1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SALDIVAR, Case No.: 3:22-cv-577-L-WVG
12 Plaintiff,
13 v. ORDER DENYING PLAINTIFF’S 14 FCA US LLC, MOTION TO REMAND 15 Defendant. 16 17 Pending before the Court in this lemon law action is Plaintiff’s motion to remand. 18 Defendant opposed, and Plaintiff replied. The Court decides the matter on the papers 19 submitted and without oral argument. Civ. L. R. 7.1. For the reasons stated below, the 20 motion is DENIED. 21 I. BACKGROUND 22 On December 18, 2019, Plaintiff purchased a 2019 RAM 1500 from Defendant. 23 The purchase price was $35,594.90. Plaintiff alleges the vehicle has defects that 24 substantially impair its use, value, and safety. Plaintiff also alleges Defendant failed to 25 cure the defects or replace/repurchase the vehicle. 26 On March 21, 2022, Plaintiff filed this action in San Diego Superior Court. 27 Plaintiff asserts two claims under the Song-Beverly Act. On April 25, 2022, Defendant 28 1 removed this action to the Southern District of California. Plaintiff now seeks to remand 2 it back to state court. 3 Plaintiff seeks “recession of the purchase contract and restitution of all monies 4 expended.” (Complaint at p. 5). Plaintiff also seeks a “civil penalty in the amount of two 5 times Plaintiff’s actual damages.” Id. 6 II. LEGAL STANDARD 7 Federal courts have limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of 8 Am., 511 U.S. 375, 377 (1994). A defendant may remove an action from state court to 9 federal court if the action could have been brought in federal court in the first instance. 28 10 U.S.C. § 1441(a). The removal is proper when a case originally filed in state court 11 presents a federal question or where there is diversity of citizenship among the parties 12 and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a). 13 14 “The burden of establishing federal jurisdiction is on the party invoking federal 15 jurisdiction.” United States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008); Abrego Abrego 16 v. The Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006). 17 To determine whether the amount in controversy is met, courts look to the 18 complaint itself. Abrego Abrego, 443 F.3d at 690. “Where it is not facially evident from 19 the complaint that more than $75,000 is in controversy, the removing party must prove” it 20 is more likely than not “that the amount in controversy meets the jurisdictional 21 threshold.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 22 2003). 23 “The removal statute is strictly construed, and any doubt about the right of removal 24 requires resolution in favor of remand.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 25 1241, 1244 (9th Cir. 2009). 26 27 28 1 III. DISCUSSION 2 In this case, the dispute concerns whether the amount in controversy requirement is 3 met.1 Defendant argues the amount exceeds $75,000. To support that calculation, it relies 4 on the potential actual damages, consequential damages, civil penalties, and attorneys’ 5 fees. Plaintiff argues Defendant failed to show the amount in controversy exceeds the 6 threshold. 7 “The amount in controversy reflects the maximum recovery the plaintiff could 8 reasonably recover.” Arias v. Residence Inn, 936 F.3d 920, 927 (9th Cir. 2019) (emphasis 9 original); Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 793 (9th Cir. 2018) 10 (“the amount in controversy is the amount at stake in the underlying litigation, and 11 therefore the amount in controversy includes all relief claimed at the time of removal to 12 which the plaintiff would be entitled if [they] prevail.”) (internal quotation marks and 13 citation omitted). 14 Actual Damages 15 16 Defendant contends Plaintiff could recover the price he paid for the truck, about 17 $35,000. Plaintiff seeks reimbursement of the actual price paid. Cal. Civ. Code § 1793.2. 