1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 TOMAS RAMIREZ, Case No. 2:23-cv-04204-FLA (ASx)
12 Plaintiff, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 FCA US, LLC, et al., 15 Defendants. 16
17 18 19 20 21 22 23 24 25 26 27 28 1 RULING 2 On April 28, 2023, Plaintiff Tomas Ramirez (“Plaintiff”) initiated this action 3 against Defendants FCA US, LLC (“FCA”) and DOES 1 through 20 in the Los 4 Angeles County Superior Court. Dkt. 1-1. Plaintiff brings, among others, two claims 5 under the Song-Beverly Act and one under the Magnuson-Moss Warranty Act. Id. 6 On May 31, 2023, FCA removed the action to this court based on alleged 7 diversity jurisdiction. Dkt. 1 (“NoR”). On July 31, 2023, the court ordered the parties 8 to show cause why the action should not be remanded for lack of subject matter 9 jurisdiction due to an insufficient amount in controversy. Dkt. 30. Both Plaintiff and 10 FCA filed responses on August 14, 2023. Dkts. 17 (“Pltf. Resp.”), 18 (“Def. Resp.”). 11 In its response, FCA argues both the amount in controversy exceeds $75,000 and the 12 court has “direct jurisdiction to hear Plaintiff’s claim under the Magnuson-Moss 13 Warranty Act.” Def. Resp. at 2–5. 14 Having reviewed FCA’s Notice of Removal and the responses to this court’s 15 order to show cause, and for the following reasons, the court finds FCA fails to 16 establish this court’s jurisdiction and accordingly REMANDS the action. 17 DISCUSSION 18 Federal courts are courts of “limited jurisdiction,” possessing only “power 19 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 20 Am., 511 U.S. 375, 377 (1994); U.S. Const. art. III, § 2, cl. 1. Courts are presumed to 21 lack jurisdiction unless the contrary appears affirmatively from the record. See 22 DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006). Additionally, federal 23 courts have an obligation to examine jurisdiction sua sponte before proceeding to the 24 merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). 25 Federal courts have jurisdiction where an action arises under federal law or 26 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 27 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 28 §§ 1331, 1332(a). Accordingly, a defendant may remove a case from state court to 1 federal court pursuant to the federal removal statute, 28 U.S.C. § 1441, on the basis of 2 federal question or diversity jurisdiction. Courts strictly construe the removal statute 3 against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any 4 doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 5 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing 6 federal jurisdiction. Id. 7 A notice removing an action from state court to federal court must include “a 8 plausible allegation that the amount in controversy exceeds the jurisdictional 9 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 10 (2014). Where “the plaintiff contests, or the court questions, the defendant’s 11 allegation” concerning the amount in controversy, “both sides [shall] submit proof,” 12 and the court may then decide whether the defendant has proven the amount in 13 controversy “by a preponderance of the evidence.” Id. at 88–89. “Federal jurisdiction 14 must be rejected if there is any doubt as to the right of removal in the first instance.” 15 Gaus, 980 F.2d at 566. 16 Of relevance here, claims filed under the Magnuson-Moss Warranty Act do not 17 trigger federal question jurisdiction unless the amount in controversy is equal to or 18 greater than “the sum or value of $50,000 (exclusive of interests and costs) computed 19 on the basis of all claims to be determined in this suit.” 28 U.S.C. § 2310(d)(3)(B); 20 Khachatryan v. BMW of N. Am., LLC, Case No. 2:21-cv-01290-PA (PDx), 2021 WL 21 927266, at *2 (C.D. Cal. Mar. 10, 2021). 22 The issue here is whether the amount of money Plaintiff places in controversy is 23 sufficient to invoke jurisdiction. The Magnuson-Moss Warranty Act allows 24 consumers to bring suits for “damages and other legal or equitable relief” when a 25 supplier fails to comply with an obligation under a written or implied warranty. 