Cox et al v. Kia Motors America, Inc., No. 5:2020cv02380 - Document 28 (N.D. Cal. 2020)
Court Description: ORDER GRANTING 13 PLAINTIFFS' MOTION TO REMAND. Case remanded to Santa Clara County Superior Court. ***Civil Case Terminated. Signed by Judge Beth Labson Freeman on 9/30/2020. (blflc1S, COURT STAFF) (Filed on 9/30/2020)
Download PDF
<![CDATA[
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 STEPHEN COX and BONNIE COX, Case No. 20-cv-02380-BLF Plaintiffs, 9 ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND v. 10 11 KIA MOTORS AMERICA, INC., [Re: ECF 13] United States District Court Northern District of California Defendants. 12 13 Before the Court is a motion to remand filed by Plaintiffs Stephen and Bonnie Cox (“the 14 15 Coxes”). The Court previously vacated the hearing on the motion. See Order Vacating Hearing, 16 ECF 19. The Court has considered the Coxes’ motion, the opposition filed by Defendant Kia 17 Motors America, Inc. (“Kia”), and the Coxes’ reply. For the reasons discussed below, the motion to remand is GRANTED. 18 19 20 I. BACKGROUND This action arises from the Coxes’ purchase of a 2014 Kia Soul vehicle in December 2013. 21 See SAC ¶ 10, ECF 1-4. The vehicle allegedly contained or developed numerous defects within 22 the warranty period. See SAC ¶ 12. The Coxes claim that they took the vehicle to Kia’s 23 authorized repair facilities on many occasions, but the defects were not fixed. See SAC ¶¶ 57-63. 24 On February 4, 2019, approximately five years after purchasing the vehicle, the Coxes 25 filed this action in the Santa Clara County Superior Court, asserting breach of implied and express 26 warranties under California’s Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), Cal 27 Civ. Code § 1790, et seq., and related state law claims. See Notice of Removal ¶ 2, ECF 1. The 28 Coxes amended their pleading twice in state court, dropping their claim under the Song-Beverly 1 Act and adding a claim under the federal Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2 2310, when they filed the operative second amended complaint (“SAC”). See id. ¶¶ 3-5. Kia 3 thereafter removed the action to federal district court on the basis of federal question jurisdiction 4 arising from the Coxes’ assertion of an MMWA claim in the SAC.1 See id. ¶ 18. The Coxes seek 5 remand, asserting that Kia cannot show the amount in controversy exceeds $50,000 as required for 6 federal jurisdiction in an MMWA case. II. 7 A suit filed in state court may be removed to federal district court by the defendant if the 8 United States District Court Northern District of California 9 LEGAL STANDARD suit originally could have been filed in the district court. See 28 U.S.C. § 1441(a). “A defendant 10 may remove an action to federal court based on federal question jurisdiction or diversity 11 jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). There is a 12 strong presumption that the case lies outside the limited jurisdiction of the federal courts. See id. 13 “[T]he defendant always has the burden of establishing that removal is proper,” and the Court 14 “resolves all ambiguity in favor of remand to state court.” Id. (quotation marks and citation 15 omitted). “If at any time before final judgment it appears that the district court lacks subject 16 matter jurisdiction, the case shall be remanded.” 28 U.S.C.A. § 1447. “[F]ederal courts only have jurisdiction over Magnuson-Moss claims if the amount in 17 18 controversy exceeds $50,000.” Limon-Gonzalez v. Kia Motors Am., Inc., CV 20-4381 PA (JPRx), 19 2020 WL 3790838, at *1 (C.D. Cal. July 7, 2020); see also 15 U.S.C. § 2310(d)(3). “[W]hen a 20 complaint filed in state court alleges on its face an amount in controversy sufficient to meet the 21 federal jurisdictional threshold, such requirement is presumptively satisfied unless it appears to a 22 ‘legal certainty’ that the plaintiff cannot actually recover that amount.” Guglielmino v. McKee 23 Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). “[W]here it is unclear or ambiguous from the 24 face of a state-court complaint whether the requisite amount in controversy is pled,” the defendant 25 has the burden of establishing by a preponderance of the evidence that the jurisdictional threshold 26 is met. Id. 27 28 1 Kia observes that diversity jurisdiction does not lie, because the Coxes are California citizens and Kia maintains its principal place of business in California. See Notice of Removal, ¶¶ 8-9. 