Steen et al v. Mercedes-Benz USA, LLC

Filing 11

ORDER re 6 MOTION to Remand filed by David Lowry, Matthew Steen Signed by Chief District Judge Louis Guirola, Jr on 07/27/2017 (Guirola, Louis)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
MATTHEW STEEN AND DAVID LOWRY

v.

PLAINTIFFS

CAUSE NO. 1:17-cv–158-LG-RHW

MERCEDES-BENZ USA, LLC

DEFENDANT

ORDER FOR REMAND-RELATED DISCOVERY
BEFORE THE COURT is the Motion to Remand [6] filed by the plaintiffs
Matthew Steen and David Lowry. The Motion has been fully briefed. After reviewing
the submissions of the parties, the record in this matter, and the applicable law, the
Court will order limited discovery related to the jurisdictional amount at the time of
removal for each of Plaintiffs’ claims.
BACKGROUND
On March 21, 2017, Plaintiffs filed this lawsuit in the Circuit Court of the
Second Judicial District of Harrison County, Mississippi, alleging that they leased a
defective 2017 Mercedes Benz GLS450 (“GLS450”), manufactured by Defendant
Mercedes-Benz USA. Mercedes-Benz of South MS (“Seller”), an authorized dealer for
Mercedes, arranged for Plaintiffs to lease the vehicle from Daimler Trust C/O
(“Lessor”). Plaintiffs will have paid $53,431 at the conclusion of the lease.
Lessor purchased the GLS450 from Mercedes for $86,428.56. Mercedes provided
warranties to Lessor including a four year or fifty thousand mile bumper to bumper
coverage warranty. On December 29, 2016, Lessor assigned its rights in Mercedes’

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written warranties to Plaintiffs. Plaintiffs allege that after they took possession of the
GLS450 they experienced defects with the engine and electrical system. As a result of
these defects, the GLS450 would not start, and the check engine light would illuminate.
Plaintiffs allege that Mercedes failed to repair the GLS450 after multiple attempts,
thus causing Mercedes’ warranties to fail. Plaintiffs further allege that they have been
and will continue to be financially damaged due to Mercedes’ failure to comply with the
warranties.
Plaintiffs assert the following claims against Mercedes: breach of written
warranty pursuant to the Federal Magnuson-Moss Warranty Act, breach of implied
warranty pursuant to that Act, and a state law claim for violation of the Mississippi
Vehicle Warranty Enforcement Act. On May 25, 2017, Mercedes removed the case to
this Court, asserting that this Court has federal question jurisdiction and diversity
jurisdiction over Plaintiffs’ claims. Plaintiffs filed this Motion to Remand. Plaintiffs do
not dispute that diversity of citizenship exists, but argue that the amount in
controversy is not satisfied for diversity jurisdiction or federal question jurisdiction
based on caselaw from other jurisdictions concerning Magnuson-Moss Warranty Act
claims.
DISCUSSION
The party invoking federal jurisdiction bears the burden of establishing the
amount in controversy by a preponderance of the evidence. Hartford Ins. Grp. v. LouCon, Inc., 293 F.3d 908, 910 (5th Cir. 2002) (citing St. Paul Reins. Co., Ltd. v.
Greenberg, 134 F.3d 1250, 1252 (5th Cir. 1998)). There are two ways in which the

