William Davis v. BMW of North America, LLC

• Court: District Court, C.D. California
• Decided: March 18, 2022
• Docket: 2:22-cv-00439
• Status: Unknown

Opinion

Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 1 of 6 Page ID #:292

1 2 3 4 JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 WILLIAM DAVIS, Case No. 2:22-cv-00439-MCS-PVC 11 Plaintiff, ORDER REMANDING CASE AND 12 DENYING MOTION TO REMAND 13 v. (ECF NO. 11) AS MOOT

14 BMW OF NORTH AMERICA, LLC, 15 et al.,

16 Defendants. 17

18 The Court ordered Defendant BMW of North America, LLC, to show cause why 19 the case should not be remanded to state court. (OSC, ECF No. 12.) Defendant filed a 20 response. (Resp., ECF No. 14.) Plaintiff William Davis did not respond to the order to 21 show cause, but he separately filed a motion to remand, which is fully briefed. (Mot., 22 ECF No. 11; Opp’n, ECF No. 15; Reply, ECF No. 18.) The Court deems the motion 23 appropriate for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. R. 7- 24 15. 25 I. BACKGROUND 26 This is a case brought under the Song-Beverly Consumer Warranty Act (“SBA”). 27 Plaintiff bought a 2016 BMW M235i (“Vehicle”) in October 2019. The Vehicle 28 exhibited defects. Defendant was unable to timely rectify the defects and refused to 1 Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 2 of 6 Page ID #:293

1 repurchase the vehicle or provide restitution. The Complaint seeks replacement of the 2 Vehicle, restitution, damages, a civil penalty, attorney’s fees and costs of suit, interest, 3 and other relief the Court may deem proper. Plaintiff’s civil case cover sheet indicates 4 his demand exceeds $25,000. (See generally Compl., ECF No. 1-2.) 5 Plaintiff initiated this proceeding in the Los Angeles County Superior Court, No. 6 21STCV41810. Asserting diversity jurisdiction, Defendant removed the case to this 7 Court. (Notice of Removal, ECF No. 1.) 8 II. LEGAL STANDARDS 9 A. Subject-Matter Jurisdiction 10 Federal courts are of limited jurisdiction, having subject-matter jurisdiction only 11 over matters authorized by the Constitution and Congress. Kokkonen v. Guardian Life 12 Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove a civil action in 13 state court to federal court if the federal court has original jurisdiction. 28 U.S.C. 14 § 1441(a). Federal courts have original jurisdiction where an action arises under federal 15 law or where each plaintiff’s citizenship is diverse from each defendant’s citizenship 16 and the amount in controversy exceeds $75,000. Id. §§ 1331, 1332(a). 17 There is a “strong presumption” against removal jurisdiction, and the removing 18 party bears the burden of proving that removal is proper. Gaus v. Miles, Inc., 980 F.2d 19 564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt as 20 to the right of removal in the first instance.” Id. 21 B. Amount in Controversy 22 To invoke diversity jurisdiction, a party must demonstrate that there is complete 23 diversity of citizenship between the parties and that the amount in controversy exceeds 24 the sum or value of $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). 25 “[W]here it is unclear or ambiguous from the face of a state-court complaint whether 26 the requisite amount in controversy is pled,” the removing defendant must establish by 27 a preponderance of the evidence that the amount in controversy “more likely than not” 28 exceeds $75,000. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2 Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 3 of 6 Page ID #:294