2 1 United States District Court Northern District of California 2 III. DISCUSSION As noted above, Kia removed this action based on federal question jurisdiction after the 3 Coxes first asserted an MMWA claim in the SAC. See Notice of Removal ¶ 22, ECF 1. The 4 Coxes seek remand, arguing that Kia cannot meet its burden to show that the amount in 5 controversy exceeds the jurisdictional threshold of $50,000. 6 A. The Amount in Controversy is Not Clear from the Face of the SAC 7 Kia first argues that it appears clear on the face of the SAC that the amount in controversy 8 exceeds $50,000. Specifically, Kia points to the Coxes’ allegation that they “suffered damages in 9 a sum to be proven at trial in an amount that is not less than $25,001.00,” SAC ¶ 14, and their 10 prayer for “a civil penalty in the amount of two times Plaintiff’s [sic] actual damages,” Prayer ¶ f. 11 Kia argues that because the Coxes seek damages in an amount not less than $25,001.00 plus civil 12 penalties of up to two times damages, i.e., up to $50,002.00, it appears on the face of the SAC that 13 the amount in controversy is at least $75,003.00 – more than the jurisdictional minimum of 14 $50,000. In response, the Coxes argue that they intended their allegation of “damages” in an 15 amount not less than $25,001.00 to encompass the total amount in controversy, including any civil 16 penalties. See Reply at 2, ECF 22 (“This allegation, however, references Plaintiffs’ total 17 damages, which includes both actual damages and civil penalties.”). Under the Coxes’ 18 construction, the allegations of the SAC would not be sufficient to show that the jurisdictional 19 threshold is satisfied. 20 “Numerous district courts in this Circuit have concluded that Plaintiffs’ Complaint 21 language – i.e., that Plaintiffs suffered ‘damages in an amount that is not less than $25,001.00’ – is 22 too speculative to conclude that the amount in controversy is satisfied.” Limon-Gonzalez, 2020 23 WL 3790838, at *2 (collecting cases). Those courts found that the term “damages” did not 24 necessarily mean “actual damages,” but could refer to the total amount in controversy, including 25 civil penalties. See, e.g., Feichtmann v. FCA US LLC, No. 5:20-CV-01790-EJD, 2020 WL 26 3277479, at *3 (N.D. Cal. June 18, 2020) (“In the absence of any contradictory allegations in the 27 Complaint, the Court accepts Plaintiff’s explanation that the $25,001.00 figure represents the 28 combined total of actual damages and civil penalties.”); Steeg v. Ford Motor Co., No. 19-CV3 1 05833-LHK, 2020 WL 2121508, at *3 (N.D. Cal. May 5, 2020) (“Because Defendants have not 2 provided a basis for the Court to interpret ‘damages’ to mean ‘actual damages,’ the Court must 3 resolve this ambiguous allegation in favor of remand.”); Edwards v. Ford Motor Co., No. CV 16- 4 05852 BRO (PLAx), 2016 WL 6583585, at *4 (C.D. Cal. Nov. 4, 2016) (“Defendant’s assertion 5 that these damages refer only to actual damages is only an assumption.”). Based on this ambiguity 6 regarding the meaning of “damages,” the courts determined that it was unclear from the face of the 7 complaint that the jurisdictional threshold had been satisfied. 8 United States District Court Northern District of California 9 Kia cites two district court decisions in the Ninth Circuit holding that allegations similar to those in the Coxes’ SAC were sufficient to satisfy the jurisdictional threshold. See Bernstein v. 10 BMW of N. Am., LLC, No. 18-CV-01801-JSC, 2018 WL 2210683, at *2 (N.D. Cal. May 15, 11 2018); McDonald v. BMW of N. Am., LLC, No. 3:17-CV-2011-CAB-BLM, 2017 WL 5843385, at 12 *2 (S.D. Cal. Nov. 28, 2017). While those cases support Kia’s argument, this Court finds that the 13 weight of authority in this Circuit supports the Coxes’ position. Given the multiplicity of cases 14 finding that an allegation of “damages” in an amount not less than $25,001.00 could encompass 15 civil penalties, and the Coxes’ assertion that they intended that meaning, this Court concludes that 16 the SAC is ambiguous and does not clearly show that the amount in controversy exceeds $50,000. 