Mo Rahman v. FCA US LLC et al

Filing 29

MINUTES (IN CHAMBERS) ORDER DENYING PLAINTIFF'S MOTION TO REMAND #20 by Judge Stanley Blumenfeld, Jr. See document for details. Court Reporter: N/A. (gk)

experienced numerous electrical and mechanical problems that impaired the use,
value, and safety of the Vehicle. (Id. ¶¶ 11, 16-23.) Plaintiff has presented the
Vehicle for service on several occasions, but Defendant has been unable to service
or repair the Vehicle to conform with the applicable express and implied
warranties. (Id. ¶¶ 25, 31, 39, 45.) On these facts, Plaintiff’s SAC brings five
claims for relief for breach of the implied warranty of merchantability and breach
of express warranty under the Song-Beverley Consumer Warranty Act, Cal. Civ.
Code § 1790 et seq. (Song-Beverly).
II.

LEGAL STANDARD

A defendant may remove a civil action from state to federal court so long as
jurisdiction originally would lie in federal court. 28 U.S.C. § 1441(a). If removal
is based on diversity jurisdiction, id. § 1441(b), the removing defendant must prove
complete diversity of citizenship among the parties and that the amount in
controversy exceeds $75,000. 28 U.S.C. § 1332. The removing party bears the
burden of proof. Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006)
(noting the “near-canonical rule that the burden on removal rests with the
removing defendant”). In attempting to discharge this burden, the removing party
must remember that there is a “‘strong presumption’ against removal jurisdiction.”
Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992) (relying on this “strong
presumption” in evaluating the dearth of evidence adduced by the removing party)
(internal quotation omitted). Indeed, “[f]ederal jurisdiction must be rejected if
there is any doubt as to the right of removal in the first instance.” Id. at 566.
When assessing a dispute over the amount in controversy, courts look to
whether the removing defendant has established by a preponderance of the
evidence that the amount in controversy exceeds $75,000. Dart Cherokee Basin
Operating Co., LLC v. Owens, 574 U.S. 81, 88 (2014); see also Matheson v.
Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (“Where it is
not facially evident from the complaint that more than $75,000 is in controversy,
the removing party must prove, by a preponderance of the evidence, that the
amount in controversy meets the jurisdictional threshold.”). “A defendant’s notice
of removal need include only a plausible allegation that the amount in controversy
exceeds the jurisdictional threshold. Evidence establishing the amount is required
by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the
defendant’s allegation.” Owens, 574 U.S. at 89.

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III.

DISCUSSION

Plaintiff does not assert that the amount in controversy is less than $75,000
as a matter of fact. On the contrary, he expressly refuses to make any such factual
statement, noting at the outset that he “is not taking any position here on the total
amount of damages recoverable in this case,” and that his motion “is based on
Defendant’s failure to meet its burden of proof for invoking this Court’s
jurisdiction.” (Mot. at 1 n.1.) In his motion, Plaintiff offers several arguments
why Defendant purportedly has not met its burden. The Court addresses each in
turn.
A.

Plaintiff’s Damages

In his SAC, Plaintiff alleges that his damages are “not less than $25,001.00.”
(SAC ¶ 12.) Plaintiff asserts that his damages are too vague to allow Defendant to
extrapolate the amount in controversy without speculating. (Mot. at 5-10.) First,
Plaintiff contends that his use of the word “damages” is meant to be all-inclusive.
Stated differently, his “damages” include: actual damages, civil penalties,
attorney’s fees, and punitive damages. (Id. at 6.) To support this assertion,
Plaintiff cites cases such as Schneider v. Ford Motor Co., 441 F. Supp. 3d 909, 913
(N.D. Cal. 2020) (drawing inference that “damages” of $25,001 were total
damages). This creative argument is unpersuasive. As the Ninth Circuit has held:
It is beyond peradventure that damages are distinct from penalties.
The term “damages” refers to the loss suffered by an injured party
expressed in a dollar amount. Unlike damages, penalties are not
designed to compensate an injured party, but are designed to deter
conduct deemed undesirable by the legislature.
Washington Cnty. Unified Sewerage Agency v. First State Ins. Co., 81 F.3d 171
(9th Cir. 1996) (quoting Travelers Ins. Co. v. Waltham Indus. Lab., 722 F.Supp.
814, 827-28 (D. Mass. 1988), aff’d in part, rev’d in part on other grounds, 833
F.2d 1092, 1099 (1st Cir. 1989) (internal citation omitted)). There is no reason to
conclude that California courts would find differently. See Kirzhner v. MercedesBenz USA, LLC, 9 Cal. 5th 966, 984 (2020) (“The [Song-Beverly] Act does not
indicate that a buyer may recover only civil penalties—and not damages”). In any
event, even if Plaintiff intended to use damages more broadly, his complaint sets
forth a minimum rather than a maximum amount of claimed damages—an amount
clearly intended to simply invoke the unlimited jurisdiction of the state trial court.
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See Cal. Civ. Code Proc. §§ 85, 88 (defining unlimited jurisdiction to include
actions in which the amount in controversy exceeds $25,000).
Next, Plaintiff argues that Defendant’s actual damages calculation of
$25,636.95 is “completely speculat[ive].” (Mot. at 7.) Plaintiff cites several cases
to suggest that information such as purchase price, finance details, and miles
driven is necessary to establish damages. (Id. at 8 (collecting cases).) But
Defendant has produced such information here. To start, Plaintiff’s SAC provides
the purchase price of the Vehicle: $30,657.60. (SAC ¶ 9.) Defendant further
shows its math in the Notice of Removal and supporting documents: Plaintiff
financed $25,636.95 at an annual interest rate of 5.99%, equaling a monthly
payment of $425.00 over 72 months. (See Decl. of Eric D. Sentlinger ¶¶ 15-25,
Ex. I, Dkt. Nos. 1-1, 1-10.) These figures leave no guesswork to be done. See
Coronel v. Ford Motor Co., No. CV 19-09841 DSF (JEM), 2020 WL 550690, at
*6 (C.D. Cal. Feb. 4, 2020) (citation omitted).
B.

