is calculated 9 by reducing the purchase price by an amount directly proportional to the number of 10 miles driven. See id. § 1793.2(d)(2)(C). 11 Here, Defendant argues that Plaintiffs’ prayer for actual damages places 12 $36,382.46 in controversy, based on the purchase price of the vehicle. Def. Resp. at 3. 13 Plaintiffs argue Defendant fails to consider the mileage offset and the price of the 14 vehicle therefore cannot be a proper basis for an accurate actual damages calculation. 15 Pltfs. Resp. at 5. 16 The court agrees with Plaintiffs that Defendant’s failure to account for mileage 17 offset renders their actual damages calculation incorrect. However, as explained 18 below, Defendant fails to carry its burden even assuming the vehicle had no mileage 19 offset. The court, therefore, assumes for purposes of this Order, without making any 20 related legal or factual determinations, that the actual damages Plaintiffs might 21 recover in this action is $36,382.46. 22 Defendant argues two additional damages categories bring the amount in 23 controversy to over $75,000: civil penalties and attorney’s fees. For the following 24 reasons, however, Defendant fails to demonstrate that the amount in controversy 25 under either of these categories brings the action past the jurisdictional threshold. 26 B. Civil Penalties 27 Defendant’s inclusion of civil penalties to establish the amount in controversy 28 is highly speculative and insufficient to meet its burden. “A plaintiff who establishes 1 that a violation of the [Song-Beverly] Act was willful may recover a civil penalty of 2 up to two times the amount of actual damages.” See Cal. Civ. Code § 1794(c). 3 However, “[t]he civil penalty under California Civil Code § 1794(c) cannot simply be 4 assumed.” Pennon v. Subaru of Am., Inc., Case No. 2:22-cv-03015-SB (RAOx), 2022 5 WL 2208578, at *2 (C.D. Cal. June 17, 2022) (remanding action where defendant 6 provided no specific argument or evidence for including a civil penalty in the amount 7 in controversy) (quoting Castillo v. FCA USA, LLC, Case No. 3:19-cv-151-CAB- 8 MDD, 2019 WL 6607006, at *2 (S.D. Cal. Dec. 5, 2019)). Instead, district courts 9 regularly find that a Song-Beverly Act plaintiff’s mere allegations regarding a 10 defendant’s willfulness are, without more, insufficient to place civil penalties in 11 controversy. Estrada v. FCA USA LLC, Case No. 2:20-cv-10453-PA (JPRx), 2021 12 WL 223249, at *3 (C.D. Cal. Jan. 21, 2021) (collecting cases and remanding where 13 defendant’s inclusion of civil penalties to establish amount in controversy was “too 14 speculative and not adequately supported by the facts and evidence.”). This is 15 because “[s]imply assuming a civil penalty award is inconsistent with the principle 16 that the defendant must provide evidence that it is more likely than not that the 17 amount in controversy requirement is satisfied.” Makol v. Jaguar Land Rover N. Am., 18 LLC, Case No. 5:18-cv-03414-NC, 2018 WL 3194424, at *3 (N.D. Cal. June 28, 19 2018) (internal quotation marks removed); see also Khachatryan v. BMW of N. Am., 20 LLC, Case No. 2:21-cv-01290-PA (PDx), 2021 WL 927266, at *2 (C.D. Cal. Mar. 10, 21 2021). 22 Here, Defendant offers no argument or evidence supporting the potential 23 awarding of civil penalties. Defendant also fails to prove “that it is reasonable to 24 double the amount of actual damages in arriving [at] the size of the likely award.” 25 Pennon, 2021 WL 2208578, at *2.
