Isela Hernandez v. FCA US, LLC

[2] JS6 [7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA [11] 12 ISELA HERNANDEZ, an ) CV 20-1058-RSWL-MAA individual, ) 13 ) Plaintiff, ) ORDER re: Plaintiff’s 14 ) Motion to Remand [8] ) 15 v. ) ) 16 ) FCA US, LLC, a Delaware ) 17 Limited Liability Company; ) and DOES 1 through 20, ) 18 inclusive, ) ) 19 Defendants. 20 Plaintiff Isela Hernandez (“Plaintiff”) brings this 21 Action against Defendant FCA US, LLC (“Defendant”) for 22 violations of California's Song-Beverly Consumer 23 Warranty Act (the “Song-Beverly Act”). Currently 24 before the Court is Plaintiff’s Motion to Remand 25 (“Motion”) [8]. Having reviewed all papers submitted 26 pertaining to the Motion, the Court NOW FINDS AND RULES 27 AS FOLLOWS: GRANTS Plaintiff’s Motion. 28 /// 1 I. BACKGROUND 2 A. Factual Background 3 Plaintiff alleges Defendant manufactured and/or 4 distributed a 2015 Jeep Grand Cherokee, Vehicle 5 Identification Number 1C4RJECG9FC915303 (the 6 “Vehicle”). Ex. A to Decl. of Barbara R. Adams in 7 Supp. of Notice of Removal, Compl., ¶ 4 (“Compl.”), ECF 8 No. 1-1. Plaintiff alleges she leased the Vehicle on 9 or about May 10, 2016. Id. ¶ 5. 10 Plaintiff alleges that the Vehicle developed 11 various defects, including issues with the canister 12 software, water leaks, an inoperable passenger seat, 13 and an unstable engine, among multiple others. Id. ¶ 14 10. Plaintiff further alleges she delivered the 15 Vehicle to Defendant's authorized service and repair 16 facilities on at least ten occasions. Id. ¶ 9. 17 Plaintiff alleges that Defendant failed to conform the 18 Vehicle to the applicable warranties as shown by the 19 defects existing after a reasonable number of repair 20 attempts. Id. ¶ 12. 21 B. Procedural Background 22 Plaintiff filed her Complaint [1-1] in the Superior 23 Court of the State of California, County of Los 24 Angeles, on December 19, 2019, alleging Defendant 25 violated the Song-Beverly Act. Defendant removed this 26 Action to this Court on January 1, 2020 [1]. Plaintiff 27 filed the instant Motion to Remand [8] on April 20, 28 2020. Defendant filed its Opposition [9] on April 28, 1 2020, and Plaintiff replied [10] on May 5, 2020. 2 II. DISCUSSION 3 A. Legal Standard 4 Civil actions may be removed from state court if 5 the federal court has original jurisdiction. See 6 Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28 , 33 7 (2002) (“Under the plain terms of § 1441(a), in order 8 properly to remove [an] action pursuant to that 9 provision, . . . original subject-matter jurisdiction 10 [must] lie[] in the federal courts.”). Diversity 11 jurisdiction exists in all civil actions between 12 citizens of different states where the amount in 13 controversy exceeds $75,000, exclusive of interest and 14 costs. 28 U.S.C. § 1332 . There must be complete 15 diversity of citizenship, meaning “each of the 16 plaintiffs must be a citizen of a different state than 17 each of the defendants.” Morris v. Princess Cruises, 18 Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing 19 Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)). 20 Federal question jurisdiction exists in “all civil 21 actions arising under the Constitution, laws, or 22 treaties of the United States.” 28 U.S.C. § 1331 . 23 “The burden of establishing jurisdiction falls on 24 the party invoking the removal statute, which is 25 strictly construed against removal.” Sullivan v. First 26 Affiliated Sec., Inc., 813 F.2d 1368 , 1371 (9th Cir. 27 1987) (internal citations omitted). Courts resolve all 28 ambiguities “in favor of remand to state court.” 1 Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th 2 Cir. 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564 , 3 566 (9th Cir. 1992)). A removed case must be remanded 4 “[i]f at any time before final judgment it appears that 5 the district court lacks subject matter jurisdiction.” [6] 28 U.S.C. § 1447 (c). 7 B. Discussion 8 Plaintiff contends that this Court lacks subject 9 matter jurisdiction over this Action so it should be 10 remanded to state court.1 The Court undisputably lacks 11 federal question jurisdiction; therefore, the issue is 12 whether the Court has diversity jurisdiction. 