Laky v. Ford Motor Company, No. 5:2019cv05546 - Document 25 (N.D. Cal. 2021)
Court Description: Order Granting 17 Motion to Remand. Signed by Judge Edward J. Davila on 01/26/2021. (ejdlc2S, COURT STAFF) (Filed on 1/26/2021)
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Laky v. Ford Motor Company Doc. 25 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 SANDRA LAKY, Case No. 5:19-cv-05546-EJD Plaintiff, 9 ORDER GRANTING MOTION TO REMAND v. 10 11 Re: Dkt. No. 17 FORD MOTOR COMPANY, United States District Court Northern District of California Defendant. 12 Before the Court is a motion to remand by Plaintiff Sandra Laky (“Laky”). Mot. to 13 14 Remand, Dkt. No. 17. Laky alleges that Defendant Ford Motor Company’s (“Ford”) Notice of 15 Removal failed to meet the “burden of establishing that the amount in controversy satisfied the 16 jurisdictional threshold of $50,000” under the Magnuson-Moss Warranty Act or prove fraudulent 17 joinder of co-defendant Ford of Escondido (“Escondido”). Id. at 1. Ford did not file an opposition 18 to Laky’s motion to remand. Pursuant to Civ. L.R. 7-1(b), the Court has determined that this 19 motion is appropriate for decision without oral argument. For the reasons stated below, the Court 20 GRANTS Plaintiff’s motion to remand. 21 22 I. BACKGROUND Plaintiff Sandra Laky (“Laky”) is a resident of California. Complaint for Violation of 23 Statutory Obligations (“Compl.”), Dkt. No. 1-2, Ex. B ¶ 2. In June 2015, Laky purchased a 2010 24 Mercury Mariner vehicle (“Vehicle”), and received an express written warranty. Id. ¶¶ 8-9. Laky 25 alleges the Vehicle contained or developed defects in its engine, transmission, axle seat, and clutch 26 among other areas of the Vehicle. Id. ¶ 10. Plaintiff brought the Vehicle to defendant Ford of 27 Escondido, for service and repair but they were unable to have the Vehicle repaired in accordance 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 1 Dockets.Justia.com 1 with industry standards. See ¶¶ 37-41. On July 24, 2019, Laky filed suit in Santa Clara Superior Court against Defendants setting 2 3 forth seven causes of action based on the California Song-Beverly Consumer Warranty Act 4 (“Song-Beverly”), Cal. Civ. Code §§ 1790-1795; Magnuson-Moss Warranty Act (“MMWA”), 15 5 U.S.C. § 2301 et seq.; and negligent repair. On September 3, 2019, Ford filed a notice of removal 6 stating that this Court has federal question jurisdiction pursuant to the MMWA, supplemental 7 jurisdiction over related state claims, and diversity jurisdiction due to the joinder. See generally 8 Not. of Removal, Dkt. No. 1. On October 14, 2020, the Court granted a joint stipulation agreed to by the parties which United States District Court Northern District of California 9 10 dismissed all of Laky’s Song-Beverly Consumer Warranty Act claims. See Dkt. Nos. 16, 18. 11 Thus, after the stipulation, Laky asserts two causes of action: one against Ford for violation of the 12 MMWA, and one against Escondido for negligent repair. Compl. ¶¶ 37-54. Plaintiff seeks the 13 following monetary relief in her amended complaint: actual damages, restitution, consequential 14 and incidental damages, any remedies pursuant to MMWA, prejudgment interest at the legal rate, 15 and any other such relief the Court may deem proper. Id. at 10. In total, Laky alleges she suffered 16 damages “in a sum to be proven at trial in an amount that is not less than $25,001.00.” Id. ¶ 11. 17 On October 13, 2020, Laky filed a motion to remand alleging that Ford has failed to meet 18 its burden in establishing that the MMWA amount in controversy of $50,000 has been met or that 19 co-defendant Escondido was fraudulently joined to defeat diversity of citizenship. See Mot. to 20 Remand at 4. 21 22 II. LEGAL STANDARD If a federal court has subject matter jurisdiction over a civil case filed in state court, the suit 23 may be removed to federal court by the defendant. 28 U.S.C. § 1441(a). “A defendant may 24 remove an action to federal court based on federal question jurisdiction or diversity jurisdiction.” 25 Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). “Federal jurisdiction exists 26 only when a federal question is presented on the face of the plaintiff’s properly pleaded 27 complaint.” California ex rel. Sacramento Metro. Air Quality Mgmt. Dist. v. United States, 215 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 2 United States District Court Northern District of California 1 F.3d 1005, 1014 (9th Cir. 2000). Diversity jurisdiction exists when the suit is between “citizens of 2 different States” and “where the matter in controversy exceeds the sum or value of $75,000, 3 exclusive of interests or costs.” 