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1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 MIRNA BONILLA MENDOZA, et al., Case No. 2:23-cv-04783-FLA (RAOx)
12 Plaintiffs, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 FORD MOTOR COMPANY, et al., 15 Defendants. 16
17 18 RULING 19 On May 15, 2023, Plaintiffs Mirna Bonilla Mendoza and Byron Alvarez 20 (“Plaintiffs”) initiated this action against Defendant Ford Motor Company 21 (“Defendant”) and DOES 1 through 10 in the Los Angeles County Superior Court. 22 Dkt. 1-2, Ex. A (“Compl.”). The Complaint alleges two causes of action, both 23 stemming from the Song-Beverly Act. Id. Plaintiffs seek actual damages, civil 24 penalties, and attorney’s fees. Id. 25 On June 16, 2023, Defendant removed the action to this court based on alleged 26 diversity jurisdiction. Dkt. 1. In its Notice of Removal, Defendant alleges the court 27 has subject matter jurisdiction under 28 U.S.C. § 1332 because the amount in 28 controversy exceeds $75,000. Id. at 3. 1 On July 19, 2023, the court ordered the parties to show cause why the action 2 should not be remanded for lack of subject matter jurisdiction due to an insufficient 3 amount in controversy. Dkt. 9. Both Plaintiffs and Defendant filed responses. Dkts. 4 12 (“Def. Resp.”), 13 (“Pltfs. Resp.”). 5 Having reviewed the Notice of Removal and the responses to this court’s Order 6 to Show Cause, and for the following reasons, the court finds Defendant fails to 7 establish subject matter jurisdiction and accordingly REMANDS this action to the Los 8 Angeles County Superior Court. 9 DISCUSSION 10 Federal courts are courts of “limited jurisdiction,” possessing “only that power 11 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 12 Am., 511 U.S. 375, 377 (1994); U.S. Const. art. III, § 2, cl. 1. District courts are 13 presumed to lack jurisdiction unless the contrary appears affirmatively from the 14 record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006). 15 Additionally, federal courts have an obligation to examine jurisdiction sua sponte 16 before proceeding to the merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526 17 U.S. 574, 583 (1999). 18 Federal courts have jurisdiction where an action arises under federal law or 19 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 20 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 21 §§ 1331, 1332(a). Thus, a notice removing an action from state court to federal court 22 must include “a plausible allegation that the amount in controversy exceeds the 23 jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 24 U.S. 81, 89 (2014). Where “the plaintiff contests, or the court questions, the 25 defendant’s allegation” concerning the amount in controversy, “both sides [shall] 26 submit proof,” and the court may then decide whether the defendant has proven the 27 amount in controversy “by a preponderance of the evidence.” Id. at 88–89. “Federal 28 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 1 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). It is Defendant’s 2 burden as the removing party to justify this court’s exercise of jurisdiction. Id. at 567. 3 A. Actual Damages 4 At issue here is whether the amount of money Plaintiffs place in controversy 5 with their two Song-Beverly Act claims is sufficient. Under the Song-Beverly Act, a 6 plaintiff may recover “in an amount equal to the actual price paid or payable by the 7 buyer,” reduced by “that amount directly attributable to use by the buyer.” Cal. Civ. 8 Code § 1793.2(d)(2)(B)–(C). This includes a mileage offset. The offset is calculated 9 by reducing the purchase price by an amount directly proportional to the number of 10 miles driven. See id. § 1793.2(d)(2)(C). 11 Here, Defendant argues that Plaintiffs’ prayer for actual damages places 12 $36,382.46 in controversy, based on the purchase price of the vehicle. Def. Resp. at 3. 13 Plaintiffs argue Defendant fails to consider the mileage offset and the price of the 14 vehicle therefore cannot be a proper basis for an accurate actual damages calculation. 15 Pltfs. Resp. at 5. 16 The court agrees with Plaintiffs that Defendant’s failure to account for mileage 17 offset renders their actual damages calculation incorrect. However, as explained 18 below, Defendant fails to carry its burden even assuming the vehicle had no mileage 19 offset. The court, therefore, assumes for purposes of this Order, without making any 20 related legal or factual determinations, that the actual damages Plaintiffs might 21 recover in this action is $36,382.46. 22 Defendant argues two additional damages categories bring the amount in 23 controversy to over $75,000: civil penalties and attorney’s fees. For the following 24 reasons, however, Defendant fails to demonstrate that the amount in controversy 25 under either of these categories brings the action past the jurisdictional threshold. 26 B. Civil Penalties 27 Defendant’s inclusion of civil penalties to establish the amount in controversy 28 is highly speculative and insufficient to meet its burden. “A plaintiff who establishes 1 that a violation of the [Song-Beverly] Act was willful may recover a civil penalty of 2 up to two times the amount of actual damages.” See Cal. Civ. Code § 1794(c). 