13 1. Amount in Controversy 14 When a defendant removes a complaint to federal 15 court, the defendant’s burden with respect to the [16] 1 In addition to lack of subject matter jurisdiction, 17 Plaintiff argues that this Action should be remanded because Defendant failed to give notice to the Los Angeles Superior Court 18 that the case had been remanded. See Mot. 6:16-20, ECF No. 8. Specifically, Plaintiff contends that the “Notice of Removal 19 states that Plaintiff filed this action in the Superior Court of the State of California for the County of San Luis Obispo,” and [20] that a copy of the Notice of Removal “ will be provided to the 21 Clerk of the San Luis Obispo Superior Court.” Id. at 6:9-15 . Plaintiff maintains that the Notice of Removal is thereby 22 procedurally defective because this Action was originally filed in the Los Angeles Superior Court. Id. at 6:18-20 . But, 23 Defendant, in its Opposition, clarified that the reference to the San Luis Obispo Superior Court was a typographical error, and 24 insisted that proper notice was provided to the Los Angeles Superior Court. See Opp’n 4:7-12, ECF No. 9. The Court finds 25 that proper notice was provided to the Los Angeles Superior Court on January 31, 2020, see Ex. 2 in Supp. of Opp’n, ECF No. 9-3, [26] and that an amended notice was also given to the Los Angeles 27 Superior Court on February 7, 2020, see Ex. 3 in Supp. of Opp’n, ECF No. 9-4. Accordingly, the Court DENIES Plaintiff’s Motion as 28 it related to the argument that remand is proper because notice was not provided to the Los Angeles Superior Court. 1 amount in controversy varies depending on the 2 circumstances. Guglielmino v. McKee Foods Corp., 506 3 F.3d 696, 699 (9th Cir. 2007). But “where it is 4 unclear or ambiguous from the face of a state-court 5 complaint whether the requisite amount in controversy 6 is pled,” the applicable standard is by a preponderance 7 of the evidence; this requires that the defendant offer 8 evidence establishing that it is more likely than not 9 that the amount in controversy is met, exclusive of 10 costs and interest. Id. (citing Sanchez v. Monumental 11 Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). In 12 considering whether the removing defendant has 13 satisfied its burden, the court “may consider facts in 14 the removal petition,” and “‘summary-judgment-type 15 evidence relevant to the amount in controversy at the 16 time of removal.’” Singer v State Farm Mut. Auto. Ins. 17 Co., 116 F.3d 373, 377 (9th Cir. 1997) (quoting Allen 18 v. R & H Oil & Gas. Co., 63 F.3d 1326, 1335-36 (5th 19 Cir. 1995)). 20 Here, Plaintiff’s Complaint alleges that “[t]he 21 amount in controversy exceeds twenty-five thousand 22 dollars ($25,000.00), exclusive of interest and 23 costs . . . .” Compl. ¶ 13. Further, “Plaintiff seeks 24 damages from Defendant[] . . . for incidental, 25 consequential, exemplary, and actual damages including 26 interest, costs, and actual attorneys’ fees.” Id. 27 Given that Plaintiff’s Complaint does not clearly 28 indicate that the $75,000 minimum amount in controversy 1 is met, Defendant has the burden of showing by a 2 preponderance of evidence that the jurisdictional 3 minimum has been satisfied. 4 i. Actual Damages 5 Plaintiff seeks to recover from Defendant’s alleged 6 violations of the implied and expressed warranties 7 under the Song-Beverly Act, Cal. Civ. Code § 1792 and 8 Cal Civ Code § 1793.2, respectively. Actual damages 9 under the Song-Beverly Act are the “amount equal to the 10 actual price paid or payable by the buyer,” less the 11 reduction in value “directly attributable to use by the 12 buyer.” Cal. Civ. Code § 1793.2 (d)(2)(B)-(C). To 13 determine the amount directly attributable to the 14 buyer’s use of the vehicle, the manufacturer multiplies 15 the price of the vehicle the buyer paid or will pay by 16 a fraction—the denominator is 120,000, and the 17 numerator is the number of miles the buyer drove the 18 car before the first relevant repair. Id. This 19 calculation provides the actual damages that Plaintiff 20 suffered. 21 Defendant first attempts to demonstrate that the 22 minimum amount in controversy has been met by claiming 23 that “Plaintiff is seeking rescission of the contract,” 24 Notice of Removal 5:2, ECF No. 1, which would result in 25 “the contract’s entire value, without offset, [a]s the 26 amount in controversy,” id. (citing Jadair, Inc. v. 27 Walt Keeler Co., 679 18 F.2d 131 , 133 n. 5 (7th 28 Cir.1982)). However, Defendant’s reading of 1 Plaintiff’s Complaint is mistaken, as the Complaint 2 explicitly prays for “replacement or 3 restitution . . . .” Compl. 