Civil Penalties

Civil penalties under Song-Beverly are properly included in the amount in
controversy. See Brady v. Mercedes-Benz USA, Inc., 243 F. Supp. 2d 1004, 1009
(N.D. Cal. 2002) (citing Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042,
1046 (9th Cir. 2000)). Plaintiff argues that although Song-Beverly permits up to a
two-time civil penalty, Defendant has offered no evidence that he is entitled to the
maximum penalty “or, indeed, any penalties at all.” (Mot. at 10 (emphasis
omitted).) This argument is contradicted by the allegations in the SAC that
Defendant’s conduct was willful. Moreover, Defendant is not required to prove
the case against itself. As another court in this district recently held:
It would be absurd to suggest a defendant must offer evidence
showing it willfully failed to comply with the Song-Beverly Act,
given that most defendants, including Defendant here, will “den[y]
that it willfully failed to comply with the Song-Beverly.”
Brooks v. Ford Motor Co., No. CV 20-302 DSF (KKx), 2020 WL 2731830, at *2
(C.D. Cal. May 26, 2020). Indeed, as in Brooks, Plaintiff here alleges that
Defendant willfully and intentionally failed to comply with Song-Beverly. (SAC
¶¶ 27, 34, 37, 41.) Accordingly, “[t]he Court will consider civil penalties.”
Brooks, 2020 WL 2731830 at *2.

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C.

Mileage Offset

Plaintiff argues that Defendant’s failure to mention the “mileage offset”
under Cal. Civ. Code § 1793.2(d)(2)(C) makes the amount in controversy
inherently speculative. (Mot. at 8-10.) However, Defendant is not required to
definitively prove the entitlement to an offset to remove the case; rather, it is only
required to prove by a preponderance of the evidence that the amount in
controversy exceeds $75,000. Owens, 574 U.S. at 89. “[T]he amount in
controversy reflects the maximum recovery the plaintiff could reasonably recover,”
not the amount a plaintiff is likely to recover. Arias v. Residence Inn by Marriott,
936 F.3d 920, 927 (9th Cir. 2018) (emphasis in original). Even if Plaintiff was
entitled to an offset, it would require an unlikely inference that the amount in
controversy would not be met, particularly in light of the attorneys’ fees that
Plaintiff would be awarded should he prevail on his Song-Beverly claims.
D.

Attorneys’ Fees

“[A] court must include future attorneys’ fees recoverable by statute or
contract when assessing whether the amount-in-controversy requirement is met.”
Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 794 (9th Cir.
2018). The Court may rely on its “expertise in evaluating litigation expenses” to
determine if a defendant has satisfied its burden “to prove future attorneys’ fees by
a preponderance of the evidence.” Id. at 796.
Plaintiff does not contend that attorneys’ fees are not available under SongBeverly, but instead contends that the Court should not consider attorneys’ fees in
this case because the amount is simply too speculative. (Mot. at 12-14.) Not so.
Defendant submits a declaration that includes a fee request of more than $40,000
in a similar case involving Plaintiff’s counsel. (See Decl. of Eric D. Sentlinger ¶ 3,
Ex. A, Dkt. No. 26-1.) Attorneys from Plaintiff’s counsel’s firm charge hourly
rates between $430 and $525 per hour. (Id.) While Plaintiff contends the
Defendant merely speculates about the litigation strategy in this case, the
likelihood of a substantial fee request is not speculative given the very active
litigation in this action before (and now after) removal. (See generally Decl. of
Eric D. Sentlinger, Exs. J-VV, Dkt. Nos. 1-11–1-49.) Defendant has met its
burden to show that inclusive of attorneys’ fees the amount in controversy more
likely than not exceeds $75,000.

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IV.

CONCLUSION

For the foregoing reasons, Defendant has met its burden to show that the
amount in controversy in this action exceeds $75,000. The motion is DENIED.

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