Suber v. Chrysler Corporation

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
1-15-1997
Suber v. Chrysler Corporation
Precedential or Non-Precedential:
Docket 95-5735
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
95-5735
JAMES SUBER,
Appellant
v.
CHRYSLER CORPORATION
v.
KONTINENTAL KOACHES,INC., a/k/a and d/b/a
KONTINENTAL KONVERSIONS,
Third-party defendant
CHRYSLER CORPORATION,
Third-party plaintiff
On Appeal from the United States District Court
For the District of New Jersey
D.C. Civ. No. 94-cv-00467
Argued: July 25, 1996
Before: BECKER, STAPLETON, and MICHEL, Circuit Judges*
(Opinion Filed January 16, 1997)
ROBERT M. SILVERMAN, ESQUIRE (ARGUED)
Cynthia M. Certo, Esquire
Kimmel & Silverman
630 Sentry Park
Suite 310
*
The Honorable Paul R. Michel, United States Circuit Judge
for the Federal Judicial Circuit, sitting by designation.
1
Blue Bell, PA 19422
Counsel for Appellant
KEVIN M. MCKEON, ESQUIRE (ARGUED)
Marshall, Dennehey, Warner,
Coleman & Goggin
Three Greentree Center
Suite 304
Marlton, NJ 08053-3405
Counsel for Appellee
OPINION OF THE COURT
BECKER, Circuit Judge.
This appeal in a "Lemon law" case presents the question
whether the district court erred in dismissing for lack of
subject matter jurisdiction the claims of the plaintiff, James
Suber, brought against Chrysler Corporation on account of alleged
defects in the 1993 Dodge Ram 250 Conversion Van that he
purchased from a Chrysler dealership, Cherry Hill Dodge. The
district court held that Suber's claims failed to meet the
$50,000 amount in controversy requirement of the federal
diversity statute, 28 U.S.C. § 1332, inasmuch as: (1) the New
Jersey Consumer Fraud Act was inapplicable, rendering Suber
ineligible for the treble damages that are available under that
statute; and (2) Suber's remaining claims did not satisfy the
jurisdictional requirement.
We review the dismissal of Suber's complaint for
failure to establish subject matter jurisdiction, hence we
consider only whether plaintiff's claims, taken as true, allege
2
facts sufficient to invoke the jurisdiction of the district
court. Licata v. U.S. Postal Serv., 33 F.3d 259, 260 (3d Cir.
1994). Because we find that the district court dismissed the
complaint without properly evaluating Suber's claims under the
prevailing standard of St. Paul Mercury Indemnity Co. v. Red Cab
Co., 303 U.S. 283 (1938), we vacate and remand for further
proceedings.
I. Facts1
Suber purchased the Dodge van from Cherry Hill Dodge
("the dealership") on April 28, 1993.2 Prior to Suber's
purchase, Kontinental Koaches, Inc., a third-party defendant,
renovated the van, installing new seats, carpeting, upholstery, a
sofa, and other accessories. The sticker price of the car, with
these improvements, was approximately $29,895.00. Almost
immediately after taking possession, Suber discovered problems
with the van, especially its suspension. In particular, the van
had a tendency to "bottom out," even on relatively smooth road
surfaces.
Suber avers that he returned the van to the dealer at
least four times over the course of several months. When he
returned the van on May 10, 1993, he complained of the "bottoming
out," as well as a harsh ride, steering drift, and other defects.
One week later, on May 17, 1993, he complained about the van's
1
The facts are drawn from Suber’s complaint, Suber’s
deposition testimony, and the briefs and accompanying exhibits
submitted pursuant to Chrysler’s motion for summary judgment.
2
It is unclear from the record whether Cherry Hill Dodge is
owned by Chrysler or is privately owned.
3
suspension, steering, brakes, driver's seat, rear door handle,
electrical system, and the running boards. The dealership told
Suber that nothing was wrong with the van, but balanced the
tires.