17 The Court recently reached the same conclusion in another MMWA case with nearly identical 18 allegations. See Miller v. Ford Motor Co., No. 19-CV-07382-BLF, 2020 WL 5569706 (N.D. Cal. 19 Sept. 17, 2020). 20 The Court notes that it denied motions to remand in two prior auto warranty cases 21 involving allegations similar to those in the Coxes’ pleading. See Pestarino v. Ford Motor Co., 22 No. 19-CV-07890-BLF, 2020 WL 1904590 (N.D. Cal. Apr. 17, 2020); Verastegui v. Ford Motor 23 Co., No. 19-CV-04806-BLF, 2020 WL 598516 (N.D. Cal. Feb. 7, 2020). Both cases are factually 24 distinguishable from the present case. In Pestarino, the plaintiff alleged that “[t]he amount in 25 controversy exceeds TWENTY-FIVE THOUSAND DOLLARS ($25,000.00),” and that in 26 addition the plaintiff sought damages “for incidental, consequential, exemplary, and actual 27 damages including interest, costs, and actual attorneys’ fees.” Pestarino, 2020 WL 1904590, at 28 *3. The plaintiff did not argue, as do the Coxes here, that the $25,000 figure alleged in the 4 1 complaint encompassed all damages and civil penalties at issue, and in fact he made allegations 2 expressly to the contrary. In Verastegui, the Court determined that construing the plaintiff’s 3 allegation of “damages” to include civil penalties would conflict with other allegations in the 4 complaint. See Verastegui, 2020 WL 598516, at *3. The Court has made no such determination 5 here, and Kia has not identified any allegations in the SAC that preclude the construction argued 6 by the Coxes. Kia cites a number of cases, mostly from outside the Ninth Circuit, holding that “damages” United States District Court Northern District of California 7 8 are distinct from “penalties.” See Opp. at 7-8, ECF 14. None of the cited cases involved auto 9 warranty claims like those at issue here. As a result, they are of little help in determining whether 10 the allegations in the Coxes’ SAC are ambiguous regarding the amount in controversy. Kia also 11 asserts that when determining the amount in controversy, the Court must consider the maximum 12 recoverable civil penalties, an assertion disputed by the Coxes. While the Court agrees with Kia 13 that the maximum recoverable civil penalties must be considered when determining the amount in 14 controversy, see Verastegui, 2020 WL 598516, at *3, the Court cannot determine from the SAC in 15 this case whether such penalties are included in, or in addition to, the alleged “damages” in an 16 amount not less than $25,001.00. In conclusion, the Court finds that it is unclear or ambiguous from the face the SAC 17 18 whether the requisite amount in controversy is pled. 19 B. Kia has Not Submitted Evidence Establishing the Jurisdictional Threshold 20 In light of the ambiguity of the SAC, Kia has the burden to show by a preponderance of the 21 evidence that the amount in controversy exceeds $50,000. Kia attempts to meet this burden by 22 pointing to the purchase price of the vehicle and the Coxes’ claim for attorneys’ fees. 1. 23 Vehicle Purchase Price The Coxes seek “any remedies pursuant to the Magnuson-Moss Act, including but not 24 25 limited to those remedies provided under the Song-Beverly Act. . . .”2 Prayer ¶ a. Remedies 26 under the Song-Beverly Act include reimbursement “in an amount equal to the purchase price paid 27 28 “The MMWA provides a federal cause of action for state warranty claims.” See Tietsworth v. Sears, 720 F. Supp. 2d 1123, 1143 (N.D. Cal. 2010). 5 2 United States District Court Northern District of California 1 by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the 2 nonconformity.” Cal. Civ. Code § 1793.2(d)(1). The “amount directly attributable to use by the 3 buyer,” is calculated based on the number of miles the buyer drove the car before the first relevant 4 repair. See Cal. Civ. Code § 1793.2(d)(2)(C); Mullin v. FCA US, LLC, No. CV 20-2061-RSWL- 5 PJW, 2020 WL 2509081, at *2 (C.D. Cal. May 14, 2020). This statutory offset, referred to by 6 some courts as the “mileage offset,” properly is considered when determining the amount in 7 controversy for jurisdictional purposes. See Mullin, 2020 WL 2509081, at *3 (“Plaintiff is correct 8 that the mileage offset may reduce the amount in controversy.”). 