1 2007); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 2 III. DISCUSSION 3 The amount in controversy is not clear from the face of the Complaint. Plaintiff 4 does not plead any specific amount in controversy, but the civil case cover sheet 5 submitted to the state court with the Complaint indicates the amount demanded exceeds 6 $25,000. (Stefatos Decl. Ex. A, at 5, ECF No. 1-2.) Plaintiff’s pleading does not clearly 7 indicate whether the total amount Plaintiff seeks exceeds $75,000. Cf. Schneider v. Ford 8 Motor Co., 441 F. Supp. 3d 909, 913 (N.D. Cal. 2020) (“[T]he Complaint alleges that 9 Plaintiff suffered damages in a sum to be proven at trial in an amount that is not less 10 than $25,001.00. Hence, while Plaintiff seeks restitution for the value of the car, civil 11 penalties, and attorneys’ fees and costs, it is unclear whether all these damages are 12 subsumed within the request for $25,001.” (internal quotation marks and citation 13 omitted)). Thus, Defendant must show that the amount in controversy more likely than 14 not exceeds $75,000. 15 A. Actual Damages 16 Actual damages under the SBA are “equal to the actual price paid or payable by 17 the buyer,” minus the reduction in value “directly attributable to use by the buyer.” Cal. 18 Civ. Code § 1793.2(d)(2)(B)–(C). The reduction is based on miles driven before the 19 first attempted repair of the defect. Id. 20 Defendant submits that actual damages are $35,655.77, the total consideration 21 for sale of the Vehicle. (Resp. 3; Stefatos Decl. Ex. A, ECF No. 14-2.) But the full 22 purchase price is not the proper measure of damages. The mileage offset provided in 23 Civil Code section 1793.2 should be considered in evaluating the amount in 24 controversy. See D’Amico v. Ford Motor Co., No. CV 20-2985-CJC (JCx), 2020 U.S. 25 Dist. LEXIS 90921, at *6–7 (C.D. Cal. May 21, 2020) (collecting remand decisions in 26 which defendants failed to account for mileage offset). 27 Defendant argues that no mileage offset should be applied because Plaintiff 28 alleges the Vehicle was defective at the time it was sold. (Resp. 3–4.) Defendant’s 3 Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 4 of 6 Page ID #:295

1 position finds no purchase in the text of the SBA, and Defendant provides no legal 2 authority supporting its argument. 3 Defendant fails to show that the full price of the Vehicle is the proper measure of 4 actual damages. Without presenting a cogent argument or evidence as to the appropriate 5 offset, Defendant fails to substantiate the measure of actual damages. 6 B. Civil Penalties 7 Plaintiff may be entitled to a civil penalty no greater than twice the amount of 8 actual damages only if Defendant’s violations were willful. Cal. Civ. Code § 1794(c). 9 However, in the jurisdictional analysis, “[t]he civil penalty . . . cannot simply be 10 assumed”; instead, “the defendant must make some effort to justify the assumption.” 11 D’Amico, 2020 U.S. Dist. LEXIS 90921, at *8 (internal quotation marks omitted) 12 (collecting cases). Courts do not include civil penalties in the jurisdictional analysis 13 “unless the removing defendant makes some showing regarding the possibility of civil 14 damages.” Savall v. FCA US LLC, No. 21cv195 JM (KSC), 2021 U.S. Dist. LEXIS 15 81477, at *7–8 (S.D. Cal. Apr. 28, 2021) (collecting cases). 16 Defendant asserts that the Court should consider the maximum civil penalty when 17 evaluating the amount in controversy because Plaintiff pleads entitlement to the 18 maximum penalty. (Resp. 2–3.) Acknowledging a split in authority, the Court 19 respectfully declines to follow the line of cases Defendant cites. See Savall, 2021 U.S. 20 Dist. LEXIS 81477, at *6–8 (collecting cases on either side of the split, and reasoning 21 that if “boilerplate allegations [concerning willfulness] were sufficient to defeat 22 remand, then virtually any [SBA] action involving a new vehicle purchase would 23 remain in federal court”). Defendant presents no evidence that a civil penalty is likely 24 to be awarded in this case, let alone evidence justifying the maximum penalty. See, e.g., 25 id. at *8 (“Other than referring to Plaintiff’s allegation that FCA acted willfully, 26 however, FCA provides no support for the likelihood that a civil penalty based on its 27 willfulness would actually be awarded in this case, or that the full civil penalty would 28 be awarded.”); Chajon v. Ford Motor Co., No. 2:18-cv-10533-RGK (RAOx), 2019 U.S. 4 Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 5 of 6 Page ID #:296