Because the problems with his van persisted, Suber
returned to the dealership on June 9, 1993 with the same
complaints. The dealership serviced the van, by aligning the
front end and balancing the wheels, but again told Suber that
there was nothing wrong. A few weeks later, on or around June
25, 1993, the van "bottomed out" so severely that it caused one
of the front tires to go flat. Suber had the tire replaced on
his own, without returning to the dealership.
On June 28, 1993, Suber filed a claim with the Customer
Arbitration Board ("CAB"), an informal dispute resolution body
established by Chrysler under the New Jersey Lemon Law, N.J.S.A
56:12-36. Pursuant to CAB procedures, a Chrysler representative,
George Bomanski, and a dealership employee inspected and road
tested the van. According to Suber, both men told him that there
was a problem with the van's suspension. However, the official
report filed by Bomanski stated that the suspension system was
fine. By letter dated August 5, 1993, the CAB found that Suber's
complaint regarding the suspension was groundless, and it denied
Suber's request for a refund of the purchase price because "the
use, value and safety of [the] vehicle has not been substantially
impaired."3
3
The CAB did rule that Chrysler was responsible for
repairing the door panel, handle, and exterior trim, and
performing an oil usage test. It also ruled, however, that the
4
According to Suber, the suspension problems persisted
through July 1993. The van failed Pennsylvania motor vehicle
inspection at that time because of its suspension, including
"obviously compressed front springs." Additionally, Suber claims
that he returned the van to the dealership on two occasions when
the dealership did not supply him with a copy of the repair
invoice.
On July 16, 1993, Suber again left the van with the
dealership for service. This appears to be the same day that he
met with Bomanski and the dealership employee for the CAB
inspection. The dealership told him that it would contact him
when the repairs were completed. On August 16, 1993, having
heard nothing, he called and was informed that his van was not
yet ready. He went to the dealership and found his van parked in
the back lot. The dealership's repair invoices show that the
last work on the van was performed on July 22, 1993.
Subsequent to Suber's last repair attempt, Chrysler
sent to owners of 1993 and 1994 Dodge Ram Vans and Wagons,
including Suber, a "Customer Satisfaction Notification." This
notice informed these Dodge owners that the front coil springs on
their vehicles needed to be replaced:
The service is needed to prevent the front suspension
from bottoming out when traveling over rough
surfaces. Without the service we are
offering, the vehicle identified on the
enclosed form may exhibit a harsh ride or
suspension noises. We ask that you arrange
for this important service without delay.
other alleged defects either did not exist or were not the result
of a Chrysler manufacturing defect. App. 305A.
5
In conjunction with this notice, Chrysler sent to its dealers a
"Technical Services Bulletin" dated September 3, 1993 that
detailed the repair work necessary to correct suspension problems
like those experienced by Suber.
Suber contends that his van's suspension is defective
to this day, and that the van has never passed the Pennsylvania
inspection. A mechanic retained by Suber's counsel inspected the
car on March 2, 1995 and found that the suspension system was in
an "extremely dangerous condition" and that the car was unsafe to
drive. In response, Chrysler points out that Suber has continued
to drive the van. At the time of the CAB inspection in July
1993, the van had 5057 miles on it. When a Chrysler
representative road tested the van on March 13, 1995, it had
16,514 miles on it. The Chrysler representative concluded that
the van has no suspension problems.
II. Procedural History
Suber filed a complaint against Chrysler in the
District Court for the District of New Jersey, alleging
violations of the New Jersey Automobile Lemon Law, N.J.S.A §
56:12-29 et seq.; the Magnuson-Moss Warranty Act, 15 U.S.C. §
2301 et seq.; the New Jersey Uniform Commercial Code, N.J.S.A. §
12A:1-101 et seq.; and the New Jersey Consumer Fraud Act,
N.J.S.A. § 56:8-1 et seq. ("NJCFA"). Suber alleged that the
district court had subject matter jurisdiction under the
diversity statute because the amount in controversy exceeds
$50,000.4 Soon after the complaint was filed, the district court
4
The Magnuson-Moss Warranty Act requires that the amount in
6
considered sua sponte whether it had subject matter jurisdiction
and issued an Order to Show Cause. The plaintiff responded by
letter, and the court withdrew the order. Chrysler then moved
for summary judgment, asserting that the evidence could not
support Suber's legal claims.
