Robert Reed v. Thor Industries, Inc. et al

Filing 34

MINUTES (IN CHAMBERS) ORDER GRANTING MOTION TO REMAND by Judge Andre Birotte Jr.: The Court GRANTS Plaintiff's Motion 16 . The Court declines to rule on Defendants' Motion to Dismiss 25 . The Clerk of Court is ORDERED to remand this case to Los Angeles Superior Court, Case No. 24STCV08210. ( MD JS-6. Case Terminated ) Court Reporter: N/A. (gk)

On May 13, 2024, Defendants removed the case to this court on the basis of
diversity jurisdiction, pursuant to 28 U.S.C. §§ 1332, 1441(B), and 1446. Notice of
Removal (“NOR,” Dkt. No. 1). Plaintiff now moves to remand the case, arguing
that Defendants have not established either complete diversity or the amount in
controversy.
II.

LEGAL STANDARD

Federal courts are courts of limited jurisdiction and thus have subject matter
jurisdiction only over matters authorized by the Constitution and Congress. See
Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986). “Because of
the Congressional purpose to restrict the jurisdiction of the federal courts on
removal,” statutes conferring jurisdiction are “strictly construed and federal
jurisdiction must be rejected if there is any doubt as to the right of removal in the
first instance.” Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996) (citations
and quotations omitted).
A defendant may remove a civil action filed in state court to federal district
court when the federal court has original jurisdiction over the action. 28 U.S.C. §
1441(a). “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); see also Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). “The
‘strong presumption’ against removal jurisdiction means that the defendant always
has the burden of establishing that removal is proper.” Gaus v. Miles, Inc., 980
F.2d 564, 566 (9th Cir. 1992). If any doubt exists as to the right of removal, federal
jurisdiction must be rejected. Id. at 566–67; see also Hunter v. Philip Morris USA,
582 F.3d 1039, 1042 (9th Cir. 2009) (citing Id. at 566) (“[T]he court resolves all
ambiguity in favor of remand to state court.”).
For an action based on diversity of citizenship, as here, the parties must be
citizens of different states and the dispute must involve an amount in controversy
over $75,000.00. 28 U.S.C. § 1332(a)(1). While “‘a defendant’s notice of removal
need include only a plausible allegation that the amount in controversy exceeds the
jurisdictional threshold,’ . . . ‘[e]vidence establishing the amount is required’”
when “defendant’s assertion of the amount in controversy is contested by
plaintiffs.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015)
(quoting Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554
(2014)). The defendant must establish the amount in controversy by a
preponderance of the evidence. See Dart, 135 S. Ct. at 553–54.
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III.

DISCUSSION
A. Plaintiff Has Not Waived Right to Seek Remand

Defendants argue that Plaintiff has waived the right to seek remand by filing
an amended complaint in this court, which they contend constitutes consent to this
court’s jurisdiction. Opp’n at 3–4. “To waive the right to challenge procedural
removal defects and/or consent to a federal court’s assumption of removal
jurisdiction, the plaintiff must have engaged in ‘affirmative conduct’ or indicated
‘unequivocal assent’ to federal jurisdiction, such that it would be ‘offensive to
fundamental principles of fairness to remand.’” Hunsicker v. Home Depot U.S.A.,
Inc., No. CV 20-6382 PSG (EX), 2020 WL 6158243, at *3 (C.D. Cal. Oct. 21,
2020) (citing Transport Indem. Co. v. Fin. Tr. Co., 339 F. Supp. 405, 408 (C.D.
Cal. 1972)).
As Defendants point out, Plaintiff’s filing of an amended complaint may
constitute affirmative conduct or unequivocal assent to federal jurisdiction. See id.;
Alarcon v. Shim Inc., No C 07-02894 SI, 2007 WL 2701930, at *2 (N.D. Cal. Sept.
13, 2007) (“Courts have found plaintiffs waived their right to challenge procedural
defects in removal where plaintiffs filed an amended complaint ....”). “However,
the Court finds that, despite Plaintiff’s filing of the amended complaint, it is not
‘offensive to fundamental principles of fairness to remand’ this case.” Hunsicker,
2020 WL 6158243, at *4 (citing Transport Indem. Co., 339 F. Supp. at 408).
Plaintiff filed a motion to remand and an amended complaint on the same
day—June 3, 2024. (Dkt. Nos. 16-17.) “As such, Plaintiff did not engage in
extensive post-removal conduct or seek to remand after unsuccessfully litigating
issues in federal court.” Hunsicker, 2020 WL 6158243, at *4; see also Transport
Indem. Co., 339 F. Supp. at 408 (noting the unfairness of remand where a party
unsuccessfully litigates a “substantial issue” in federal court, “such as the right to a
jury trial or the right to take depositions”) (cleaned up); Alarcon, 2007 WL
2701930, at *2 (explaining that courts have found waiver where the plaintiff “made
multiple appearances in federal court[ ] or participated in discovery”).
Accordingly, Plaintiff did not engage in affirmative conduct or unequivocally
assent to federal jurisdiction such that it would be “offensive to fundamental
principles of fairness to remand” this case. See Transport Indem. Co., 339 F. Supp.
at 408.