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defendant can satisfy this burden. First, the defendant may show that it is facially
apparent from the complaint that the plaintiff’s claims are likely to exceed the
jurisdictional amount. Garcia v. Koch Oil Co. of Tex., 351 F.3d 636, 639 (5th Cir. 2003).
If the amount in controversy is not facially apparent, the defendant “may support
federal jurisdiction by setting forth the facts – [either] in the removal petition [or] by
affidavit – that support a finding of the requisite amount.” Id. (quoting Allen v. R&H
Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). In the remand context, “[d]iscovery
by the parties should not be allowed except on a tight judicial tether, sharply tailored to
the question at hand, and only after a showing of its necessity.” Smallwood v. Ill. Cent.
R.R. Co., 385 F.3d 568, 574 (5th Cir. 2004). The jurisdictional facts supporting removal
must be judged at the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880,
883 (5th Cir. 2000).
Magnusson-Moss Claims
The Magnuson-Moss Warranty Act confers federal question jurisdiction over
breach of warranty claims where the amount in controversy exceeds $50,000, exclusive
of interest and costs. 15 U.S.C. § 2310(d)(3); see also Scarlott v. Nissan N. Am., Inc., 771
F.3d 883, 887 (5th Cir. 2014). “Generally, courts look to state law to determine the
applicable measure of damages, which informs the amount in controversy under the
[Act].” Scarlott, 771 F.3d at 888. However, attorney’s fees cannot be included to
establish the amount in controversy for claims asserted under the Act. Id. Under
Mississippi law, “[t]he measure of damages for breach of warranty is the difference at
the time and place of acceptance between the value of the goods accepted and the value

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they would have had if they had been as warranted, unless special circumstances show
proximate damages of a different amount.” Miss. Code Ann. § 75-2-714(2); see also
MacKenzie v. Chrysler Corp., 607 F.2d 1162, 1166 (5th Cir. 1979). A buyer can also
recover consequential or incidental damages for breach of warranty under Mississippi
law. Miss. Code Ann. § 75-2-715(1).
Pursuant to state court discovery rules, Mercedes sent requests for admissions
to Plaintiffs asking Plaintiffs to admit that they would never seek damages in excess of
$50,000, exclusive of interests and costs, but Plaintiffs denied all such requests. (State
Ct. Resp. to Def.’s First Set of Req. for Admis. 2, ECF No. 1-1). Nevertheless, in their
Motion to Remand, Plaintiffs claim that they will not be able to recover more than
$50,000 under the Magnuson-Moss Warranty Act. Plaintiffs rely on cases from the
Third, Sixth, and Seventh Circuits in which a cost of cover formula was adopted to
determine the amount in controversy for Magnuson-Moss Warranty Act claims. See
generally Golden v. Gorno Bros., Inc., 410 F.3d 879 (6th Cir. 2005); Samuel-Bassett v.
Kia Motors Am., Inc., 357 F.3d 352 (3d Cir. 2003); Gardynski-Leschunk v. Ford Motor
Co., 142 F.3d 955 (7th Cir. 1998).
However, in those cases, the courts had information such as the cost of a
replacement vehicle and the present value of the vehicle available to assist them in
making the necessary calculations of damages under the Magnuson-Moss Warranty
Act. See, e.g., Golden, 410 F.3d at 885. In the present case, Plaintiffs are asking the
Court to calculate their damages even though the only information provided to the
Court is the purchase price of the vehicle and vague citations to the Kelley Blue Book.

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Moreover, these calculations should have been performed by Plaintiffs prior to filing
their Complaint to prevent confusion as to the amount in controversy in this lawsuit.
Therefore, it is unclear at this time as to what the amount in controversy is for the
Magnusson-Moss claims.
State Law Claim
28 U.S.C. § 1332 confers federal diversity jurisdiction over civil actions where
the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, and the civil action is between citizens of different states. The Magnusson-Moss
Warranty Act provides that Magnusson-Moss claims can be brought “in any court of
competent jurisdiction in any State or District of Columbia” without regard to the
amount in controversy. Barnes v. West, Inc., 249 F. Supp. 2d 737, 739 (E.D. Va. 2003)
(citing 15 U.S.C. § 2310(d)(1)(A)). Thus, if diversity jurisdiction can be established over
the state law claim, the Court can exercise supplemental jurisdiction over the
Magnusson-Moss claims even if the amount in controversy in those claims is below
$50,000. Id; see also Day v. Kia Motors America, Inc., No. 2:16-cv-01208-JHE, 2017 WL
264459, at *4 (N.D. Ala. Jan. 20, 2017).
In their Complaint, Plaintiffs seek a refund of the purchase price of the
$86,428.56 GLS450 or a replacement GLS450 in addition to unspecified incidental and
consequential damages. However, in their Motion to Remand, Plaintiffs again claim
that they will not be able to recover the requisite jurisdictional amount, this time
$75,000. Further adding to the confusion, Plaintiffs denied Mercedes’ request for
admission that they would never seek damages in excess of $75,000, exclusive of

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interests and costs. (State Ct. Resp. to Def.’s First Set of Req. for Admis. 2-3, ECF No.
1-1).
Courts within this district have held that a plaintiff’s refusal to admit or
stipulate that they will not accept more than the requisite amount in controversy in
damages is sufficient proof that the jurisdictional amount exceeds that amount. Hanes
v. Family Dollar Stores of Miss., No. 4:16CV253-SA-JMV, 2017 WL 1418281, at *2
(N.D. Miss. Apr. 20, 2017); see also Blount v. Hardcastle, No. 2:04CV203-P-A, 2006 WL
278567, at *2 (N.D. Miss. Jan. 5, 2006); Fields v. Household Bank, 280 F. Supp. 2d 530,
532 (N.D. Miss. 2003); Draper v. U.S. Fid. & Guar. Co., 2000 WL 268565, at *3 (S.D.
Miss. Mar. 8, 2000); McLain v. Am. Int’l Recovery, Inc., 1 F. Supp. 2d 628, 631 (S.D.
Miss. 1998). Nevertheless, because Mercedes failed to specify claims in the request for
admissions but aggregated all of the claims,1 Plaintiffs’ denial is too vague for the Court
to rely on in determining the amount in controversy for the state law claim.
Discovery
Given the circumstances of this case, the Court is of the opinion that limited
discovery is necessary to decide if remand is warranted.1 The Court, heeding the Fifth

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“REQUEST NO. 9: Admit that you will never seek damages [nor] will you
execute[] on any judgment rendered in your favor in this proceeding against [Mercedes]
or any related or affiliated entity in excess of $75,000, exclusive of interests and costs.
ANSWER: Plaintiffs deny.”
(State Ct. Resp. to Def.’s First Set of Req. for Admis. 2, ECF No. 1-1).
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Plaintiffs filed an untimely Reply to Defendant’s Response to Plaintiffs’ Motion
to Remand [10], which included an Amended Response to Defendant’s First Set of
Request for Admission [10-1]. In their Amended Response Plaintiffs admit that they
will never seek damages in excess of $50,000 or $75,000. (Pls.’ Am. Resp. to Def.’s First
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Circuit’s admonition that such discovery be kept on “a tight judicial tether, sharply
tailored to the question at hand,” Smallwood, 385 F.3d at 574, will limit the scope of
discovery to information needed to determine the jurisdictional amount(s) with respect
to the Magnusson-Moss claims and the state law claim as of the time of removal. The
limited discovery must be completed by September 19, 2017.
IT IS THEREFORE ORDERED AND ADJUDGED that the parties are
granted until September 19, 2017, to conduct remand-related discovery limited to
information needed to determine the jurisdictional amount at the time of removal for
each of Plaintiffs’ claims.
IT IS FURTHER ORDERED AND ADJUDGED that Plaintiffs must file an
Amended Motion to Remand and a Memorandum Brief by October 6, 2017, and sooner
if possible. The time for Mercedes to file a response to the Motion to Remand will begin
to run on the date that Plaintiffs file their Amended Motion.
SO ORDERED AND ADJUDGED this the 28th day of July, 2017.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE

Set of Rep. for Admis. 2-3, ECF No. 10-1). Even if the Court considers the untimely
filing, Plaintiffs’ post-removal admissions lend further support to the Court’s conclusion
that limited discovery is necessary.
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