On September 5, 1995, the district court sua sponte
dismissed Suber's complaint for lack of subject matter
jurisdiction, Fed. R. Civ. P. 12(b)(1), holding that the amount
in controversy did not exceed $50,000. Relying on a New Jersey
Appellate Division decision, D'Ercole Sales, Inc. v. Fruehauf
Corp., 501 A.2d 990 (N.J. Super. Ct. App. Div. 1985), the court
held that the "New Jersey Consumer Fraud Act, which contains a
mandatory treble damage provision, is inapplicable to the case at
bar," Mem. Op. at 3-4, because Suber failed to "provide [the
district court] with evidence of defendant's allegedly
unconscionable conduct or 'substantial aggravating circumstances'
surrounding defendant's alleged breach of the express
warranties." Id. at 3. Under D’Ercole Sales, breach of warranty
without substantial aggravating circumstances is not actionable
as a NJCFA claim.
Having found that Suber could not rely on the treble
damages available under the NJCFA to meet the amount in
controversy requirement, the court stated that it was satisfied
"to a legal certainty" that Suber's remaining claims could not
exceed the $50,000 barrier. Id. at 4. It reasoned that the
controversy exceed $50,000 to establish federal jurisdiction,
even though it is a federal provision. 15 U.S.C. § 2310(d).
7
maximum amount that the plaintiff could recover under either the
Magnuson-Moss Warranty Act or the Lemon Law is the full refund
price of the vehicle if found defective, $29,895.00. The court
noted that attorney's fees should be included, but stated that
these fees would have to exceed $20,105.00 to get to the
jurisdictional amount, which it held would be clearly excessive.
Id.
Suber has filed a timely appeal, contending primarily
that the district court failed to apply the proper test for
determining the amount in controversy. Our review of the order
dismissing the complaint is plenary. See Packard v. Provident
Nat'l Bank, 994 F.2d 1039, 1044 (3d Cir.), cert. denied sub nom.
Upp v. Mellon Bank, N.A., 510 U.S. 964 (1993).
III. The Amount in Controversy Requirement
For a plaintiff to establish federal diversity
jurisdiction, the amount in controversy must exceed $50,000,
exclusive of interest and costs. 28 U.S.C. § 1332(a). The
standard for determining whether a plaintiff's claims satisfy the
amount in controversy requirement was set out by the Supreme
Court in St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S.
283 (1938), as follows:
The rule governing dismissal for want of jurisdiction
in cases brought in the federal court is
that, unless the law gives a different rule,
the sum claimed by the plaintiff controls if
the claim is apparently made in good faith.
It must appear to a legal certainty that the
claim is really for less than the
jurisdictional amount to justify dismissal.
Id. at 288-89 (emphasis added) (footnotes omitted); see also
8
Nelson v. Keefer, 451 F.2d 289, 292-93 (3d Cir. 1971). In
applying the "legal certainty" test established by St. Paul
Mercury, this Court has stated that "dismissal is appropriate
only if the federal court is certain that the jurisdictional
amount cannot be met." Columbia Gas Transmission Corp. v.
Tarbuck, 62 F.3d 538, 541 (3d Cir. 1995); cf. Lunderstadt v.
Colafella, 885 F.2d 66, 69-70 (3d Cir. 1989) (holding in a
federal question case that "a federal court may dismiss for lack
of jurisdiction only if the claims are 'insubstantial on their
face'").
Once a good faith pleading of the amount in controversy
vests the district court with diversity jurisdiction, the court
retains jurisdiction even if the plaintiff cannot ultimately
prove all of the counts of the complaint or does not actually
recover damages in excess of $50,000. St. Paul Mercury, 303 U.S.
at 288. Accordingly, the question whether a plaintiff's claims
pass the "legal certainty" standard is a threshold matter that
should involve the court in only minimal scrutiny of the
plaintiff's claims. The court should not consider in its
jurisdictional inquiry the legal sufficiency of those claims or
whether the legal theory advanced by the plaintiffs is probably
unsound; rather, a court can dismiss the case only if there is a
legal certainty that the plaintiff cannot recover more than
$50,000. As we stated in Lunderstadt, the "threshold to
withstand a motion to dismiss under Fed. R. Civ. P. 12(b)(1) is
thus lower than that required to withstand a Rule 12(b)(6)
motion." Lunderstadt, 885 F.2d at 70; Batoff v. State Farm Ins.