28 U.S.C. § 1332. “If at any time before final judgment it appears 4 that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 5 1447(c). 6 The removal statute “is strictly construed against removal jurisdiction, and the burden of 7 establishing federal jurisdiction falls to the party invoking the statute.” Limon-Gonzalez v. Kia 8 Motors Am., Inc., CV 20-4381 PA (JPRX), 2020 WL 3790838, at *1 (C.D. Cal. July 7, 2020) 9 (citing California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 2004)). “Federal 10 jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” 11 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 12 For removals based on diversity jurisdiction, the defendant must prove by a preponderance 13 of the evidence that the amount in controversy exceeds $75,000. See Chavez v. JPMorgan Chase 14 & Co., 888 F.3d 413, 416 (9th Cir. 2018). The Court may look to the complaint, notice of 15 removal, “as well as summary-judgment-type evidence relevant to the amount in controversy.” Id. 16 Similarly, if the defendant seeks removal based on diversity where no complete diversity exists, 17 the defendant must prove the fraudulent joinder exception to the requirement for complete 18 diversity. See Hunter, 582 F.3d at 1043 (“one exception to the requirement for complete diversity 19 is where a non-diverse defendant has been fraudulently joined.”) (internal quotations omitted). 20 Fraudulently joined defendants who destroy diversity of citizenship do not defeat removal. 21 McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). “There is a general 22 presumption against fraudulent joinder and the defendant’s burden of demonstrating that a joinder 23 is fraudulent is a heavy one.” Beutel v. Wells Fargo Bank N.A., No. 18-CV-03686-LHK, 2018 24 WL 3084660, at *2 (N.D. Cal. June 22, 2018) (quoting Hunter, 582 F.3d at 1046) (internal 25 quotations omitted). Federal courts must find the joinder proper and remand the case to the state 26 court “if there is a possibility that a state court would find the complaint states a cause of action 27 against any of the resident defendants.” McAdams v. Ford Motor Co., No. 18-CV-07485-LHK, 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 3 United States District Court Northern District of California 1 2019 WL 2378397, at *4 (N.D. Cal. June 5, 2019) (quoting Grancare, LLC v. Thrower by and 2 through Mills, 889 F.3d 534, 548 (9th Cir. 2018)). Courts “may look beyond the pleadings to 3 evidence proffered by the parties” to resolve fraudulent joinder claims. Id.; see also Morris v. 4 Princess Cruises, Inc., 236 F.3d 1061, 1068 (9th Cir. 2001) (considering “summary judgment-type 5 evidence such as affidavits and deposition testimony”). 6 III. DISCUSSION 7 A. 8 The MMWA allows “a consumer who is damaged by the failure of a supplier, warrantor, 9 or service contract to comply with any obligation under this chapter, or under a written warranty, 10 implied warranty, or service contract” to bring a “suit for damages and legal and equitable relief” 11 in “any court of competent jurisdiction in any State.” 15 U.S.C. § 2310(d)(1). Claims may not be 12 brought in federal court if the amount in controversy “of any individual claim is less than the sum 13 or value of $25; or . . . less than the sum or value of $50,000 (exclusive of interests and costs) 14 computed on the basis of all claims to be determined in this suit.” 15 U.S.C. § 2310(d)(3). It 15 follows that federal courts will have subject matter jurisdiction over Laky’s claims if the total 16 amount in controversy is greater than or equal to $50,000. See id.; 28 U.S.C. § 1331; 28 U.S.C. § 17 1367. 18 Federal Question Jurisdiction 28 U.S.C. § 1331 The MMWA does not “indicate that the amount in controversy for [the MMWA] is 19 assessed any differently than the diversity jurisdiction requirement found in 28 U.S.C. § 1332.” 20 Limon-Gonzalez, 2020 WL 3790838, at *2. The amount in controversy includes actual and 21 punitive damages. See Bell v. Preferred Life Assurance Soc’y, 320 U.S. 238, 240 (1943). In the 22 Ninth Circuit, “a court must include future attorneys’ fees recoverable by statute or contract when 23 assessing whether the amount-in-controversy requirement is met.” Fritsch v. Swift Transportation 24 Co. of Arizona, LLC, 899 F.3d 785, 794 (9th Cir. 2018). 