1 Dist. LEXIS 4254, at *3–4 (C.D. Cal. Jan. 8, 2019) (“As to civil penalties, while 2 authorized under the Song-Beverly Act, Defendants have not offered any evidence to 3 support such an award.”). Defendant has not established that the requested civil penalty 4 is more likely than not in controversy. 5 Even if Defendant could support its argument for a civil penalty with evidence, 6 because Defendant fails to establish actual damages beyond speculation, it fails to show 7 the proper measure of the civil penalty. See Edwards v. Ford Motor Co., No. CV 16- 8 05852 BRO (PLAx), 2016 U.S. Dist. LEXIS 153618, at *14 (C.D. Cal. Nov. 4, 2016) 9 (“Defendant failed to establish the amount of actual damages at issue, which is 10 necessary to determine the total civil penalty.”); cf. D’Amico, 2020 U.S. Dist. LEXIS 11 90921, at *9 (“[T]here is no basis for concluding that the amount payable under the 12 lease even roughly approximates Plaintiff’s actual damages. There is equally little basis 13 for concluding that a civil penalty of double that amount would be awarded.”). 14 C. Fees 15 “Section 1332(a)’s amount-in-controversy requirement excludes only ‘interest 16 and costs’ and therefore includes attorneys’ fees.” Guglielmino, 506 F.3d at 700; Fritsch 17 v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018) (“[A] court must 18 include future attorneys’ fees recoverable by statute or contract when assessing whether 19 the amount-in-controversy requirement is met.”). 20 Defendant argues that the Court should consider prospective fees, but it provides 21 no estimate of the fees that are likely to be incurred in this case. (Resp. 4–5.) 22 Defendant’s assumption that the fees in this matter will push the amount in controversy 23 over the jurisdictional threshold is speculative at best. Cf. Schneider, 441 F. Supp. 3d at 24 914 (finding burden unmet where “Defendants fail to provide the Court with specific 25 evidence showing the attorneys’ fees in this case are ‘more likely than not’” to bring 26 the amount in controversy above the jurisdictional threshold); D’Amico, 2020 U.S. Dist. 27 LEXIS 90921, at *11 (finding burden unmet where defendant failed to “provide an 28 estimate of the hours that will be incurred”). 5 Case 2:22-cv-00439-MCS-PVC Document 21 Filed 03/18/22 Page 6 of 6 Page ID #:297

1 D. Summary 2 The amount in controversy is not clear from the face of the Complaint. Defendant 3 fails to present evidence establishing that the amount in controversy more likely than 4 not exceeds $75,000. Accordingly, Defendant has not shown the Court has subject- 5 matter jurisdiction over the case. Remand is appropriate. 28 U.S.C. § 1447(c). 6 The motion to remand is denied as moot. The Court also denies Plaintiff’s request 7 for fees he incurred due to removal. (Mot. 12–15.) Defendant had an objectively 8 reasonable basis upon which to remove the case given the intracircuit conflict on 9 whether the maximum civil penalty may contribute to the amount in controversy upon 10 a plaintiff’s boilerplate allegations of willful conduct. See Savall, 2021 U.S. Dist. 11 LEXIS 81477, at *6–8; see also Gardner v. UICI, 508 F.3d 559, 561 (9th Cir. 2007) 12 (“[C]ourts may award attorney’s fees under § 1447(c) only where the removing party 13 lacked an objectively reasonable basis for seeking removal.”). 14 IV. CONCLUSION 15 The Court remands the case to the Los Angeles County Superior Court, No. 16 21STCV41810. The Court directs the Clerk to effect the remand and close the case. The 17 Court denies the motion to remand as moot. 18

19 IT IS SO ORDERED. 20

21 Dated: March 18, 2022 22 MARK C. SCARSI 23 UNITED STATES DISTRICT JUDGE

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