9
Co., 977 F.2d 848, 852 (3d Cir. 1992).
The temporal focus of the court's evaluation of whether
the plaintiff could conceivably prevail on its claim is on the
time that the complaint was filed. While courts generally rely on
the plaintiff's allegations of the amount in controversy as
contained in the complaint, "where a defendant or the court
challenges the plaintiff's allegations regarding the amount in
question, the plaintiff who seeks the assistance of the federal
courts must produce sufficient evidence to justify its claims."
Columbia Gas, 62 F.3d at 541. We have also held that "the record
must clearly establish that after jurisdiction was challenged the
plaintiff had an opportunity to present facts by affidavit or by
deposition, or in an evidentiary hearing, in support of his
jurisdictional contention." Berardi v. Swanson Memorial Lodge No.
48 of the Fraternal Order of Police, 920 F.2d 198, 200 (3d Cir.
1990) (quoting Local 336, American Federation of Musicians, AFL-
CIO v. Bonatz, 475 F.2d 433, 437 (3d Cir. 1973)); see also 5A
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1350, at 213-18 (2d ed. 1990).
The question whether there is a legal certainty that
Suber's claims are for less than $50,000 depends on what damages
Suber could conceivably recover under New Jersey state law, and we
must therefore consider the applicable New Jersey statutes and
Suber’s allegations under them.
IV. The New Jersey Lemon Law
The New Jersey Lemon Law provides a remedy to consumers
who purchase defective vehicles, as Suber claims he has. Under
10
this law, if a consumer reports a "nonconformity" in a vehicle to
the manufacturer or its dealer during the first 18,000 miles or
within two years of the date of delivery to the consumer, the
manufacturer must make, or arrange with the dealer to make, the
necessary repairs "within a reasonable time." N.J.S.A. 56:12-31.
The statute defines a "nonconformity" as a "defect or condition
which substantially impairs the use, value or safety of a motor
vehicle." Id. 56:12-30. According to the New Jersey courts,
whether a defect rises to the level of an actionable
nonconformity depends on whether it "shakes the buyer's
confidence" in the goods. See Berrie v. Toyota Motor Sales,
U.S.A., Inc., 630 A.2d 1180, 1182 (N.J. Sup. Ct. App. Div. 1993).
Thus, if a "reasonable person" in Suber's position could
conclude that the "bottoming out" "impairs the use and value of
the car and shakes [his] confidence in it," then the suspension
problems with Suber's van qualify as nonconformities. Id. at
1183.
If the manufacturer or dealer is unable to correct the
nonconformity within a reasonable time, the vehicle is a true
"lemon" and the owner is entitled to damages. The law presumes
that a manufacturer is unable to correct a nonconformity within a
reasonable time if the owner has made three or more unsuccessful
repair attempts or the vehicle "is out of service by reason of
repair for one or more nonconformities" for a total of twenty
days. N.J.S.A. 56:12-33.
We find that Suber has sufficiently alleged that the
use and value of his van are impaired such that we cannot
11
conclude that the alleged suspension problems could not
conceivably be found to constitute nonconformities. Suber stated
in his affidavit that the van has never passed the Pennsylvania
inspection test, and a mechanic he hired has stated that it is
unsafe to drive. Chrysler recalled all 1993 Dodge Ram vans and
wagons for the same defect, even while the dealership contended
that there was nothing wrong with the van. Suber has also
alleged that his van presumptively cannot be fixed: in his
affidavit, he stated that he has made more than three repair
attempts and that the vehicle remained out of service for repairs
for more than 20 days. When his complaint was filed, then, it
was conceivable that Suber's van was a true "lemon" and that he
was entitled to recovery.5
If successful on his Lemon Law claims, Suber could
recover the full refund value of the car plus collateral damages,
mainly finance charges. The statute provides:
The manufacturer shall provide the consumer with a full
refund of the purchase price of the original
motor vehicle including any stated credit or
allowance for the consumer's used motor
vehicle, the cost of any options or other
modifications arranged, installed, or made by
the manufacturer or its dealer within 30 days
after the date of original delivery, and any
other charges or fees including, but not
limited to, sales tax, license and
registration fees, finance charges . . . less
a reasonable allowance for vehicle use.