3 However, “[t]he civil penalty under California Civil Code § 1794(c) cannot simply be 4 assumed.” Pennon v. Subaru of Am., Inc., Case No. 2:22-cv-03015-SB (RAOx), 2022 5 WL 2208578, at *2 (C.D. Cal. June 17, 2022) (remanding action where defendant 6 provided no specific argument or evidence for including a civil penalty in the amount 7 in controversy) (quoting Castillo v. FCA USA, LLC, Case No. 3:19-cv-151-CAB- 8 MDD, 2019 WL 6607006, at *2 (S.D. Cal. Dec. 5, 2019)). Instead, district courts 9 regularly find that a Song-Beverly Act plaintiff’s mere allegations regarding a 10 defendant’s willfulness are, without more, insufficient to place civil penalties in 11 controversy. Estrada v. FCA USA LLC, Case No. 2:20-cv-10453-PA (JPRx), 2021 12 WL 223249, at *3 (C.D. Cal. Jan. 21, 2021) (collecting cases and remanding where 13 defendant’s inclusion of civil penalties to establish amount in controversy was “too 14 speculative and not adequately supported by the facts and evidence.”). This is 15 because “[s]imply assuming a civil penalty award is inconsistent with the principle 16 that the defendant must provide evidence that it is more likely than not that the 17 amount in controversy requirement is satisfied.” Makol v. Jaguar Land Rover N. Am., 18 LLC, Case No. 5:18-cv-03414-NC, 2018 WL 3194424, at *3 (N.D. Cal. June 28, 19 2018) (internal quotation marks removed); see also Khachatryan v. BMW of N. Am., 20 LLC, Case No. 2:21-cv-01290-PA (PDx), 2021 WL 927266, at *2 (C.D. Cal. Mar. 10, 21 2021). 22 Here, Defendant offers no argument or evidence supporting the potential 23 awarding of civil penalties. Defendant also fails to prove “that it is reasonable to 24 double the amount of actual damages in arriving [at] the size of the likely award.” 25 Pennon, 2021 WL 2208578, at *2. This is insufficient. 26 C. Attorney’s Fees 27 Defendant’s inclusion of attorney’s fees to establish the amount in controversy, 28 likewise, is speculative and insufficient to meet its burden. In the Ninth Circuit, 1 attorney’s fees awarded under fee-shifting statutes may be considered in assessing the 2 jurisdictional threshold. Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 3 649 (9th Cir. 2016). But, before doing so, a removing defendant must “prove that the 4 amount in controversy (including attorneys’ fees) exceeds the jurisdictional threshold 5 by a preponderance of the evidence,” and must “make this showing with summary- 6 judgment-type evidence.” Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 7 795 (9th Cir. 2018). “A district court may reject the defendant’s attempts to include 8 future attorneys’ fees in the amount in controversy if the defendant fails to satisfy this 9 burden of proof.” Id. 10 “While a defendant may meet its burden to establish a reasonable estimate of 11 attorneys’ fees by identifying awards in other cases, those cases must be similar 12 enough to the case at hand that the court can conclude that it is more likely than not 13 that the plaintiff may incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, 14 Case No. 21-cv-00857-TWR (AGS), 2021 WL 4352340, at *6 (S.D. Cal. Sept. 24, 15 2021); cf. D’Amico v. Ford Motor Co., Case No. 2:20-cv-02985-CJC (JCx), 2020 WL 16 2614610, at *4 (C.D. Cal. May 21, 2020) (“[M]any cases alleging violations of the 17 [Song-Beverly] Act settle early.”). Moreover, a defendant fails to show attorney’s 18 fees are part of the amount in controversy where it “makes no effort to explain what 19 amount of attorney fees might be sought or awarded in this case, neglecting to include 20 so much as an estimate of the hour or billing rates that might apply.” Vega v. FCA 21 US, LLC, Case No. 2:21-cv-05128-VAP (MRWx), 2021 WL 3771795, at *4 (C.D. 22 Cal. Aug. 25, 2021); Garcia v. FCA US LLC, Case No. 2:20-cv-04779-VAP (MRWx), 23 2020 WL 4219614, at *3 (C.D. Cal. July 22, 2020). 24 Defendant fails in its burden with respect to attorney’s fees. Defendant only 25 states in conclusory fashion that attorney’s fees in Song-Beverly Act cases “regularly 26 exceed $100,000.” Def. Resp. at 2–3. Defendant does not explain how this action is 27 similar to any cases in which a court awarded such a figure. Further, Defendant does 28 not provide or substantiate reasonable lodestar estimates for a potential statutory 1 | attorney’s fee award in this action. D’Amico, 2020 WL 2614610, at *4. 2 Prevailing case authority does not support the proposition that district courts 3 || weighing subject matter jurisdiction in Song-Beverly Act claims must assume that the 4 || upper extreme of attorney’s fee awards granted in other Song-Beverly Act cases must 5 | be included in the amount in controversy. If this were the law, district courts would 6 | be unable to remand Song-Beverly Act cases for insufficient amounts in controversy. 7 | District courts, however, regularly do so. See, e.g., D’Amico, 2020 WL 2614610; 8 | Sood v. FCA US, LLC, Case No. 2:21-cv-04287-RSWL (SKx), 2021 WL 4786451 9 | (C.D. Cal. Oct. 4, 2021); Vega, 2021 WL 3771795, at *3; Garcia, 2020 WL 4219614, 10 | at *3. Here, it is Defendant’s burden to show, with evidence and to the preponderance 11 | standard, that at least $38,618.54 ($75,001 minus $36,382.46) in attorney’s fees is in 12 | controversy. Given that the removal statute is construed strictly and all doubts are 13 | resolved in favor of remand, the court finds Defendant has failed to submit evidence 14 | substantiating any specific amount of attorney’s fees in controversy. 15 Thus, the court determines Defendant has failed to demonstrate the amount in 16 | controversy exceeds $75,000 and finds that diversity jurisdiction does not exist. The 17 | court, therefore, REMANDS the action to the Los Angeles County Superior Court, 18 | Case No. 23TRCV01538. All dates and deadlines in this court are VACATED. The 19 || clerk of the court shall close the action administratively. 20 21 IT IS SO ORDERED. 22 23 | Dated: August 9, 2023
FERNANDO L. AENLELE-ROCHA 26 United States District Judge 27 28