15 26 U.S.C. § 2310(d)(1). Courts analyze the amount in controversy under Magnusson- 27 Moss using the same principles used to analyze the amount in controversy for 28 purposes of diversity jurisdiction. See Romo v. FFG Ins. Co., 397 F. Supp. 2d 1237, 1 1240 (C.D. Cal. 2005) (“There is nothing in the text of the Magnuson-Moss Act that 2 would indicate that the amount in controversy for the statute is assessed any 3 differently than the diversity jurisdiction requirement found in 28 U.S.C. § 1332.”). 4 The Magnuson-Moss Act does not specify the appropriate measure and type of 5 damages that are available, so “a number of courts, including the Ninth Circuit, have 6 turned to the applicable state law to determine which remedies are available under the 7 Act, which of necessity informs the potential amount in controversy.” Id. at 1239. 8 Here, the applicable state warranty law is the Song-Beverly Act. Accordingly, the 9 court determines whether the remedies available to Plaintiff under the Song-Beverly 10 Act are sufficient to place at least $50,000 in controversy. 11 Based on the evidence and allegations presented in the Notice of Removal and 12 the responses to the court’s order to show cause, the court is unpersuaded that FCA 13 has carried its burden of showing, by a preponderance of the evidence, that either the 14 diversity or Magnuson-Moss amount in controversy requirement has been met here. 15 A. Actual Damages 16 The first remedy at issue is actual damages. Under the Song-Beverly Act, the 17 buyer of a vehicle may recover “in an amount equal to the actual price paid or payable 18 by the buyer,” reduced by an amount “directly attributable to use by the buyer.” Cal. 19 Civ. Code § 1793.2(d)(2)(B)–(C). This reduction, also known as a mileage offset, 20 reduces the buyer’s recovery by an amount directly proportional to the number of 21 miles driven, with each mile driven reducing the purchase price by 1/120,000. See id. 22 § 1793.2(d)(2)(C). 23 Here, FCA argues Plaintiff’s prayer for actual damages places $71,582.88 in 24 controversy, based on the “total sales price of the vehicle,” which includes Plaintiff’s 25 total financing obligations throughout the maturity of the loan. Def. Resp. at 3. FCA 26 further calculates an offset of $4,931, based on the mileage of the vehicle at the time 27 Plaintiff first presented the vehicle for repair. Id. FCA does not present specific 28 allegations about the Magnuson-Moss requirement that the amount in controversy 1 exceed $50,000.
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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 TOMAS RAMIREZ, Case No. 2:23-cv-04204-FLA (ASx)
12 Plaintiff, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 FCA US, LLC, et al., 15 Defendants. 16
17 18 19 20 21 22 23 24 25 26 27 28 1 RULING 2 On April 28, 2023, Plaintiff Tomas Ramirez (“Plaintiff”) initiated this action 3 against Defendants FCA US, LLC (“FCA”) and DOES 1 through 20 in the Los 4 Angeles County Superior Court. Dkt. 1-1. Plaintiff brings, among others, two claims 5 under the Song-Beverly Act and one under the Magnuson-Moss Warranty Act. Id. 6 On May 31, 2023, FCA removed the action to this court based on alleged 7 diversity jurisdiction. Dkt. 1 (“NoR”). On July 31, 2023, the court ordered the parties 8 to show cause why the action should not be remanded for lack of subject matter 9 jurisdiction due to an insufficient amount in controversy. Dkt. 30. Both Plaintiff and 10 FCA filed responses on August 14, 2023. Dkts. 17 (“Pltf. Resp.”), 18 (“Def. Resp.”). 11 In its response, FCA argues both the amount in controversy exceeds $75,000 and the 12 court has “direct jurisdiction to hear Plaintiff’s claim under the Magnuson-Moss 13 Warranty Act.” Def. Resp. at 2–5. 14 Having reviewed FCA’s Notice of Removal and the responses to this court’s 15 order to show cause, and for the following reasons, the court finds FCA fails to 16 establish this court’s jurisdiction and accordingly REMANDS the action. 