5
There is evidence that shows that Suber's van has been
driven for over 16,000 miles, calling into question Suber's
claims that his car is valueless. However, considering such
evidence is not proper at the jurisdictional stage, unless that
evidence suggests that the amount in controversy allegations were
not made in good faith. We conclude that this evidence does not
make it certain that Suber could not prevail on his Lemon Law
claim.
12
Id. 56:12-32 (emphasis added).
Moreover, in calculating the amount in controversy, we
must consider potential attorney's fees. Although 28 U.S.C. §
1332 excludes "interest and costs" from the amount in
controversy, attorney's fees are necessarily part of the amount
in controversy if such fees are available to successful
plaintiffs under the statutory cause of action. See Missouri
State Life Ins. Co. v. Jones, 290 U.S. 199 (1933). They are
here. See N.J.S.A. 56:12-42 ("In any action by a consumer
against a manufacturer brought in Superior Court or in the
division pursuant to the provisions of this act, a prevailing
consumer shall be awarded reasonable attorney's fees, fees for
expert witnesses and costs.").
The district court began and ended its inquiry with the
sticker price of the van, which was $29,895. Because we have
concluded that it is conceivable that Suber’s van is a total
“lemon,” we agree that Suber is entitled to include the entire
sticker price of the van in the amount in controversy. Without
considering potential collateral charges, however, the district
court dismissed the complaint because the attorney's fees that
would be available to Suber if he prevailed could not get him
over $50,000. The district court erred, therefore, in not
considering the collateral charges, particularly finance charges,
as part of the amount in controversy.
The question before us, then, is how to calculate
Suber's collateral charges for purposes of the amount in
13
controversy inquiry. According to Suber, his total Lemon Law
damages are $40,015.20. As stated on his contract with the
dealership, sales tax and registration fees bring the cost of the
van to $31,649. Once finance charges are added, Suber alleges
that the total cost of the van is $41,404.20.6 As calculated by
Suber, the reasonable allowance for use that is required to be
deducted pursuant to the Lemon Law is $1,389.10, which brings the
total to $40,015.20.7 If Suber’s allegation is correct,
attorney’s fees necessary to get him above the $50,000 threshold
might not be unreasonable.
However, in considering Suber's claimed amount in
controversy, we are given pause by his contention that he is
entitled to count the total finance charges stated in the
financing agreement toward the amount in controversy. We find
this unlikely. Suber would pay the total charges if it took him
the entire finance period to pay for the van, but not if he paid
off the car loan before that time. Under New Jersey law, a
borrower may prepay a retail installment sales loan in full at
6
Suber financed $26,779.11. With an 8.5% interest rate, his
total finance charges are $8595.21. Suber’s down payment, which
included cash, a rebate, and the value of his trade-in, was
$6029.88. Added together, this brings the total price as stated
in the Retail Sales Installment Contract to $41,404.20.
The amount financed includes optional credit life insurance
that totals $1085.99.
7
Under N.J.S.A. 56:12-30, the reasonable allowance for
vehicle use is calculated by multiplying the purchase price by
the mileage at the time the consumer first presents the vehicle
to the dealer for repair of the nonconformity and dividing that
number by 100,000 miles. In this case, if $41,404.20 is
multiplied by 3,355 (the mileage at the time of the first
suspension complaint), and then that is divided by 100,000, the
result is $1,389.10.
14
any time and obtain a credit for unaccrued interest. N.J.S.A.