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B. Complete Diversity Is Satisfied
The Notice of Removal alleges that complete diversity exists because the
parties are citizens of different states. See NOR ¶¶ 13–15. Defendants allege that
Plaintiff is a “citizen of California residing in Orange County, California” based on
“residential information provided in a Confidential Settlement Agreement and
Release between Plaintiff and Cummins, executed by Plaintiff on March 9, 2023.”
Id. ¶ 14. Plaintiff argues that Defendants’ allegation based on “mere residence” is
insufficient to establish Plaintiff’s citizenship. See Mot. at 9–10.
“Although the citizenship of a natural person is ‘determined by her state of
domicile, not her state of residence,’ ‘it is presumed that a natural person’s
residence is also his domicile, and a party resisting this presumption bears the
burden of producing contrary evidence.’ ” Allen v. Lowes Companies, Inc., 2:23cv-01336-AB-AFM, 2023 WL 5321154, at 2 (C.D. Cal. Aug. 18, 2023) (internal
citations omitted). Here, the Complaint does not contain any allegations to
ascertain Plaintiff’s citizenship, and it is undisputed that Defendants are not
citizens of California. While Plaintiff claims that Defendants have not established
that Plaintiff is a citizen of California, Plaintiff does not refute Defendants’ claim
that he is citizen of California based on the address he provided in the Agreement
and Release between the parties, nor does Plaintiff present any evidence showing
that he is not domiciled in California or that he is a citizen of another state. See
Aminiasl v. Volkswagen Grp. of Am.., Inc., No. CV231186MWFAFMX, 2023 WL
3005003, at *3 (C.D. Cal. Apr. 19, 2023). Therefore, the Court finds that
Defendants have made a sufficient showing that Plaintiff is a citizen of California,
and that complete diversity exists. See NOR ¶ 15.
C. Defendants Have Failed to Establish the Amount in Controversy
The amount in controversy is not clear from the face of the Complaint. See
generally Compl. Plaintiff seeks actual and consequential damages, a two-times
civil penalty, and attorneys’ fees and costs. While Plaintiff’s Complaint alleges that
the amount in controversy exceeds $35,000, nothing in the Complaint indicates
whether the total amount Plaintiff seeks exceeds $75,000. See Compl. ¶ 14.
Therefore, Defendants must show by a preponderance of the evidence that the
amount in controversy exceeds $75,000.