8:1-4. 4 Next, Defendant attempts to establish that the 5 minimum amount in controversy has been met by relying 6 on the purchase price of the Vehicle. See Notice of 7 Removal 5:4-8 (“Based on the reasonable purchase value 8 of the subject vehicle, the civil penalties prayed for 9 by Plaintiff in twice that amount, together with 10 attorney fees, costs and expenses, the total 11 ascertainable damages sought by Plaintiffs, there can 12 be no question that the amount in controversy therefore 13 satisfies the $75,000 minimum in this case.”). 14 Specifically, Defendant argues that “[t]he invoice 15 price of the Subject Vehicle was $43,666.00 . . . . 16 Thus, the claimed civil penalty on this amount would be 17 up to $87,332.00 - leaving an amount in controversy of 18 roughly $130,998.2.” Opp’n 8:21-24. But, Plaintiff 19 maintains that a “proper Song-Beverly restitution 20 amount would require [Defendant] to account for the 21 amount that Plaintiff has thus far paid towards the 22 Vehicle, and the amount of miles she has driven the 23 vehicle,” but “[n]one of these are accounted for in 24 [Defendant]’s Notice of Removal, and these facts have 25 not yet been determined or resolved . . . .” Mot. 26 8:11-18. 27 Plaintiff is correct that the Court should consider 28 the amount of miles Plaintiff has driven the Vehicle, 1 or the mileage offset, in determining whether the 2 requisite amount in controversy has been met. See 3 Cortez Martinez v. Ford Motor Co., No. 1:18-CV-016074 LJO-JLT, 2019 WL 1988398 , at *4 (E.D. Cal. May 6, 2019) 5 (citing Schneider v. Ford Motor Co., 756 Fed. Appx. 6 699, 701 (9th Cir. 2018) (unpublished)) (“The appellate 7 court noted the district court’s consideration of the 8 use offset under the Song-Beverly Act to determine the 9 jurisdictional amount in controversy was valid.”). The 10 set-off amount is determined by multiplying the 11 “‘actual price of the new motor vehicle paid or payable 12 by the buyer . . . by a fraction having its denominator 13 120,000 and having as its numerator the number of miles 14 traveled by the new motor vehicle prior to the time the 15 buyer delivered the vehicle’” for correction of the 16 problem. Maciel v. BMW of N. Am., LLC, No. CV 1717 04268-SJO-AJWX, 2017 WL 8185859 , at *2 (C.D. Cal. Aug. 18 7, 2017) (quoting Cal. Civ. Code § 1793.2 (d)(2)(c)). 19 Here, Defendant neglected to take into account the 20 mileage offset when alleging that the amount in 21 controversy exceeds the jurisdictional minimum. 22 Accordingly, Defendant has failed to prove actual 23 damages by a preponderance of the evidence. See 24 Schneider v. Ford Motor Co., 756 F. Appx. 699 , 701 n. 3 25 (9th Cir. 2018) (“Consideration of the [u]se [o]ffset 26 [is] appropriate” in determining the amount in 27 controversy as the circuit has “recognized that an 28 estimate of the amount in controversy must be reduced 1 if a specific rule of law or measure of damages limits 2 the amount of damages recoverable.”) (internal 3 quotation marks omitted)); Michael Day v. FCA US LLC, 4 No. ED CV 20-0615-FMO-EX, 2020 WL 3047986 , at *2 (C.D. 5 Cal. June 8, 2020) (“However, FCA has failed to take 6 into account any reduction for the use of the vehicle, 7 and thus has failed to show that the amount in 8 controversy exceeds the jurisdictional threshold.”) 9 (internal citations omitted)); Mullin v. FCA US, LLC, [10] 2020 WL 2509081 , *3 (C.D. Cal. May 14, 2020) (“Because 11 Defendants neglected to take the mileage offset into 12 account, they failed to meet their burden of showing 13 Plaintiff’s actual damages based on the purchase price 14 of the vehicle.”); Maciel, 2017 WL 8185859 , at *2 15 (finding amount in controversy not satisfied given 16 defendant’s failure to consider set-off amount). 17 The Court is unpersuaded by Defendant’s reading of 18 the Complaint and thus finds that Defendant has not met 19 its burden of proving Plaintiff’s actual damages based 20 on the purchase price of the Vehicle. 21 ii. Civil Penalties 22 The amount in controversy for diversity 23 jurisdiction may include punitive damages if 24 recoverable under state law. Brady v. Mercedes-Benz 25 USA, Inc., 243 F. Supp. 2d 1004, 1009 (N.D. Cal. 2002) 26 (citing Davenport v. Mutual Ben. Health & Acc. Ass’n, [27] 325 F.2d 785, 787 (9th Cir. 1963)). The Song-Beverly 28 Act does not provide for punitive damages but “[c]ourts 1 have held that the civil penalty under [Song-Beverly] 2 is akin to punitive damages, because both have the dual 3 effect of punishment and deterrence for defendants.” [4] Id. (citations omitted). Moreover, “courts have held 5 in other contexts that treble damages authorized by 6 state law may be included in determining the amount in 7 controversy” and Song-Beverly “in effect authorizes 8 treble damages.” Id. (citations omitted). Therefore, 9 the Court can include the Song-Beverly Act’s civil 10 penalty damages in the amount in controversy 11 calculation. 12 The amount recoverable under the Song-Beverly Act 13 is up to two times the amount of actual damages 14 Plaintiff suffered. Brady, 243 F. Supp. at 1009. “If 15 the amount of actual damages is speculative, however, 16 an attempt to determine the civil penalty is equally 17 uncertain.” Chavez v. FCA US LLC, No. CV 19-06003-ODW18 GJSX, 2020 WL 468909 , at *2 (C.D. Cal. Jan. 27, 2020) 19 (citing Edwards v. Ford Motor Co., No. CV 16-05852-BRO20 PLAX, 2016 WL 6583585 , at *4 (C.D. Cal. Nov. 4, 2016)). 21 Accordingly, because the amount of actual damages in 22 uncertain, the Court is unable to determine what civil 23 penalties might be imposed. Put differently, Defendant 24 has failed to satisfy the burden of proof necessary to 25 include civil penalties in the amount in controversy. 26 iii. Attorneys’ Fees 27 Future attorneys’ fees are to be included when 28 determining the amount in controversy. Fritsch v. 1 Swift Transp. Co. of Arizona, LLC, 899 F.3d 785 (9th 2 Cir. 2018). However, a “district court may reject the 3 defendant’s attempts to include future attorneys’ fees 4 in the amount in controversy if the defendant fails to 5 satisfy this burden of proof.” Id. at 795 . 6 Here, Defendant maintains that “[i]t is likely that 7 Plaintiff will seek more than $75,000 in fees if she 8 prevails at trial” because the “plaintiffs’ attorneys 9 regularly request more than $75,000 in Song Beverly 10 cases tried or prepared for trial.” Opp’n 9:15-28. 11 However, “[c]ourts have been reluctant to estimate 12 reasonably attorneys’ fees without knowing what the 13 attorneys in the case bill, or being provided with 14 ‘evidence of attorneys’ fees awards in similar cases.’” 15 Eberle v. Jaguar Land Rover N. Am., LLC, No. 2:18-CV16 06650-VAP-PLA, 2018 WL 4674598 , at *3 (C.D. Cal. Sept. 17 26, 2018) (citing Edwards, 2016 WL 6583585 at *5). 18 And, courts have found information much more specific 19 than Defendant’s assertion that plaintiffs’ counsels 20 often seek more than $75,000 in attorneys’ fees to be 21 insufficient for the purpose of including attorneys’ 22 fees in the amount in controversy. See Conrad Assocs. 23 v. Hartford Accident & Indem. Co., 994 F. Supp. 1196 , 24 1200 (N.D. Cal. 1998) (finding that a defendant failed 25 to establish the amount in controversy by a 26 preponderance of the evidence when including attorney’s 27 fees without estimating “the amount of time each major 28 task will take,” or varying the hourly billing rate for 1 each task). Accordingly, the Court finds that 2 attorneys’ fees here are too speculative to be included 3 in the amount in controversy calculation. 4 Ultimately, the Court finds that Defendant failed 5 meet its burden to prove by a preponderance of the 6 evidence that the amount in controversy exceeds 7 $75,000. Accordingly, Defendant failed to establish 8 that this Court has subject matter jurisdiction 9 pursuant to diversity under 28 U.S.C. § 1332 . As such, 10 because the Court lacks subject matter jurisdiction 11 over the Action, the Court GRANTS Plaintiff’s Motion. 12 2. Complete Diversity 13 Because Defendant has failed to meet its burden of 14 showing that the amount in controversy exceeds the 15 jurisdictional minimum, the Court need not address 16 whether complete diversity between the parties exists. 17 III. CONCLUSION 18 Based on the foregoing, the Court GRANTS 19 Plaintiff’s Motion to Remand. The Clerk shall REMAND 20 this Action to the Superior Court of California, County 21 of Los Angeles, Case No. 19STCV46285, and close this 22 matter. 23 IT IS SO ORDERED. /s/ Ronald S.W. Lew 24 DATED: June _2_9, 2020 HONORABLE RONALD S.W. LEW 25 Senior U.S. District Judge