18 Plaintiff nevertheless argues Defendant cannot rely on the total price paid as a 19 calculation of potential damages because it does not account for the mileage offset 20 authorized under the Act.2 21 However, the potential offset does not alter the amount Plaintiff might obtain if he 22 is successful at trial (i.e., what is at stake). Arias, 936 F.3d at 927. The offset is not 23 automatic. Defendant would need to affirmatively (and successfully) raise it at trial 24 25 26 1 The parties do not dispute that there is diversity of citizenship. 27 2 The formula to calculate the mileage offset is: (number of miles driven prior to first repair attempt) / (120,000 miles) x (vehicle purchase price). Cal. Civ. Code 28 1 (likely through the introduction of evidence). See Cal. Civ. Code §1793.2 (“when 2 restitution is made . . . the manufacturer . . . may [reduce the amount] . . . directly 3 attributable to [the prior] use.”) (emphasis added); Niedermeier v. FCA US LLC, 56 Cal. 4 App. 5th 1052, 1064 (2020) (“the Act permits a manufacturer to reduce the restitution.”) 5 (emphasis added); see also California Civil Jury Instruction (CACI) No. 3241 (indicating 6 the defendant has the burden to prove the number of miles the plaintiff drove prior to first 7 returning the car to cure the defect).3 The failure to do that might require Defendant to 8 reimburse Plaintiff for the entire purchase price. See Cal. Civ. Code § 1793.2(d)(2)(B). 9 Therefore, it is appropriate to rely on the total amount paid to determine the amount in 10 controversy.4 Fritsch, 899 F.3d at 793; see Chavez v. JPMorgan Chase & Co., 888 F.3d 11 413, 417 (9th Cir. 2018) (explaining the amount in controversy includes all amounts “at 12 stake” in the litigation at the time of removal, “whatever the likelihood that [the plaintiff] 13 will actually recover them.”); see also Lewis v. Verizon Communs., Inc., 627 F.3d 395, 14 15 16 3 There are several potential disputes that may arise as to the application of the mileage 17 offset. For instance, the manufacturer might not have reliable records that reflect the odometer reading from when the buyer first brought the car to the repair shop to cure the 18 defect. The parties might also dispute whether a defect existed at the time of the first 19 visit, etc. This is not the appropriate stage to decide such issues. See Geographic Expeditions, Inc. v. Estate of Lhota, 599 F.3d 1102, 1108 (9th Cir.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SALDIVAR, Case No.: 3:22-cv-577-L-WVG
12 Plaintiff,
13 v. ORDER DENYING PLAINTIFF’S 14 FCA US LLC, MOTION TO REMAND 15 Defendant. 16 17 Pending before the Court in this lemon law action is Plaintiff’s motion to remand. 18 Defendant opposed, and Plaintiff replied. The Court decides the matter on the papers 19 submitted and without oral argument. Civ. L. R. 7.1. For the reasons stated below, the 20 motion is DENIED. 21 I. BACKGROUND 22 On December 18, 2019, Plaintiff purchased a 2019 RAM 1500 from Defendant. 23 The purchase price was $35,594.90. Plaintiff alleges the vehicle has defects that 24 substantially impair its use, value, and safety. Plaintiff also alleges Defendant failed to 25 cure the defects or replace/repurchase the vehicle. 26 On March 21, 2022, Plaintiff filed this action in San Diego Superior Court. 27 Plaintiff asserts two claims under the Song-Beverly Act. On April 25, 2022, Defendant 28 1 removed this action to the Southern District of California. Plaintiff now seeks to remand 2 it back to state court. 3 Plaintiff seeks “recession of the purchase contract and restitution of all monies 4 expended.” (Complaint at p. 5). Plaintiff also seeks a “civil penalty in the amount of two 5 times Plaintiff’s actual damages.” Id. 6 II. LEGAL STANDARD 7 Federal courts have limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of 8 Am., 511 U.S. 375, 377 (1994). A defendant may remove an action from state court to 9 federal court if the action could have been brought in federal court in the first instance. 28 10 U.S.C. § 1441(a). The removal is proper when a case originally filed in state court 11 presents a federal question or where there is diversity of citizenship among the parties 12 and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a). 