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i. Actual Damages
Under the Song-Beverly Act, a plaintiff’s actual damages are “equal to the
actual price paid or payable by the buyer,” reduced by an amount “directly
attributable to use by the buyer prior to the time the buyer first delivered the
vehicle to the manufacturer or distributor, or its authorized service and repair
facility for correction of the problem that gave rise to the nonconformity.” Cal.
Civ. Code § 1793.2(d)(2)(B)–(C).” This reduction, also known as a mileage offset,
is calculated by dividing the number of miles driven prior to first delivery for
correction by 120,0000. See id. § 1793.2(d)(2)(C).
Defendants allege that the “MSRP or ‘list price’ of a new 2021 Tiffin
Allegro Bus is approximately $490,000.” NOR ¶ 23. Defendants contend that
“[s]ince the MSRP or ‘list price’ of the [motorhome] … exceeds the jurisdictional
amount, and since Plaintiff’s alleged damages against Defendants include not only
a full refund or replacement of the [motorhome], but also civil penalties up to two
times Plaintiff’s actual damages, statutory damages, and attorneys’ fees, it is “more
likely than not” that the amount at issue exceeds the $75,000 amount in
controversy requirement for the purpose of diversity.” See id. ¶ 24. However,
Defendants’ Notice of Removal does not allege the actual price paid by Plaintiff.
See generally NOR. “[M]erely providing the retail price of the vehicle at issue
without providing information on the actual sales price leaves ‘considerable doubt
as to the amount in controversy.’” Steeg v. Ford Motor Co., No. 19-CV-05833LHK, 2020 WL 2121508, at *4 (N.D. Cal. May 5, 2020); see also Chajon v. Ford
Motor Company, No. 218CV10533RGKRAOX, 2019 WL 994019, at *1-2 (C.D.
Cal. Jan. 8, 2019) (remanding action where Defendants offered only MSRP).
Defendants do not offer “any facts that would allow the Court to determine the
amount of actual damages Plaintiff seeks to recover.” Edwards v. Ford Motor Co.,
No. CV1605852BROPLAX, 2016 WL 6583585, at *4 (C.D. Cal. Nov. 4, 2016).
Defendants did not submit the Sales Contract nor provide any evidence showing
the price of the motorhome or establishing the amount Plaintiff actually paid for
the motorhome. Without more, the MSRP or “list price” alleged is insufficient to
support removal. Therefore, the Court finds that Defendants have failed to
establish the likelihood that Plaintiff may recover any amount of actual damages
by a preponderance of the evidence. See id.
Additionally, Defendants point to Plaintiff’s opposition to their pending
Motion to Dismiss, wherein Plaintiff states that he bought the motorhome in
January 2021 “for over $467,000.” (Dkt. No. 28 at 5.) However, the Court cannot
consider post-removal pleadings when assessing removability. See Williams v.
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Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006) (The Ninth Circuit has
“long held that post-removal amendments to the pleadings cannot affect whether a
case is removable, because the propriety of removal is determined solely on the
basis of the pleadings filed in state court.”) (emphasis added). Moreover, even if
the Court did consider this statement, it is still unclear what Plaintiff actually paid
for the motorhome when he purchased it.
ii. Civil Penalty
A plaintiff may be entitled to a civil penalty no greater than twice the
amount of actual damages if a defendant’s violations were willful. Cal. Civ. Code
§ 1794(c). “If the amount of actual damages is speculative, however, an attempt to
determine the civil penalty is equally uncertain.” Chavez v. FCA US LLC, No. CV
19-06003-ODW-GJSX, 2020 WL 468909, at *2 (C.D. Cal. Jan. 27, 2020). Because
Defendants have failed to establish actual damages, the Court is unable to
determine the total civil penalty that might be imposed. See id.; Mullin v. FCA US,
LLC, No. CV 20-2061-RSWL-PJW, 2020 WL 2509081, at *3 (C.D. Cal. May 14,
2020); Edwards, 2016 WL 6583585, at *4.
iii. Attorneys’ Fees
The Notice of Removal merely states that it is “more likely than not” that
attorneys’ fees will help reach the amount in controversy. See NOR ¶ 24.
Defendants argue that “Plaintiff’s request for attorneys’ fees further increases the
amount in controversy” and that “[t]he relevant measure of attorneys’ fees is for
the entire foreseeable course of litigation.” See Opp’n at 7–8. But Defendants
provide no estimate of the attorneys’ fees that have or will accrue in this case.
Defendants fail to offer any evidence demonstrating that the attorneys’ fees in this
case are more likely than not to bring the amount in controversy above the
jurisdictional threshold. Accordingly, the Court rejects Defendants’ attempt to
include attorneys’ fees in the amount in controversy. See Fritsch v. Swift
Transportation Co. of Arizona, LLC, 899 F.3d 785, 795 (9th Cir. 2018).
In sum, the Court is not persuaded that Defendants have met their burden to
establish that the amount in controversy exceeds $75,000.
D. Comity
Lastly, Plaintiff argues that “comity principles” weigh heavily in favor of
remand because state court is “the more appropriate venue” for Plaintiff’s state law
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claims and Plaintiff’s express and implied warranty claims under the Song-Beverly
Act “require[] consideration of numerous state-specific issues on sensitive,
uniquely state-law issues of regulation and statutory interpretation.” Mot. at 5–6.
Plaintiff claims that “[e]xercising federal jurisdiction over this case could easily
interfere with California’s authority over its own statues[sic], regulatory programs,
and public policy.” Mot. at 7. However, “where the district court is presented with
a case within its original jurisdiction, it has a ‘virtually unflagging obligation’ to
exercise the jurisdiction conferred upon it by the coordinate branches of
government and duly invoked by litigants.” Williams v. Costco Wholesale Corp.,
471 F.3d 975, 977 (9th Cir. 2006) (cleaned up). Plaintiff cites no authority
extending comity considerations to the exercise of diversity jurisdiction, and other
courts have rejected Plaintiff’s argument. See, e.g., Brooks v. Ford Motor Co., CV
20-302 DSF (KKx), 2020 WL 2731830, at *5 (C.D. Cal. May 26, 2020)
(“Plaintiff’s argument that state law claims are necessarily more appropriately
heard in state court . . . would eviscerate diversity jurisdiction, which necessarily
presumes only state law claims are at issue . . . Song-Beverly claims have been
extensively litigated in state and federal courts and federal courts are equally
capable of applying state law.”). The Court similarly finds Plaintiff’s argument
unpersuasive.
IV.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff’s Motion. The
Court declines to rule on Defendants’ Motion to Dismiss (Dkt. No. 25).
The Clerk of Court is ORDERED to remand this case to the state court from
which it was removed.
IT IS SO ORDERED.

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