17 DISCUSSION 18 Federal courts are courts of “limited jurisdiction,” possessing only “power 19 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 20 Am., 511 U.S. 375, 377 (1994); U.S. Const. art. III, § 2, cl. 1. Courts are presumed to 21 lack jurisdiction unless the contrary appears affirmatively from the record. See 22 DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3 (2006). Additionally, federal 23 courts have an obligation to examine jurisdiction sua sponte before proceeding to the 24 merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). 25 Federal courts have jurisdiction where an action arises under federal law or 26 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 27 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 28 §§ 1331, 1332(a). Accordingly, a defendant may remove a case from state court to 1 federal court pursuant to the federal removal statute, 28 U.S.C. § 1441, on the basis of 2 federal question or diversity jurisdiction. Courts strictly construe the removal statute 3 against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any 4 doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 5 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing 6 federal jurisdiction. Id. 7 A notice removing an action from state court to federal court must include “a 8 plausible allegation that the amount in controversy exceeds the jurisdictional 9 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 10 (2014). Where “the plaintiff contests, or the court questions, the defendant’s 11 allegation” concerning the amount in controversy, “both sides [shall] submit proof,” 12 and the court may then decide whether the defendant has proven the amount in 13 controversy “by a preponderance of the evidence.” Id. at 88–89. “Federal jurisdiction 14 must be rejected if there is any doubt as to the right of removal in the first instance.” 15 Gaus, 980 F.2d at 566. 16 Of relevance here, claims filed under the Magnuson-Moss Warranty Act do not 17 trigger federal question jurisdiction unless the amount in controversy is equal to or 18 greater than “the sum or value of $50,000 (exclusive of interests and costs) computed 19 on the basis of all claims to be determined in this suit.” 28 U.S.C. § 2310(d)(3)(B); 20 Khachatryan v. BMW of N. Am., LLC, Case No. 2:21-cv-01290-PA (PDx), 2021 WL 21 927266, at *2 (C.D. Cal. Mar. 10, 2021). 22 The issue here is whether the amount of money Plaintiff places in controversy is 23 sufficient to invoke jurisdiction. The Magnuson-Moss Warranty Act allows 24 consumers to bring suits for “damages and other legal or equitable relief” when a 25 supplier fails to comply with an obligation under a written or implied warranty. 15 26 U.S.C. § 2310(d)(1). Courts analyze the amount in controversy under Magnusson- 27 Moss using the same principles used to analyze the amount in controversy for 28 purposes of diversity jurisdiction. See Romo v. FFG Ins. Co., 397 F. Supp. 2d 1237, 1 1240 (C.D. Cal. 2005) (“There is nothing in the text of the Magnuson-Moss Act that 2 would indicate that the amount in controversy for the statute is assessed any 3 differently than the diversity jurisdiction requirement found in 28 U.S.C. § 1332.”). 4 The Magnuson-Moss Act does not specify the appropriate measure and type of 5 damages that are available, so “a number of courts, including the Ninth Circuit, have 6 turned to the applicable state law to determine which remedies are available under the 7 Act, which of necessity informs the potential amount in controversy.” Id. at 1239. 8 Here, the applicable state warranty law is the Song-Beverly Act. Accordingly, the 9 court determines whether the remedies available to Plaintiff under the Song-Beverly 10 Act are sufficient to place at least $50,000 in controversy. 