Bourland v. Ford Motor Company ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 ROBERT BOURLAND AND ALYSON 8 BOURLAND, Case No. 5:19-cv-08456-EJD 9 Plaintiffs, ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND 10 v. Re: Dkt. No. 17 11 FORD MOTOR COMPANY, et al., 12 Defendants. 13 Plaintiffs Robert and Alyson Bourland initiated this suit in state court against Defendants 14 Ford Motor Company (“FMC”) and Sunrise Ford (“Sunrise”), asserting claims for breach of 15 implied and express warranties under California’s Song-Beverly Consumer Warranty Act, 16 violation of the federal Magnuson-Moss Warranty Act (“the Magnuson-Moss Act”), negligent 17 repair, and fraud. FMC removed this action to federal court pursuant to 28 U.S.C. §§ 1441 and 18 1446, asserting federal question jurisdiction and supplemental jurisdiction pursuant to 28 U.S.C. 19 §§ 1331 and 1367(a) as well as asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332. 20 Notice of Removal (“Notice”) 1, Dkt. No. 1. Plaintiffs now move to remand asserting that removal 21 on those grounds was improper. Motion to Remand, Dkt. No. 17. The Court took the matter under 22 submission without oral argument pursuant to Civil Local Rule 7-1(b). Having considered the 23 Parties’ papers, the Court GRANTS Plaintiffs’ motion to remand. 24 I. BACKGROUND 25 A. Factual Background 26 In mid-January, 2012, Plaintiffs purchased a 2012 Ford F-250 (“the Vehicle”), which was 27 1 manufactured and distributed by Defendant FMC. Notice, Exhibit D First Amended Complaint 2 (“FAC”) ¶ 8, Dkt. No. 1-4. In connection with the Vehicle’s purchase, Plaintiffs received an 3 express written warranty, including “a 3-year/36,000-mile express bumper to bumper warranty 4 and a 5-year/60,000-mile powertrain warranty which, inter alia, cover[ed] the engine and 5 transmission.” Id. ¶ 9. The warranty provided, in relevant part, if the Vehicle developed a defect 6 during the warranty period, Plaintiffs could deliver the Vehicle for repair services to FMC or their 7 representatives. Id. During the warranty period, the Vehicle did in fact develop defects relating to 8 the engine such as: defects causing the water pump to leak, defects causing loss of power, defects 9 causing the fuel fluid to leak, defects causing failure and/or replacement of the gasket bracket, and 10 a host of other defects. Id. ¶ 10. In connection with these defects, Plaintiffs delivered the Vehicle 11 to Defendant Sunrise1 for substantial repair on at least one occasion. Id. ¶ 50. Plaintiffs allege that 12 Sunrise was negligent in “failing to properly store, prepare and repair the Subject Vehicle in 13 accordance with industry standards.” Id. ¶ 52. 14 Plaintiffs allege that as a result of the defects, breaches of warranty committed by FMC, 15 and the negligence of Sunrise, they suffered damages “in a sum to be proven at trial in an amount 16 that is not less than $25,001.00.” Id. ¶ 12. In the prayer for relief, Plaintiffs seek, among other 17 relief, actual damages, restitution, a civil penalty in the amount of two times Plaintiffs’ actual 18 damages pursuant to California Civil Code section 1794, subdivision (c) or (e), punitive damages, 19 as well as reasonable attorneys’ fees. Id. at Prayer. 20 B. Procedural Background 21 On October 15, 2019, Plaintiffs filed this action in Santa Clara County Superior Court. 22 Notice, Exhibit A Original Complaint (“Original Compl.”), Dkt. No. 1-1. Plaintiffs filed an 23 amended complaint on November 25, 2019, correcting an error in the original complaint 24 25 1 In the FAC and original complaint, Plaintiffs actually allege that they delivered the Vehicle to “Defendant BMW SD.” Such a defendant is mentioned nowhere else in the action, nor does 26 Bayerische Motoren Werke AG, commonly referred to as BMW, have anything to do with this action involving a Ford vehicle. Given that the remainder of the seventh cause of action, and the 27 action overall, refers to Sunrise Ford, the Court assumes that the reference to BMW is an error. 