Margaret Mahlmeister et al v. FCA US LLC et al

Filing 19

MINUTES (IN CHAMBERS) ORDER GRANTING PLAINTIFFS' MOTION TO REMAND by Judge Andre Birotte Jr.: The Court GRANTS Plaintiffs' Motion to Remand #12 . The Clerk shall REMAND this action to the Superior Court of California, County of Ventura, Case No. 56-02020-00547548-CU-BC-VTA, and take all steps necessary to close this matter. ( MD JS-6. Case Terminated. ) Court Reporter: N/A. (gk)

that “Plaintiffs suffered damages in a sum to be proven at trial in an amount that is
not less than $25,001.00.” (Id. at ⁋ 12.)
Plaintiffs filed their Complaint in Superior Court of the State of California,
County of Ventura on December 7, 2020, alleging violations of the MagnusonMoss Warranty Act, fraud by omission, and negligent repair. (See generally Dkt.
No. 1-3.) Defendant was served with the Complaint on December 22, 2020 and
removed this action to this Court on January 21, 2021, citing federal question
jurisdiction. (Dkt. No. 1 at ⁋ 3.) Plaintiffs filed the instant Motion to Remand on
March 31, 2021. (See Dkt. No. 12.)
II.

LEGAL STANDARD

Civil actions may be removed from state court if the federal court has
original jurisdiction. See Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 33
(2002) (“Under the plain terms of § 1441(a), in order properly to remove an action
pursuant to that provision, . . . original subject-matter jurisdiction must lie in the
federal courts.” (cleaned up)).
Thus, removal of a state action may be based on either diversity
or federal question jurisdiction. City of Chi., 522 U.S. at 163; Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987). Determination of federal question jurisdiction
“is governed by the well-pleaded complaint rule, which provides that federal
jurisdiction exists only when a federal question is presented on the face of
plaintiffs properly pleaded complaint.” Cal. v. United States, 215 F.3d 1005, 1014
(9th Cir. 2000). The defendant seeking removal of an action from state court bears
the burden of establishing grounds for federal jurisdiction, by a preponderance of
the evidence. Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102,
1106-07 (9th Cir. 2010).
“The burden of establishing jurisdiction falls on the party invoking the
removal statute, which is strictly construed against removal.” Sullivan v. First
Affiliated Sec., Inc., 813 F.2d 1368, 1371 (9th Cir. 1987) (internal citations
omitted). Courts resolve all ambiguities “in favor of remand to state court.” Hunter
v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing Gaus v. Miles,
Inc., 980 F.2d 564, 566 (9th Cir. 1992)). A removed case must be remanded “[i]f at
any time before final judgment it appears that the district court lacks subject matter
jurisdiction.” 28 U.S.C. § 1447(c).
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III.

DISCUSSION

Plaintiffs move to remand this action to state court arguing that Defendant
has failed to show by a preponderance of evidence that this case meets the $50,000
amount in controversy as required under the Magnuson-Moss Warranty Act
(“Magnuson-Moss”). (Mot. at 4-13.) Defendant opposes remand and contends that
it has met the requisite showing for damages when considering damages, civil
penalties, and attorneys’ fees and thus the Court has federal-question subject
matter jurisdiction under Magnuson-Moss. (Opp. at 3-8.)
Plaintiffs’ first cause of action for violations of Magnuson-Moss arises under
federal law. 15 U.S.C. § 2310(d). Under § 2310(d)(1)(B), “a consumer who is
damaged by the failure of a supplier, warrantor, or service contractor to comply
with any obligation under this chapter, or under a written warranty, implied
warranty, or service contract, may bring suit for damages and other legal and
equitable relief in an appropriate district court.” However, before subject matter
jurisdiction is invoked, the amount in controversy must be shown to be at least
$50,000, exclusive of costs and interests. 15 U.S.C. § 2310(d)(3)(B).
A.