13 14 “The burden of establishing federal jurisdiction is on the party invoking federal 15 jurisdiction.” United States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008); Abrego Abrego 16 v. The Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006). 17 To determine whether the amount in controversy is met, courts look to the 18 complaint itself. Abrego Abrego, 443 F.3d at 690. “Where it is not facially evident from 19 the complaint that more than $75,000 is in controversy, the removing party must prove” it 20 is more likely than not “that the amount in controversy meets the jurisdictional 21 threshold.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 22 2003). 23 “The removal statute is strictly construed, and any doubt about the right of removal 24 requires resolution in favor of remand.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 25 1241, 1244 (9th Cir. 2009). 26 27 28 1 III. DISCUSSION 2 In this case, the dispute concerns whether the amount in controversy requirement is 3 met.1 Defendant argues the amount exceeds $75,000. To support that calculation, it relies 4 on the potential actual damages, consequential damages, civil penalties, and attorneys’ 5 fees. Plaintiff argues Defendant failed to show the amount in controversy exceeds the 6 threshold. 7 “The amount in controversy reflects the maximum recovery the plaintiff could 8 reasonably recover.” Arias v. Residence Inn, 936 F.3d 920, 927 (9th Cir. 2019) (emphasis 9 original); Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 793 (9th Cir. 2018) 10 (“the amount in controversy is the amount at stake in the underlying litigation, and 11 therefore the amount in controversy includes all relief claimed at the time of removal to 12 which the plaintiff would be entitled if [they] prevail.”) (internal quotation marks and 13 citation omitted). 14 Actual Damages 15 16 Defendant contends Plaintiff could recover the price he paid for the truck, about 17 $35,000. Plaintiff seeks reimbursement of the actual price paid. Cal. Civ. Code § 1793.2. 18 Plaintiff nevertheless argues Defendant cannot rely on the total price paid as a 19 calculation of potential damages because it does not account for the mileage offset 20 authorized under the Act.2 21 However, the potential offset does not alter the amount Plaintiff might obtain if he 22 is successful at trial (i.e., what is at stake). Arias, 936 F.3d at 927. The offset is not 23 automatic. Defendant would need to affirmatively (and successfully) raise it at trial 24 25 26 1 The parties do not dispute that there is diversity of citizenship. 27 2 The formula to calculate the mileage offset is: (number of miles driven prior to first repair attempt) / (120,000 miles) x (vehicle purchase price). Cal. Civ. Code 28 1 (likely through the introduction of evidence). See Cal. Civ. Code §1793.2 (“when 2 restitution is made . . . the manufacturer . . . may [reduce the amount] . . . directly 3 attributable to [the prior] use.”) (emphasis added); Niedermeier v. FCA US LLC, 56 Cal. 4 App. 5th 1052, 1064 (2020) (“the Act permits a manufacturer to reduce the restitution.”) 5 (emphasis added); see also California Civil Jury Instruction (CACI) No. 3241 (indicating 6 the defendant has the burden to prove the number of miles the plaintiff drove prior to first 7 returning the car to cure the defect).3 The failure to do that might require Defendant to 8 reimburse Plaintiff for the entire purchase price. See Cal. Civ. Code § 1793.2(d)(2)(B). 9 Therefore, it is appropriate to rely on the total amount paid to determine the amount in 10 controversy.4 Fritsch, 899 F.3d at 793; see Chavez v. JPMorgan Chase & Co., 888 F.3d 11 413, 417 (9th Cir. 2018) (explaining the amount in controversy includes all amounts “at 12 stake” in the litigation at the time of removal, “whatever the likelihood that [the plaintiff] 13 will actually recover them.”); see also Lewis v. Verizon Communs., Inc., 627 F.3d 395, 14 15 16 3 There are several potential disputes that may arise as to the application of the mileage 17 offset. For instance, the manufacturer might not have reliable records that reflect the odometer reading from when the buyer