1 misidentifying the vehicle and amending the description of defects, but otherwise leaving the 2 causes of action essentially unchanged. Compare FAC ¶¶ 8, 10 with Original Compl. ¶¶ 8, 10. On 3 December 30, 2019, Defendants removed this case to federal court. Notice. 4 Thereafter, on July 28, 2020, Plaintiffs moved to remand this case to state court, 5 challenging Defendants assertions of subject matter jurisdiction. Memorandum of Points and 6 Authorities in Support of Plaintiffs’ Motion to Remand (“Mem. P. & A.”) 1, Dkt. No. 17-1.2 7 Defendants filed their opposition on August 11, 2020. Opposition to Plaintiffs’ Motion to Remand 8 (“Opp.”) 1, Dkt. No. 18. Finally, Plaintiffs filed a reply on August 18, 2020. Reply in Support of 9 Plaintiffs Motion to Remand (“Reply”), Dkt. No. 20. 10 II. LEGAL STANDARD 11 “Except as otherwise expressly provided by Act of Congress, any civil action brought in a 12 State court of which the district courts of the United States have original jurisdiction, may be 13 removed by the defendant or the defendants, to the district court of the United States for the 14 district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). An 15 action in which a federal question is involved, or over which a court has diversity jurisdiction, is 16 thus removable. See 28 U.S.C. §§1331-32. However, there is a “strong presumption against 17 removal jurisdiction,” and a defendant “always has the burden of establishing that removal is 18 proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also Harris v. Bankers Life 19 and Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005) (“removal statutes should be construed narrowly 20 in favor of remand to protect the jurisdiction of state courts”). 21 A motion to remand due to a procedural defect may be made within 30 days after the filing 22 of a notice of removal, but if “at any time before final judgment it appears that the district court 23 lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C § 1447(c). Federal 24 jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance. 25 Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). Indeed, federal courts 26 27 2 Plaintiffs’ accompanying request for judicial notice of district court decisions is granted. 1 are “particularly skeptical of cases removed from state court.” Warner v. Select Portfolio 2 Servicing, 193 F. Supp. 3d 1132, 1134 (C.D. Cal. 2016) (citing Gaus, 980 F.2d at 566). 3 III. DISCUSSION 4 Defendants assert two alternative bases for removal. First, they assert that this Court has 5 federal question jurisdiction over the claim for relief based on the Magnuson–Moss Act, and 6 supplemental jurisdiction over Plaintiffs’ additional state-law claims pursuant to 28 U.S.C. § 1367. 7 Notice ¶ 19. Second, Defendants assert that this Court has diversity jurisdiction over the action 8 pursuant to 28 U.S.C. § 1332. Notice ¶ 44. In response, Plaintiffs argue that (1) FMC has not 9 shown that the amount in controversy exceeds $50,000 as required by the Magnuson-Moss Act, 10 and so federal question jurisdiction is improper, Mem. P. & A. at 4, and (2) diversity jurisdiction 11 does not exist both because the amount in controversy is not met, as well as because Defendant 12 Sunrise destroys complete diversity between the parties, id. at 2. The Court now addresses these 13 arguments. 14 A. Federal Question 15 Title 28 U.S.C. § 1331 provides that “[t]he district courts shall have original jurisdiction of 16 all civil actions arising under the Constitution, laws, or treaties of the United States.” The 17 Magnuson-Moss Act, which is a federal statute governing warranties on consumer products, 18 provides that no claim shall be cognizable in a district court “if the amount in controversy is less 19 than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all 20 claims to be determined in this suit.” 15 U.S.C. § 2310(d)(3)(b). The Ninth Circuit has held that 21 “the amount in controversy includes all relief to which the plaintiff is entitled if the action 22 succeeds.” Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 795 (9th Cir. 2018) 23 (emphasis in original) (finding that attorneys’ fees could be included under the Class Action 24 Fairness Act despite its similar language excluding “interest and costs”, and specifically rejecting 25 a Seventh Circuit decision excluding attorneys’ fees from Magnuson-Moss Act calculations). 26 Ordinarily, when a complaint “alleges on its face an amount in controversy sufficient to meet the 27 1 federal jurisdictional threshold, such requirement is presumptively satisfied unless it appears to a 2 ‘legal certainty’ that the plaintiff cannot actually recover that amount.” Guglielmino v. McKee 3 Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). However, “where it is unclear or ambiguous from 4 the face of a state-court complaint whether the requisite amount in controversy is pled,” the 5 removing defendant must prove, by a preponderance of the evidence, that the amount in 6 controversy exceeds the jurisdictional amount. Id. (citing Sanchez v. Monumental Life Ins. Co., 7 102 F.3d 398, 404 (9th Cir. 1996)). 8 1. Legal Certainty 9 Defendants first contend that, on its face, Plaintiffs’ complaint alleges “more than $25,001 10 in damages, plus (2) two times the amount of damages, i.e., more than $50,002, as a penalty,” 11 Opp. at 4, and hence that the “legal certainty” standard should apply. In response, Plaintiffs argue 12 that “the word, ‘damages,’ references Plaintiffs’ total damages, which include: 1) actual damages; 13 2) civil penalties; 3) attorney’s fees; and 4) punitive damages.” Mem. P. & A. at 6. Defendants 14 argue that the “legal certainty” test has been “applied to complaints virtually identical in relevant 15 part to the complaint at issue here.” Opp. at 4 (analogizing to Bernstein v. BMW of N. Am., LLC, 16 2018 WL 2210683 (N.D. Cal. May 15, 2018). In Bernstein, however, the complaint alleged that 17 “[t]he amount in controversy exceeds TWENTY FIVE THOUSAND DOLLARS. ($25,000.00), 18 exclusive of interest and costs, for which Plaintiff seeks judgment against Defendants, together 19 with equitable relief. In addition, Plaintiff seeks damages from Defendants, and each of them, for 20 incidental, consequential, exemplary, and actual damages including interest, costs, and actual 21 attorneys’ fees.” Bernstein, 2018 WL 2210683, at *2 (N.D. Cal. May 15, 2018) (emphasis in 22 original). By contrast, Plaintiffs here make no mention in the body of their complaint of excluding 23 interests and costs, and do not mention seeking “exemplary” damages as well as attorneys’ fees 24 separately. FAC ¶ 12. 25 Additionally, while Plaintiffs’ Prayer does distinguish between actual damages, civil 26 penalties, etc., if the damage estimate in the body of the complaint “is not repeated in the Prayer 27 1 for Relief … the complaint fails to allege a sufficiently specific total amount in controversy.” 2 Guglielmino, 506 F.3d at 701 (finding that “[t]he uncertainty which is inherent in the [plaintiffs’] 3 Prayer for Relief place[d] this case within the Sanchez rule,” and concluding that the 4 “preponderance of the evidence” standard applied) (citing Sanchez, 102 F.3d at 404); see also 5 Trahan v. U.S. Bank Nat. Assoc., 2009 WL 4510140, at *3 (N.D. Cal. Nov. 30, 2009) (explaining 6 that because the plaintiff did not repeat his jurisdictional disclaimer in his Prayer for Relief, the 7 complaint was ambiguous and the preponderance of the evidence standard applied), aff’d sub nom. 8 Trahan v. U.S. Bank Nat. Ass’n, 379 F. App’x 628 (9th Cir. 2010). Because there is ambiguity as 9 to whether the $25,001 in “damages” alleged by Plaintiffs in paragraph 12 are total damages or 10 actual damages and because no such specific allegation is repeated in the Prayer, this Court must 11 apply the preponderance of the evidence standard. Guglielmino, 506 F.3d at 701. 