11 Based on the evidence and allegations presented in the Notice of Removal and 12 the responses to the court’s order to show cause, the court is unpersuaded that FCA 13 has carried its burden of showing, by a preponderance of the evidence, that either the 14 diversity or Magnuson-Moss amount in controversy requirement has been met here. 15 A. Actual Damages 16 The first remedy at issue is actual damages. Under the Song-Beverly Act, the 17 buyer of a vehicle may recover “in an amount equal to the actual price paid or payable 18 by the buyer,” reduced by an amount “directly attributable to use by the buyer.” Cal. 19 Civ. Code § 1793.2(d)(2)(B)–(C). This reduction, also known as a mileage offset, 20 reduces the buyer’s recovery by an amount directly proportional to the number of 21 miles driven, with each mile driven reducing the purchase price by 1/120,000. See id. 22 § 1793.2(d)(2)(C). 23 Here, FCA argues Plaintiff’s prayer for actual damages places $71,582.88 in 24 controversy, based on the “total sales price of the vehicle,” which includes Plaintiff’s 25 total financing obligations throughout the maturity of the loan. Def. Resp. at 3. FCA 26 further calculates an offset of $4,931, based on the mileage of the vehicle at the time 27 Plaintiff first presented the vehicle for repair. Id. FCA does not present specific 28 allegations about the Magnuson-Moss requirement that the amount in controversy 1 exceed $50,000. 2 FCA does not claim, let alone demonstrate, that the May 20, 2022 repair date on 3 which it bases its offset calculation is the first date Plaintiff presented the vehicle for 4 repair because of a specific defect claimed in the Complaint. FCA’s assertion that the 5 “total sales price of the vehicle” should serve as the benchmark for calculating 6 Plaintiff’s actual damages is alone insufficient to meet either the diversity or 7 Magnuson-Moss amount in controversy requirement without adequate consideration 8 of the vehicle offset. 9 B. Civil Penalties 10 FCA’s inclusion of civil penalties to establish the amount in controversy is 11 highly speculative and insufficient to meet its burden. “A plaintiff who establishes 12 that a violation of the [Song-Beverly] Act was willful may recover a civil penalty of 13 up to two times the amount of actual damages.” See Cal. Civ. Code § 1794(c). 14 However, “[t]he civil penalty under California Civil Code § 1794(c) cannot simply be 15 assumed.” Pennon v. Subaru of Am., Inc., Case No. 2:22-cv-03015-SB (RAOx), 2022 16 WL 2208578, at *2 (C.D. Cal. June 17, 2022) (remanding action where defendant 17 provided no specific argument or evidence for including a civil penalty in the amount 18 in controversy) (quoting Castillo v. FCA USA, LLC, Case No. 3:19-cv-151-CAB- 19 MDD, 2019 WL 6607006, at *2 (S.D. Cal. Dec. 5, 2019)). Instead, district courts 20 regularly find that a Song-Beverly Act plaintiff’s boilerplate allegations regarding a 21 defendant’s willfulness are, without more, insufficient to place civil penalties in 22 controversy. Estrada v. FCA US LLC, Case No. 2:20-cv-10453-PA (JPRx), 2021 WL 23 223249, at *3 (C.D. Cal. Jan. 21, 2021) (collecting cases and remanding where 24 defendant’s inclusion of civil penalties to establish amount in controversy was “too 25 speculative and not adequately supported by the facts and evidence.”). This is 26 because “[s]imply assuming a civil penalty award is inconsistent with the principle 27 that the defendant must provide evidence that it is more likely than not that the 28 amount in controversy requirement is satisfied.” Makol v. Jaguar Land Rover N. Am., 1 LLC, Case No. 5:18-cv-03414-NC, 2018 WL 3194424, at *3 (N.D. Cal. June 28, 2 2018) (internal quotation marks removed); see Zawaideh v. BMW of N. Am., LLC, 3 Case No. 2:21-cv-01290-PA (PDx), 2018 WL 1805103, at *2 (S.D. Cal. Apr. 17, 4 2018) (“[T]he defendant must make some effort to justify the assumption.”); see also 5 Khachatryan, 2021 WL 927266 at *2. 6 Here, FCA offers no argument or evidence supporting the potential awarding of 7 civil penalties. Defendant also fails to prove “that it is reasonable to double the 8 amount of actual damages in arriving [at] the size of the likely award.” Pennon, 2021 9 WL 2208578, at *2. 