first brought the car to the repair shop to cure the 18 defect. The parties might also dispute whether a defect existed at the time of the first 19 visit, etc. This is not the appropriate stage to decide such issues. See Geographic Expeditions, Inc. v. Estate of Lhota, 599 F.3d 1102, 1108 (9th Cir. 20 2010) (“if a district court had to evaluate every possible defense that could reduce 21 recovery below the jurisdictional amount the district court would essentially have to decide the merits of the case before it could determine it had subject matter 22 jurisdiction”); (see also Motion to Remand at p. 6 n.1) (noting Plaintiff does not agree or 23 stipulate to any “particular offset” and that discovery is ongoing). 4 Statutory limits on recoverable damages are distinct from offsets. Compare Morris v. 24 Hotel Riviera, Inc., 704 F.2d 1113, 1115 (9th Cir. 1983) (court properly considered a 25 statute that limited the amount an individual could receive for a particular claim to $750 when determining amount in controversy). The offset here is more akin to an affirmative 26 defense. See e.g., St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) 27 (“the fact that the complaint discloses the existence of a valid defense to the claim” cannot be grounds for showing failure to meet the amount in controversy requirement); 28 1 400 (9th Cir. 2010) (“the amount in controversy is simply an estimate of the total amount 2 in dispute, not a prospective assessment of defendant’s liability.”) The amount at stake is 3 at least $35,549.90. 4 Civil Penalties 5 Defendant also relies on Plaintiff’s request for civil penalties to support the amount 6 in controversy. The Court can consider the potential civil penalties. See, e.g., Chabner v. 7 United Omaha Life Ins. Co., 225 F.3d 1042, 1046 n.3 (9th Cir. 2000) (noting treble 8 damages may be considered when determining the amount in controversy). 9 10 The Act authorizes an award of civil penalties if the car manufacturer willfully 11 refused to cure the defect. Cal. Civ. Code § 1794(c). The maximum penalty is two times 12 the amount of actual damages. Id. 13 Plaintiff argues the Court should not consider the potential civil penalties because 14 it is too speculative. (Motion to Remand at p. 7-8). The Court disagrees. First, the Act 15 sets forth a specific limit on the amount of civil penalties recoverable. Cal. Civ. Code § 16 1794(c). More importantly, Plaintiff requests the full amount authorized under the Act, 17 two times actual damages. (Complaint at p. 5). And the test is what amount Plaintiff put 18 in controversy, not Defendant’s potential liability. Lewis, 627 F.3d at 400. There is 19 nothing in the record to suggest Plaintiff improperly requested the full amount of 20 penalties. Therefore, the Court will consider that amount. St. Paul Mercury Indem. Co., 21 303 U.S. at 288 (“the sum claimed . . . controls if the claim is apparently made in good 22 faith.”)5 23 24 25 5 The request for civil penalties is distinguishable from punitive damages. Normally, a plaintiff does not 26 request a specific amount of punitive damages. As a result, it may be difficult, without more information (e.g., awards from analogous cases), to determine the amount put in controversy. See, e.g., Matheson v. 27 Progressive Specialty Ins. Co., 319 F.3d 1089, 1091 (9th Cir. 2003) (complaint indicating the plaintiff sought punitive damages “‘in excess’ of $10,000,” not “how much ‘in excess.’”) Here, Plaintiff 28 1 Overall, Defendant met its burden. The potential actual damages combined with 2 || the requested civil penalties surpasses the minimum amount in controversy. The Court 3 || will therefore not address the parties’ arguments related to other damages and attorneys’ 4 || fees. > IV. CONCLUSION For the reasons stated above, the Court DENIES Plaintiff's motion to remand. 8 IT IS SO ORDERED. 9 Dated: August 8, 2022 , 10 11 H . James Lorenz, United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “at stake” in the litigation at the time of removal, “whatever the likelihood that [the plaintiff] will actually recover them.”)