17:16C-43. If, for example, Suber had made his car payments for
three months, and then decided to pay the remaining principal on
his loan, the only finance charges he would pay would be the
interest included in the three payments that he made. He would
be entitled to a refund for the remaining, unpaid finance
charges. Concomitantly, had Suber been awarded Lemon Law damages
by the district court after making three car payments, his
damages would include only those finance charges that he had
paid. See, e.g., Gambrill v. Alfa Romeo, Inc., 696 F. Supp.
1047, 1048 (E.D. Pa. 1988) (calculating damages under
Pennsylvania Lemon Law).8 Accordingly, it seems to us that
Suber will be entitled to recover in this action only those
finance charges that he has paid at the time of the judgment.
The question of how to determine finance charges for
the purposes of the amount in controversy requirement is thus a
difficult one that involves a measure of speculation. We have
held that the amount in controversy should not be “measured by
the low end of an open-ended claim, but rather by a reasonable
reading of the value of the rights being litigated.” Angus v.
Shiley Inc., 989 F.2d 142, 146 (3d Cir. 1993). Because the
district court failed to make this determination with respect to
the finance charges that Suber can include in the amount in
controversy, it erred in concluding that there is a legal
8
The same is true for the credit life insurance that Suber
financed. He would be entitled to a refund of the unaccrued
premiums upon prepayment of the loan. N.J.S.A. 17:16D-14.
15
certainty that Suber’s claims are for less that $50,000.
We thus will vacate the district court’s order and will
remand the case so that the court can determine whether Suber’s
Lemon Law claim allows him to establish diversity jurisdiction.
In making this determination, the district court should consider
the purchase price of the van, all collateral charges, and
potential attorney’s fees. As Suber’s van is conceivably a total
“lemon,” the district court should start with the purchase price,
$29,895, and add to it sales tax and registration fees, which
bring the total to $31,649. The district court must then
determine the amount of any finance charges and attorneys' fees
includable in Suber's amount in controversy.
V. New Jersey Consumer Fraud Act
We now turn to the New Jersey Consumer Fraud Act
(“NJCFA”) to determine whether Suber can satisfy the amount in
controversy requirement under that law. The NJCFA allows private
plaintiffs to bring suit if they are harmed by an unconscionable
commercial practice. See, e.g., Cox v. Sears Roebuck & Co., 647
A.2d 454, 460-61 (N.J. 1994). Under the NJCFA, the:
act, use or employment by any person of any
unconscionable commercial practice,
deception, fraud, false pretense, false
promise, misrepresentation, or the knowing,
concealment, suppression, or omission of any
material fact with intent that others rely
upon such concealment, suppression or
omission, in connection with the sale . . .
or with the subsequent performance of such
person as aforesaid, whether or not any
person has in fact been misled, deceived or
damaged thereby, is declared to be an
unlawful practice.
N.J.S.A. 56:8-2. If a defendant is found to have committed an
16
unconscionable commercial practice, the statute imposes mandatory
treble damages and attorney's fees. Id. 56:8-19.
Suber also relies on the NJCFA to establish subject
matter jurisdiction. He submits that he has sufficiently alleged
that Chrysler committed unconscionable commercial practices
within the meaning of the NJCFA and that he can, therefore,
include possible NJCFA damages in the amount in controversy, in
particular, the treble damages that are available under that
statute.
The district court rejected this contention and held
that there is a legal certainty that Suber cannot recover under
the NJCFA. It concluded that Suber has not alleged any facts
that could constitute a NJCFA violation because Suber’s only
claim is for breach of warranty, which is not actionable under
the NJCFA. The court, relying on the New Jersey Appellate
Division case, D'Ercole Sales, Inc. v. Fruehauf Corp., 501 A.2d
990 (N.J. Super. Ct. App. Div. 1985), held that Suber has failed
to allege "substantial aggravating circumstances,” which New
Jersey law requires to recover for a breach of warranty.
Although the New Jersey Supreme Court has approved of
certain language from D'Ercole Sales, see Cox, 647 A.2d at 462,
it has never directly considered the issue before the D’Ercole
Sales court and thus has never explicitly adopted its holding.