25 Ford has not demonstrated that the amount in controversy meets the $50,000 required for 26 federal question jurisdiction. As shown by Laky, her alleged damages of “a sum to be proven at 27 trial in an amount that is not less than $25,001.00” are an estimate only. Compl. ¶ 11. Several 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 4 United States District Court Northern District of California 1 district courts in this Circuit have found that a plaintiff does not satisfy the amount in controversy 2 when alleging damages using speculative language. See, e.g., Limon-Gonzalez, 2020 WL 3 3790838, at *2 (granting motion to remand and finding plaintiff’s allegations of “damages in an 4 amount that is not less than $25,001.00” too speculative) (emphasis added); Steeg v. Ford Motor 5 Co., No. 19-CV-05833-LHK, 2020 WL 2121508, at *3 (N.D. Cal. May 5, 2020) (granting motion 6 to remand by reasoning that “Plaintiffs specif[ied] a monetary amount only once, when they 7 allege[d] that ‘Plaintiffs suffered damages . . . in an amount not less than $25,000.01.’”) (citation 8 omitted) (emphasis added); Edwards v. Ford Motor Co., No. CV 16-05852 BRO (PLAX), 2016 9 WL 6583585, at *4 (C.D. Cal. Nov. 4, 2016) (granting motion to remand where Plaintiff’s 10 complaint states that “‘Plaintiff suffered damages in a sum to be proven at trial’ of at least 11 $25,000.”) (citation omitted) (emphasis added). Courts have also granted a motion to remand 12 where “[i]n the absence of any contradictory allegations in the Complaint, the Court accepts 13 Plaintiff’s explanation that the $25,001.00 figure represents the combined total of actual damages 14 and civil penalties.” Feichtmann v. FCA US LLC, No. 5:20-CV-01790-EJD, 2020 WL 3277479, 15 at *3 (N.D. Cal. June 18, 2020). This Court finds Laky’s alleged damages are speculative because 16 the amended complaint references damages only once, uses ambiguous language, and only claims 17 a total amount not less than $ 25,001. See Compl. ¶ 11 (“Plaintiff suffered damages in a sum to be 18 proven at trial in an amount that is not less than $25,001.00”) (emphasis added). 19 Second, Laky no longer seeks civil penalties following the stipulated dismissal of her 20 Song-Beverly Act claims. See Dkt. No. 18. This Court has found “where a plaintiff expressly 21 alleges potential entitlement to the maximum civil penalty under the Song Beverly Act . . . the 22 amount in controversy requirement likely will be satisfied.” Pestarino v. Ford Motor Co., No. 19- 23 cv-07890-BLF, 2020 WL 1904590, at *3 (N.D. Cal. Apr. 17, 2020). In Pestarino, the Court found 24 a higher $75,000 amount in controversy requirement to be satisfied solely on alleging actual 25 damages exceeding $25,000, a two times civil penalty, and attorneys’ fees. Id. Laky’s case can be 26 distinguished because Plaintiff no longer asserts a claim under the Song-Beverly Act. This raises 27 additional doubt as to whether Laky alleges damages that would meet the $50,000 jurisdictional 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 5 1 requirement. 2 Lastly, Ford does not challenge Laky’s amount in controversy. Ford did not file an 3 opposition to the motion to remand. As a result, Ford does not address the amount in controversy 4 after the stipulated dismissal of Laky’s Song-Beverly Act claims. Ford’s assertion that “the 5 amount in controversy in fact exceeds $50,000” and the “Complaint on its face seeks recovery of 6 more than $75,000” relies on Laky’s prior claims of civil penalties and attorneys’ fees. Not. of 7 Removal ¶ 21. This Court finds Ford’s claim regarding the amount in controversy inadequate to 8 satisfy the MMWA’s $50,000 amount in controversy requirement. 9 B. Since the Court could not conclusively establish that Laky’s claim satisfies the MMWA’s 10 United States District Court Northern District of California Diversity Jurisdiction 28 U.S.C. § 1332 11 $50,000 amount in controversy requirement, Defendants necessarily cannot prove by a 12 preponderance of the evidence that the amount in controversy is over $75,000 to satisfy the 13 requirement for diversity jurisdiction. Accordingly, Ford’s assertion of diversity jurisdiction by 14 fraudulent joinder does not need to be addressed. 15 IV. 16 CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiff’s motion to remand. Accordingly, 17 the Court REMANDS this case. The Clerk of the Court shall remand this action to the Superior 18 Court of California for the County of Santa Clara and close the file. 19 20 21 22 IT IS SO ORDERED. Dated: January 26, 2021 ______________________________________ EDWARD J. DAVILA United States District Judge 23 24 25 26 27 28 Case No.: 5:19-cv-05546-EJD ORDER GRANTING MOTION TO REMAND 6
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