10 C. Attorney’s Fees 11 FCA’s inclusion of attorney’s fees to establish the amount in controversy, 12 likewise, is speculative and insufficient to meet its burden. In the Ninth Circuit, 13 attorney’s fees awarded under fee-shifting statutes may be considered in assessing the 14 jurisdictional threshold. Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 15 649 (9th Cir. 2016). But, before doing so, a removing defendant must “prove that the 16 amount in controversy (including attorneys’ fees) exceeds the jurisdictional threshold 17 by a preponderance of the evidence,” and must “make this showing with summary- 18 judgment-type evidence.” Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 19 795 (9th Cir. 2018). “A district court may reject the defendant’s attempts to include 20 future attorneys’ fees in the amount in controversy if the defendant fails to satisfy this 21 burden of proof.” Id. 22 “While a defendant may meet its burden to establish a reasonable estimate of 23 attorneys’ fees by identifying awards in other cases, those cases must be similar 24 enough to the case at hand that the court can conclude that it is more likely than not 25 that the plaintiff may incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, 26 Case No. 21-cv-00857-TWR (AGS), 2021 WL 4352340, at *6 (S.D. Cal. Sept. 24, 27 2021); cf. D’Amico v. Ford Motor Co., Case No. 2:20-cv-02985-CJC (JCx), 2020 WL 28 2614610, at *4 (C.D. Cal. May 21, 2020) (“[M]any cases alleging violations of the 1 [Song-Beverly] Act settle early.”). Moreover, a defendant fails to show attorney’s 2 fees are part of the amount in controversy where it “makes no effort to explain what 3 amount of attorney fees might be sought or awarded in this case, neglecting to include 4 so much as an estimate of the hour or billing rates that might apply.” Vega v. FCA 5 US, LLC, Case No. 2:21-cv-05128-VAP (MRWx), 2021 WL 3771795, at *4 (C.D. 6 Cal. Aug. 25, 2021); Garcia v. FCA US LLC, Case No. 2:20-cv-04779-VAP (MRWx), 7 2020 WL 4219614, at *3 (C.D. Cal. July 22, 2020). 8 FCA fails in its burden with respect to attorney’s fees. It cites to one case in 9 which the trial court awarded attorney’s fees in an amount of $185,000 and five cases 10 where Plaintiff’s counsel sought attorney’s fees between $60,615 and $203,966. NoR 11 at 10. FCA, however, fails to explain how these actions are similar to cases where 12 courts awarded high attorney’s fees, beyond noting they also involved Song-Beverly 13 Act or Magnusson-Moss Act claims. See id. Further, FCA does not provide or 14 substantiate reasonable lodestar estimates for a potential statutory attorney’s fee award 15 in this action. D’Amico, 2020 WL 2614610, at *4. 16 Prevailing case authority does not support the proposition that district courts 17 weighing subject matter jurisdiction involving Song-Beverly Act or Magnusson-Moss 18 Act claims must assume that the upper extreme of attorney’s fee awards granted in 19 other Song-Beverly Act or Magnusson-Moss Act cases must be included in the 20 amount in controversy. If this were the law, district courts would be unable to remand 21 these cases for insufficient amounts in controversy. District courts, however, 22 regularly do so. See, e.g., D’Amico, 2020 WL 2614610; Sood v. FCA US, LLC, Case 23 No. 2:21-cv-04287-RSWL (SKx), 2021 WL 4786451 (C.D. Cal. Oct. 4, 2021); Vega, 24 2021 WL 3771795, at *3; Garcia, 2020 WL 4219614, at *3. 25 CONCLUSION 26 For the aforementioned reasons, the court finds that FCA has failed to carry its 27 burden in demonstrating that either the Magnuson-Moss or diversity jurisdiction 28 amount in controversy requirement is met here. The court, therefore, REMANDS the 1 | action to the Los Angeles County Superior Court, Case No. 23STCV09484. All dates 2 || and deadlines in this court are VACATED. The clerk of the court shall close the 3 || action administratively. 4 5 IT IS SO ORDERED. 6 7 | Dated: August 24, 2023 8 S ° FERNANDO’L. AENLLE-ROCHA 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28