Actual Damages and Civil Penalties

In the Complaint, Plaintiffs only once state a monetary value of the case:
“Plaintiffs suffered damages in a sum to be proven at trial in an amount that is not
less than $25,001.00.” (Compl. ⁋ 12.) Plaintiffs’ prayer for relief includes actual
damages and “a civil penalty in the amount of two times Plaintiffs’ actual
damages.” (Id. at 8.)
Based on this allegation, Defendant argues that this case meets the amount in
controversy on the face of the Complaint because Plaintiffs have alleged at least
$75,003.00 in damages. To arrive at this number, Defendant presumes that the
$25,001.00 is for actual damages, despite the Complaint only defining this amount
as “damages.” Defendant then calculates civil penalties at a rate two times the
presumed actual damages (2 x $25,001.00) to arrive at the total damages
calculation of $75,003.00 ($25,001.00 + $50,002.00). (Opp. at 7.) Plaintiffs
disagree and assert that the reference to $25,001.00 encompasses “total damages”
which include both actual damages and civil penalties. (Mot. at 7-8.)
The Court finds that the Complaint is ambiguous as to total damages and
returns to Defendant’s burden of proof to establish proper removal. See Provincial

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Govt's of Marinduque, 582 F.3d at 1087 (“The defendant bears the burden of
establishing that removal is proper.”).
Defendant argues that the Court’s approach will encourage and/or reward
Plaintiffs’ ambiguous pleading. (Opp. at 5.) However, the Court is not persuaded
by this argument because there are other options by which Defendant could have—
but did not—satisfied its burden of showing the amount in controversy has been
satisfied.
This Court is persuaded by other courts that have reached the same result.
See, e.g., Steeg v. Ford Motor Co., CV 19-05833-LHK, 2020 WL 2121508 (N.D.
Cal. May 5, 2020) (remanding case where damages are ambiguous and defendant
has failed to clarify by a preponderance of evidence that amount in controversy is
satisfied); Edwards v. Ford Motor Company is on point. No. CV 16-05852 BRO
(PLAx), 2016 WL 6583585 (C.D. Cal. Nov. 4, 2016) (remand is warranted where
neither the complaint nor defendants provide “any facts that would allow the Court
to determine the amount of actual damages”). Lastly, the Ninth Circuit requires
this Court to resolve “any doubt about the right of removal . . . in favor of
remand.” Moore-Thomas, 553 F.3d at 1244.
B.

Attorneys’ Fees

Next, because Defendant has only established damages of $25,001.00, it
must be able to demonstrate by a preponderance of the evidence that at least an
additional $25,000 will be recovered in this case. Defendant’s only argument as to
attorneys’ fees is that “attorneys’ fees alone are more likely than not to exceed
$35,000” and likely will “exceed $100,000.” (Declaration of Scott Shepardson at
⁋⁋ 8-9.)
Defendant must still meet its burden of showing removal is proper where the
law entitles “plaintiff to future attorneys’ fees if the action succeeds, . . . the
defendant may attempt to prove that future attorneys’ fees should be included in
the amount in controversy.” Fritsch v. Swift Transportation Co. of Arizona, LLC,
899 F.3d 785, 794 (9th Cir. 2018). “The defendant retains the burden, however, of
proving the amount of future attorneys’ fees by a preponderance of the
evidence.” Id. at 788.
The Court finds that Defendant fails to demonstrate by a preponderance of
the evidence that the attorney’s fees in this case will be at least $25,000. Indeed,
Defendant submits a declaration that states conclusorily that damages are likely
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more than $35,000 and potentially even more than $100,000. At no point does
Defendant explain how this amount is determined, what factors about this specific
case make these calculations more likely than not, or how other similar cases have
resulted in fees that satisfy the amount in controversy.
Defendant fails to substantiate its assertions, and the Court may not merely
accept Defendant’s position that “it is not uncommon, and in fact quite regular, for
attorney’s fees and cost awards . . . to exceed $100,000” in the absence of any
specific evidence. (Shepardson Decl. at ⁋ 8.)
C.

Total Damages

In sum, the Court finds that Defendant has only established by a
preponderance of the evidence that the amount in controversy exceeds $25,001.00.
This does not exceed the $50,000 amount in controversy requirement under
Magnuson-Moss for federal question jurisdiction. Thus, Defendant has failed to
meet its burden of showing that the Court has jurisdiction over this case.
D.

Leave to Conduct Jurisdictional Discovery

The Court declines to afford Defendant leave to conduct jurisdictional
discovery as Defendant has neither provided any binding authority to support its
position nor has it specified what evidence it seeks to discover and whether this
evidence (i.e., purchase price of the Vehicle) was already known to Defendant.
IV.

CONCLUSION

For the reasons discussed above, the Court GRANTS Plaintiffs’ Motion to
Remand. The Clerk shall REMAND this action to the Superior Court of
California, County of Ventura and take all steps necessary to close this matter.
IT IS SO ORDERED.

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