9 Kia submits the Retail Installment Sales Contract showing that the vehicle purchase price 10 was $23,596.49. See Rogerson Decl. ¶¶ 4-6 & Exh. A, ECF 14-2. Kia contends that because the 11 Coxes seek restitution of the purchase price, their actual damages are at least $23,596.49 and the 12 maximum recoverable civil penalties are at least $47,192.98 (twice the purchase price). 13 According to Kia’s calculation, the amount in controversy therefore is at least $70,789.47, which 14 is greater than the jurisdictional minimum for MMWA cases. 15 Kia’s argument is flawed, because as the Coxes point out in their reply, Kia makes no 16 allowance for the mileage offset. It appears on the face of the SAC that the Coxes purchased the 17 vehicle in December 2013 and presented it for repair more than four years later after driving the 18 vehicle approximately 100,000 miles. See SAC ¶¶ 58-62. Kia argues that the mileage offset does 19 not apply in this case, because the Coxes allege that the defects existed and were known to Kia at 20 the time of the vehicle sale. Whether the defects existed or were known to Kia at the time of sale 21 is irrelevant. The mileage offset is based on the buyer’s use of the vehicle prior to the buyer’s 22 discovery of the nonconformity. See Cal. Civ. Code § 1793.2(d)(1). Because Kia has failed to 23 account for the mileage offset, it has failed to establish either the amount of actual damages or the 24 maximum recoverable civil penalties, calculated as twice actual damages. See Mullin, 2020 WL 25 2509081, at *3 (“Because Defendants neglected to take the mileage offset into account, they failed 26 to meet their burden of showing Plaintiff's actual damages based on the purchase price of the 27 vehicle.”). 28 6 1 United States District Court Northern District of California 2 2. Attorneys’ Fees Kia next attempts to show that the jurisdictional threshold is met by the Coxes’ claim for 3 attorneys’ fees under the MMWA and the Song-Beverly Act. The MMWA provides that a 4 prevailing consumer “may be allowed by the court to recover as part of the judgment a sum equal 5 to the aggregate amount of cost and expenses (including attorneys’ fees based on actual time 6 expended) determined by the court to have been reasonably incurred by the plaintiff for or in 7 connection with the commencement and prosecution of such action, unless the court in its 8 discretion shall determine that such an award of attorneys’ fees would be inappropriate.” 15 9 U.S.C.A. § 2310(d)(2). Similarly, the Song-Beverly Act provides that “[i]f the buyer prevails in 10 an action under this section, the buyer shall be allowed by the court to recover as part of the 11 judgment a sum equal to the aggregate amount of costs and expenses, including attorney’s fees 12 based on actual time expended, determined by the court to have been reasonably incurred by the 13 buyer in connection with the commencement and prosecution of such action.” Cal. Civ. Code § 14 1794(d). “[A] court must include future attorneys’ fees recoverable by statute or contract when 15 assessing whether the amount-in-controversy requirement is met.” Fritsch v. Swift Transportation 16 Co. of Arizona, LLC, 899 F.3d 785, 794 (9th Cir. 2018). 17 Notwithstanding the Ninth Circuit’s guidance in Fritsch, the Coxes argue that attorneys’ 18 fees should not be considered in determining the amount in controversy for jurisdictional 19 purposes. In support of this position, the Coxes cite district court cases reasoning that 20 “prospective attorneys’ fees are too speculative for inclusion into amount in controversy,” Yegan 21 v. Ford Motor Co., No. 2:19-cv-01519-RGK(GJSx), 2019 WL 7374627, at *1 (C.D. Cal. Apr. 18, 22 2019), and that inclusion of attorneys’ fees in the amount in controversy is permissive but not 23 mandatory, see Nevarez v. FCA US LLC, No. SA CV 20-00568-DOC-JDE, 2020 WL 2394935, at 24 *2 (C.D. Cal. May 12, 2020). Other cases cited by the Coxes state without discussion that 25 “[a]ttorneys’ fees are ‘costs and interests’ within the definition of the [Song-Beverly] Act, and are 26 therefore, excluded from the calculation” of amount in controversy. Chavez v. FCA US LLC, No. 27 2:19-cv-06003-ODW (GJSx), 2020 WL 468909, at *2 (C.D. Cal. Jan. 27, 2020). 28 These decisions are unpersuasive. Yegan and Nevarez are contrary to Fritsch, in which the 7 United States District Court Northern District of California 1 Ninth Circuit expressly rejected arguments “that future attorneys’ fees should not be included in 2 the amount in controversy because they are inherently speculative and can be avoided by the 3 defendant’s decision to settle an action quickly.” Fritsch, 899 F.3d at 795. Chavez and other 4 cases upon which the Coxes rely are contrary to numerous Ninth Circuit and district court cases 5 holding that attorneys’ fees are included in the amount in controversy in MMWA and Song- 6 Beverly suits. See, e.g., Schneider v. Ford Motor Co., 756 F. App’x 699, 701 n.4 (9th Cir. 2018) 7 (attorneys’ fees properly considered part of amount in controversy in Song-Beverly Act case); 8 Park v. Jaguar Land Rover N. Am., LLC, No. 20-CV-00242-BAS-MSB, 2020 WL 3567275, at *4 9 n.2 (S.D. Cal. July 1, 2020) (“The Ninth Circuit and many California district courts have indicated 10 that the amount in controversy may include attorney’s fees in Song-Beverly Act cases.”); Olivas v. 11 Cutter CJD, No. CV 19-00454 DKW-RT, 2020 WL 4332894, at *5 (D. Haw. Apr. 16, 2020), 12 report and recommendation adopted, No. CV 19-00454 DKW-RT, 2020 WL 4343665 (D. Haw. 13 July 27, 2020) (“Ninth Circuit precedent establishes that attorneys’ fees are included in the 14 calculation of the amount in controversy for MMWA cases.”); Vallejo v. Gen. Motors, LLC, No. 15 CV 19-10631-DMG (ASx), 2020 WL 1164949, at *3 (C.D. Cal. Mar. 11, 2020) (“Removing 16 defendants may include potential future attorneys’ fees in the amount in controversy 17 calculation.”). This Court thus turns to the question of whether Kia has shown that the attorneys’ 18 fees claimed by the Coxes exceed the jurisdictional threshold. 19 A removing defendant must “prove that the amount in controversy (including attorneys’ 20 fees) exceeds the jurisdictional threshold by a preponderance of the evidence.” Fritsch, 899 F.3d 21 at 795. The defendant must “make this showing with summary-judgment-type evidence.” Id. Kia 22 has not satisfied its burden here. Kia contends that “common sense would dictate that Plaintiffs 23 have already incurred a substantial amount of attorney’s fees.” Opp. at 9, ECF 14. However, Kia 24 does not submit any evidence in support of this contention. Kia cites to a “Hugret Declaration” 25 that Kia asserts was attached to the Notice of Removal. As an initial matter, Kia’s citation to a 26 declaration that was not included in the briefing on the present motion violates this Court’s 27 Standing Order Re Civil Cases, which prohibits incorporation by reference and mandates that 28 “[a]ll factual and legal bases for a party’s position with respect to a motion must be presented in 8 1 the briefing on that motion.” Standing Order Re Civil Cases ¶ 4.D. Moreover, the Court cannot 2 locate a “Hugret Declaration” filed with either the Notice of Removal or the opposition to the 3 present motion. The Coxes likewise could not locate the declaration. See Reply at 5 (referencing 4 “a non-existent ‘Hugret’ Declaration), ECF 22. Kia has failed to establish that the Coxes’ claimed attorneys’ fees satisfy the jurisdictional 5 6 threshold. 7 C. 8 In conclusion, Kia has failed to establish that the $50,000 jurisdictional threshold for 9 10 United States District Court Northern District of California 11 12 MMWA cases is satisfied here, either by reference to the face of the SAC or by a preponderance of the evidence. The Coxes’ motion to remand therefore is GRANTED. IV. ORDER (1) (2) The Clerk SHALL transmit the relevant documents to the Santa Clara County Superior Court and close this Court’s file; and 15 16 Plaintiffs’ motion to remand is GRANTED, and this case IS REMANDED to the Santa Clara County Superior Court; 13 14 Conclusion (3) This order terminates ECF 13. 17 18 19 20 Dated: September 30, 2020 ______________________________________ BETH LABSON FREEMAN United States District Judge 21 22 23 24 25 26 27 28 9
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