In D’Ercole Sales, the court held that a truck assembler's
failure to honor the warranty was not an "unconscionable consumer
practice" within the meaning of the NJCFA. In so holding, the
court stated that "a breach of warranty, or any breach of
17
contract, is not per se unfair or unconscionable, and a breach of
warranty alone does not violate a consumer protection statute."
501 A.2d at 998 (citations omitted). While acknowledging that a
breach of warranty is unfair to the non-breaching party, it
stated that:
"[i]n a sense, unfairness inheres in every breach of
contract when one of the contracting parties
is denied the advantage for which he
contracted, but this is why remedial damages
are awarded on contract claims. If such an
award is to be trebled, the . . . legislature
must have intended that substantial
aggravating circumstances be present."
Id. at 1001 (emphasis added) (quoting United Roasters, Inc. v.
Colgate-Palmolive Co., 649 F.2d 985, 992 (4th Cir. 1981)).
Because this holding seems unexceptionable, uncontroversial, and
altogether sensible, we predict that D’Ercole Sales would be
followed by the New Jersey Supreme Court, and hence we find that
the District Court correctly concluded that the NJCFA requires
that substantial aggravating circumstances be shown when the
basis for the NJCFA claim is breach of warranty.
Assuming, therefore, that a plaintiff needs to show
substantial aggravating circumstances to prevail under the NJCFA
with what is essentially a breach of warranty claim, we conclude
that the district court incorrectly held that Suber has not
alleged sufficient aggravating circumstances to prevail at the
jurisdictional stage.9 Suber has made allegations that, if
9
Because we cannot determine from the record whether
Chrysler owns the dealership, we consider only those allegations
of unconscionable practices made against Chrysler directly.
18
proven, could constitute substantial aggravating circumstances,
such that we cannot find that recovery is precluded to a legal
certainty. For example, in his affidavit, Suber states that
George Bomanski, a Chrysler representative, told Suber that the
van had suspension problems, but his official report, on which
the CAB based its decision, noted that there were no suspension
problems. Moreover, Suber's allegations that Chrysler knew of
the problem are supported by the Technical Services Bulletin,
which stated that all 1993 and 1994 Dodge Ram vans and wagons
needed repair to correct the suspension problem about which Suber
complained.
At all events, we find that Suber's NJCFA claim appears
to be premised on more than mere breach of warranty. The Lemon
Law has defined certain practices as per se unlawful within the
meaning of the NJCFA. In particular, each time a motor vehicle
is returned for examination or repair during the first 18,000
miles of operation or within two years of purchase, “the
manufacturer through its dealer shall provide to the consumer an
itemized, legible statment of repair.” N.J.S.A. 56:12-34 (b).
Failure to comply with this provision constitutes an unlawful
practice under the NJCFA. Id. 56:12-34 (c). Suber testified in
his deposition that he left the dealership without receiving
repair invoices on at least two occasions.
It thus appears that Suber may not be precluded to a
legal certainty from recovering under the NJCFA. Even though we
have explained that the court should include the treble damages
available under the NJCFA in calculating the amount in
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controversy, we are uncertain as to what his NJCFA damages would
be. The New Jersey Consumer Fraud Act (NJCFA) allows private
plaintiffs to recover for any "ascertainable loss" from an
allegedly unconscionable practice, N.J.S.A. 56:8-2 & 56:8-19,
and imposes mandatory treble damages and attorney's fees, id.
56:8-19. Suber contends that his Lemon Law damages of $40,015.10
are also his NJCFA damages and should be trebled to arrive at
$120,045.30 in damages. That seems unlikely to us.
Unfortunately, the New Jersey Supreme Court has provided little
guidance about quantifying ascertainable loss under the NJCFA.
Because we have already determined that a vacatur and remand is
appropriate in this case, the remand will also permit the
district court to calculate Suber’s potential NJCFA damages and
thus determine whether there is a legal certainty that the claim
is for less that $50,000, once those damages are trebled.
On remand, the court must also determine whether
Suber’s claims can be aggregated. The general rule is that
claims brought by a single plaintiff against a single defendant
can be aggregated when calculating the amount in controversy,
regardless of whether the claims are related to each other.