12 2. Preponderance of the Evidence 13 Defendants next rest their position on two particular forms of relief sought by Plaintiffs: 14 restitution for the contract price of the Vehicle with accompanying civil penalties and attorneys’ 15 fees. Opp. at 7. Turning first to the contract price, Defendants have shown that the total price of 16 the Vehicle purchased by Plaintiffs in 2012 was $62,726.56. Opp. Exhibit 3, Motor Vehicle Retail 17 Installment Sales Contract (“Sales Contract”), Dkt. No. 19-3. Defendants assert that this contract 18 price, plus two times such in civil penalties, will easily surmount the requisite amount in 19 controversy. Notice ¶ 17. The contract price, however, is subject to a “mileage offset” which 20 reduces the amount to be paid by “that amount directly attributable to use by the buyer prior to the 21 discovery of the nonconformity.” Cal. Civ. Code § 1783.2(d)(2)(C). Defendants argue that this 22 offset is irrelevant to the amount in controversy, but cite no authority in support of their position. 23 Opp. at 8. Defendants are mistaken; a mileage offset is both relevant and important to the 24 calculation of amount in controversy. Mullin v. FCA US, LLC, 2020 WL 2509081, at *3 (C.D. 25 Cal. May 14, 2020) (finding that the plaintiff was “correct that the mileage offset may reduce the 26 amount in controversy,” and that where the defendants “neglected to take the mileage offset into 27 1 account, they failed to meet their burden of showing Plaintiff’s actual damages based on the 2 purchase price of the vehicle.”); Quinones v. FCA US LLC, 2020 WL 4437482, at *1 (C.D. Cal. 3 July 31, 2020) (finding that “[w]ithout information about Plaintiff’s use of the vehicle (such as the 4 number of miles driven), the Court is left with considerable doubt as to the amount in 5 controversy.”); see also Schneider v. Ford Motor Co., 756 F. App’x 699, 701 n.3 (9th Cir. 2018) 6 (holding that “[c]onsideration of the Use Offset was appropriate,” and recognizing that “an 7 estimate of the amount in controversy must be reduced if ‘a specific rule of law or measure of 8 damages limits the amount of damages recoverable.’”). In this case, Defendants have not 9 submitted any evidence (such as the mileage on the Vehicle when it was brought in for repair to 10 Defendant Sunrise) that would allow this Court to determine the actual damages for the amount in 11 controversy. See, e.g., Mullin, 2020 WL 2509081, at *3.3 12 Defendants next contend that when attorneys’ fees in this case are added to damages the 13 amount in controversy exceeds the jurisdictional amount. As mentioned previously, the Ninth 14 Circuit has held that “the amount in controversy includes all relief to which the plaintiff is entitled 15 if the action succeeds” ( Fritsch, 899 F.3d at 795), which in this case includes attorneys’ fees 16 pursuant to Civil Code section 1794(d). Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 17 (9th Cir. 2019) (“[W]hen a statute or contract provides for the recovery of attorneys’ fees, 18 prospective attorneys’ fees must be included in the assessment of the amount in controversy.”). 19 “The defendant retains the burden, however, of proving the amount of future attorneys’ fees by a 20 preponderance of the evidence.” Id. at 927–28. The Ninth Circuit has left it to the district courts 21 “to determine whether defendants have carried their burden of proving future attorneys’ fees, and 22 to determine when a fee estimate is too speculative.” Fritsch, 899 F.3d at 795. The removing 23 24 3 Nearly one month after the reply was filed, Defendants filed a request to submit a supplemental 25 declaration “specifically to address the issue of the mileage offset and its effect on the amount in controversy.” Request to Submit Supplemental Declaration 1, Dkt. No. 25. “Once a reply is filed, 26 no additional memoranda, papers or letters may be filed without prior Court approval.” N.D. Cal. LR 7-3(d). Defendants offer no explanation for the late submission. In the absence of good cause 27 for the late submission, the Court will not consider Defendants’ proffered mileage offset. 