Natalie Schultz v. BMW of North America, LLC

Filing 16

MINUTES (In Chambers): ORDER REMANDING ACTION TO STATE COURT by Judge Michael W. Fitzgerald: the Court REMANDS the action to the Superior Court of the State of California for the County of Los Angeles. The Court ORDERS the Clerk to treat this Order, and its entry on the docket, as an entry of judgment. Local Rule 58-6. (Made JS-6 Case Terminated.) (jp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES—GENERAL
Case No. CV-17-7666-MWF (AFMx)
Date: January 8, 2018
Title:
Natalie Schultz v. BMW of North America, LLC
Present: The Honorable MICHAEL W. FITZGERALD, U.S. District Judge
Relief Deputy Clerk:
Cheryl Wynn

Court Reporter:
Not Reported

Attorneys Present for Plaintiff:
None Present

Attorneys Present for Defendant:
None Present

Proceedings (In Chambers):

ORDER REMANDING ACTION TO
STATE COURT

On September 19, 2017, Plaintiff filed a Complaint against Defendant for breach
of express and implied warranties under the Song-Beverly Consumer Warranty Act in
Los Angeles County Superior Court. On October 19, 2017, Defendant removed the
case, invoking this Court’s diversity jurisdiction. In its Notice of Removal, Defendant
asserted that the $75,000 amount in controversy requirement is satisfied because: (1)
Plaintiff may effectively recover up to three times the lease price under the SongBeverly Act (i.e., a total of $46,464.90); (2) the Song-Beverly Act provides that a
successful Plaintiff is entitled to recover her reasonable attorneys’ fees; and (3) in
defense counsel’s experience, Song-Beverly plaintiffs regularly incur in excess of
$30,000 in attorneys’ fees.
This Court has a sua sponte obligation to confirm that it has subject matter
jurisdiction. Nevada v. Bank of Am. Corp., 672 F.3d 661, 673 (9th Cir. 2012) (“[I]t is
well established that ‘a court may raise the question of subject matter jurisdiction, sua
sponte, at any time during the pendency of the action . . . .’” (quoting Snell v.
Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002))).
On December 1, 2017, the Court issued a docket order indicating that it was
skeptical that Plaintiff’s potential future attorneys’ fees should be included in the
amount in controversy and directing the parties to be prepared to address the issue at
the December 11 scheduling conference. During the December 11 scheduling
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CIVIL MINUTES—GENERAL
1

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV-17-7666-MWF (AFMx)
Date: January 8, 2018
Title:
Natalie Schultz v. BMW of North America, LLC
conference, Defendant’s counsel held to its position that future attorneys’ fees should
be included. During that scheduling conference, the Court directed counsel to file
briefs in support of their respective positions. Defendant filed its brief on December
20, 2017; Plaintiff filed her response on January 5, 2018.
The Court has reviewed the submissions and concludes that this action should be
remanded. Defendant now, for the first time, submits that the “residual value / lease
payoff” amount of $19,337 should be included in the amount in controversy because
Defendant may incur this expense if Plaintiff is successful in this lawsuit and
Defendant must “buy back” Plaintiff’s vehicle, even though it “is not and cannot be
claimed by the plaintiff as a portion of her actual damages.” Ancillary expenses that
Defendant may incur in connection with this lawsuit but that Plaintiff is not attempting
to recover and cannot possibly recover are not “in controversy.” As Plaintiff aptly
points out, such a definition would permit state court defendants to remove cases based
upon the attorneys’ fees they themselves might incur in the litigation.
And for the reasons stated in the Court’s December 1 order, it will not consider
Plaintiff’s potential future attorneys’ fees as a component of the amount in controversy.
There is no controlling Ninth Circuit authority on the issue, but other district courts
have reached similar conclusions. See, e.g., MIC Philberts Investments v. American
Cas. Co. of Reading, Pa., 2012 WL 2118239, at *5 (E.D. Cal. June 11, 2012) (“While
the Ninth Circuit Court of Appeals has not yet spoken on the issue, the Court notes that
it appears that a nascent consensus may be emerging among the district courts of this
Circuit, finding that attorneys’ fees not yet incurred may not be included in the amount
in controversy calculation.”); Reames v. AB Car Rental Services, Inc., 899 F. Supp. 2d
1012, 1020 (D. Or. 2012) (“It appears that a nascent consensus may be emerging
among the district courts of the Ninth Circuit that the split between the [Tenth Circuit]
and [Seventh Circuit] lines of cases may best be resolved by adoption of the [Seventh
Circuit] reasoning that attorney fees anticipated but unaccrued at the time of removal
are not properly in controversy for jurisdictional purposes.”); Dukes v. Twin City Fire
Ins. Co., 2010 WL 94109, at *2 (D. Ariz. Jan. 6, 2010) (“Future attorneys’ fees are
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV-17-7666-MWF (AFMx)
Date: January 8, 2018
Title:
Natalie Schultz v. BMW of North America, LLC
entirely speculative, may be avoided, and are therefore not “in controversy” at the time
of removal.”).
In sum, this Court does not have diversity jurisdiction over this routine state
lemon law action because the amount in controversy does not exceed $75,000.
Accordingly, the Court REMANDS the action to the Superior Court of the State
of California for the County of Los Angeles. The Court ORDERS the Clerk to treat
this Order, and its entry on the docket, as an entry of judgment. Local Rule 58-6.
IT IS SO ORDERED.

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CIVIL MINUTES—GENERAL
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