Snyder v. Harris, 394 U.S. 332, 335 (1969) (“Aggregation has been
permitted . . . in cases in which a single plaintiff seeks to
aggregate two or more of his own claims against a single
defendant.”); see also 1 James Wm. Moore, Moore’s Federal
Practice ¶ 0.97, at 907-08 (2d ed. 1995); 14A Charles Alan Wright
et al., Federal Practice and Procedure § 3704 (2d ed. 1985).
Based on this general rule, we think that Suber’s Lemon Law and
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NJCFA claims can probably be aggregated. We are given pause,
however, by our understanding that these two claims could not be
aggregated if Suber could not recover damages for both. That is,
if these claims are alternative bases of recovery for the same
harm under state law, Suber could not be awarded damages for
both, and a court should not aggregate the claims to arrive at
the amount in controversy.
We think it is likely that the harms sought to be
remedied by the Lemon Law and the Consumer Fraud Act are, in
fact, qualitatively different: the Lemon Law seeks to put a
consumer in as good a position as he or she would have been in
had he or she not purchased the “lemon,” while the NJCFA remedies
the particular “ascertainable loss” suffered by a consumer by
reason of an unconscionable commercial practice. This
understanding has also informed our conclusion, explained above,
that Suber’s potential “ascertainable loss,” for purposes of the
NJCFA, is probably not the value of the van. On the other hand,
we are not entirely confident of these conclusions, and we were
cited to no New Jersey courts addressing this question (nor have
we found any). But this issue was not briefed by the parties,
and they may find some cases. At all events, since we remand
here, we leave the aggregation question in the first instance to
the district court upon remand.
VI. Conclusion
For the foregoing reasons, we will vacate the judgment
and remand this case to the district court to determine, applying
the standard of St. Paul Mercury Indemnity Co. v. Red Cab Co.,
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303 U.S. 283 (1938), whether there is a legal certainty that
Suber’s claims are for less than $50,000. Upon remand, the
district court must give Suber the opportunity to develop the
record in support of his jurisidictional claim, whether through
affidavits, depositions, or an evidentiary hearing. In remanding
this case to the district court, we note that the district court
will also need to consider the availability of diversity
jurisdiction under Suber’s U.C.C. or Magnuson-Moss Act claims,10
as well as whether Suber’s Lemon Law and NJCFA claims can be
aggregated in calculating the amount in controversy.
For the foregoing reasons, the judgment of the district
court will be vacated and the case remanded for further
10
Under the Magnuson-Moss Warranty Act ("Magnuson-Moss"), 15
U.S.C. § 2301 et seq., a consumer who is damaged by the failure
of a dealer or manufacturer to comply with a warranty obligation
can file suit to recover the purchase price plus collateral
damages. Id. § 2310(d). Although it is a federal provision,
federal jurisdiction under Magnuson-Moss is limited to those
cases in which the amount in controversy exceeds $50,000. Id. §
2310(d)(3)(B).
Despite the similarities of this provision to the Lemon Law,
whether a plaintiff satisfies the amount in controversy threshold
is a different question under Magnuson-Moss. Section 2310(d)(3)
expressly excludes "interests and costs" from the calculation of
the amount in controversy. Unlike the federal diversity statute,
the courts that have considered whether attorney fees are costs
within the meaning of the statute have uniformly concluded that
they are and thus must be excluded from the amount in controversy
determination. See, e.g., Boelens v. Redman Homes, Inc., 748
F.2d 1058, 1069 (5th Cir. 1984); Saval v. BL Ltd., 710 F.2d 1027,
1033 (4th Cir. 1983); Mele v. BMW of North America, Inc., No. 93-
2399, 1993 WL 469124, at *3 (D.N.J. Nov. 12, 1993).
Although Suber could therefore probably not establish
jurisdiction with his Magnuson-Moss claim, we leave that question
to the district court upon remand. If the district court finds
that Suber has established diversity jurisdiction with his Lemon
Law or NJCFA claim, the court can exercise supplemental
jurisdiction over the Magnuson-Moss Act claim. 28 U.S.C. §
1367(a).
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proceedings consistent with this opinion. The parties shall bear
their own costs.
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