1 defendant must use “summary-judgment-type evidence” to show that it is “more likely than not” 2 that the amount in controversy (including attorneys’ fees) exceeds $50,000. Id. 3 In support of their attorneys’ fees calculation, Defendants filed only a declaration showing 4 that (1) claims for attorneys’ fees in these cases regularly approach or exceed $50,000 and (2) 5 recent fee demands by Plaintiffs’ counsel exceed $200,000 in three Song-Beverly cases involving 6 other car manufacturers. Opp. at 7-8. Plaintiffs argue that this is not evidence, but “pure 7 speculation.” Mem. P. & A. at 9. The Court agrees with Plaintiffs—none of the evidence supports 8 Defendants’ theory that in this case the attorneys’ fees amount to more than $50,000. Defendants 9 provide nothing more than mere conjecture. Indeed, all that underlies their conclusion that “claims 10 for attorneys’ fees in these cases regularly approach or exceed $50,000,” Opp. at 7, is a 11 declaration, executed by Defendants’ counsel, that speculates “it is not uncommon, and in fact 12 quite regular, for attorneys’ fees and cost awards … to exceed $50,000,” Declaration of Counsel in 13 Support of Defendants Opposition (“Harlow Decl.”) ¶ 5, Dkt. No. 19. Courts in this district 14 routinely hold that such evidence insufficient. See, e.g., Makol v. Jaguar Land Rover N. Am., LLC, 15 2018 WL 3194424, at *3 (N.D. Cal. June 28, 2018); see also Schneider v. Ford Motor Co., 441 F. 16 Supp. 3d 909, 914 (N.D. Cal. 2020). 17 The Plaintiffs’ complaint does not on its face exceed $50,000. Defendants have failed to 18 provide any evidence which could be used to determine the proper mileage offset to the contract 19 price. And Defendants do not provide any evidence that attorneys’ fees in this case are likely to 20 exceed $50,000. Accordingly, this Court, mindful of the strong presumption against removal 21 jurisdiction, finds that it lacks federal question jurisdiction. 22 B. Diversity Jurisdiction 23 Title 28 U.S.C. § 1332(a) grants district courts “original jurisdiction of all civil actions 24 where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and 25 costs, and is between—(1) citizens of different States.” This statute carries its own amount in 26 controversy requirement, and “[t]here is nothing in the text of the Magnuson–Moss Act that would 27 1 indicate that the amount in controversy for that statute is assessed any differently than the diversity 2 || jurisdiction requirement found in 28 U.S.C. § 1332.” Romo v. FFG Ins. Co., 397 F. Supp. 2d 3 1237, 1240 (C.D. Cal. 2005); Luna v. BMW of N. Am., LLC, 2018 WL 2328365, at *3 (S.D. Cal. 4 May 22, 2018) (same). For the reasons already stated, the Court finds that Defendants have failed 5 to establish by a preponderance of evidence that the amount in controversy exceeds $50,000 for 6 || purposes of Plaintiffs’ Magnuson-Moss Act claim. It follows that the amount in controversy 7 || requirement for diversity jurisdiction has not been satisfied, and this Court need not address 8 whether Defendant Sunrise is a fraudulent defendant. 9 IV. CONCLUSION 10 For the above reasons, the Court GRANTS Plaintiffs’ motion to remand the case to Santa 11 Clara County Superior Court. Defendants have not met the amount in controversy requirement of 12 || the Magnuson-Moss Act, and so this court lacks subject matter jurisdiction as a federal question. 5 13 Defendants have also not met the amount in controversy requirement for diversity. The Clerk of 14 || the Court is directed to REMAND this case to the Santa Clara County Superior Court and close 3 15 || the file. a 16 IT IS SO ORDERED. 3 17 Dated: September 29, 2020 18 Zz NO. EDWARD J. DAVILA 19 United States District Judge 20 21 22 23 24 25 26 27 2g || CASE NO. 5:19-cy-08456-EJD ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND