Gonzales v. CarMax Auto Superstores LLC, No. 14-56842 (9th Cir. 2016)Annotate this Case
Plaintiff filed suit against CarMax, alleging violations of four California consumer protection laws: (1) the Consumer Legal Remedies Act (CLRA); (2) the Song-Beverly Consumer Warranty Act (Song-Beverly); (3) common law fraud and deceit; and (4) the Unfair Competition Law (UCL). Plaintiff's claims under the CLRA and UCL were both based on CarMax’s alleged violation of California Vehicle Code section 11713.18(a)(6), which requires a car dealer to provide consumers with a “completed inspection report” prior to the sale of any “certified” vehicle. The district court dismissed the fraud and Song-Beverly claims and granted CarMax summary judgment on his CLRA and UCL claims. The court concluded that the district court did not err in exercising diversity-based subject matter jurisdiction over his case. The court concluded that when the potential cost of complying with injunctive relief is considered along with plaintiff's claims for compensatory damages and punitive damages, the district court did not err in finding that the jurisdictional amount-in-controversy requirement was satisfied. The court held that a report, like the ones in this case, that fails to indicate the results of an inspection in a manner that conveys the condition of individual car components to a buyer is not a "completed inspection report" under California law. The court noted that if CarMax’s generic, and ultimately uninformative, list of components inspected were considered a “completed inspection report,” section 11713.18(a)(6)’s effectiveness in promoting transparency in the sale of certified cars would be substantially diminished. Therefore, the court reversed and remanded the district court's grant of summary judgment to CarMax on the CLRA and UCL claims.