Shahin Bastani v. Mercedes Benz USA, LLC

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No. SA CV 21-00911-DOC-ADS Date: September 7, 2021

Title: SHAHIN BASTANI V. MERCEDES BENZ USA, LLC

PRESENT:

THE HONORABLE DAVID O. CARTER, JUDGE

Karlen Dubon Not Present

Courtroom Clerk Court Reporter

ATTORNEYS PRESENT FOR ATTORNEYS PRESENT FOR

PLAINTIFF: DEFENDANT:

None Present None Present

PROCEEDINGS (IN CHAMBERS): ORDER REMANDING CASE TO

STATE COURT SUA SPONTE

On its own motion and having considered the Notice of Removal (Dkt. 1) the

Court hereby REMANDS this case to the Superior Court of California, County of

Orange.

I. Background

A. Facts

The following facts are drawn from Plaintiff Shahin Bastani’s Complaint

(“Compl.”) (Dkt. 1-1). This action concerns Plaintiff’s purchase of a vehicle

manufactured by Defendant Mercedes-Benz USA, LLC (“Defendant”). Compl. ¶¶ 12, 13.

Plaintiff alleges that the vehicle contained or developed numerous defects and continued

to exhibit such defects after Plaintiff returned the vehicle to the authorized repair facility

for repairs. Id. ¶ 14-18. Plaintiff alleges that Defendant has continuously failed to make

the vehicle conform to the applicable warranties. Id. ¶ 17. Plaintiff brings claims under

the Song-Beverly Consumer Warranty Act and Magnuson-Moss Warranty Act seeking

actual damages, civil penalties, costs and expenses, attorneys’ fees, recision of the

contract and restitution of consideration, and prejudgment interest. Id. at 5-7.

CIVIL MINUTES – GENERAL

Case No. SA CV 21-00911-DOC-ADS Date: September 7, 2021

Page 2

B. Procedural History

Plaintiff originally filed suit in the Superior Court of California, County of Orange

County. See generally Compl. (Dkt. 1-1). On May 17, 2021, Defendant removed the

action to this Court, asserting jurisdiction based on federal question and diversity. Notice

of Removal (Dkt. 1).

II. Legal Standard

“If at any time before final judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Removal of a case

from state court to federal court is governed by 28 U.S.C. § 1441, which provides in

relevant part that “any civil action brought in a State court of which the district courts of

the United States have original jurisdiction, may be removed . . . to the district court of

the United States for the district and division embracing the place where such action is

pending.” 28 U.S.C. § 1441. This statute “is strictly construed against removal

jurisdiction,” and the party seeking removal “bears the burden of establishing federal

jurisdiction.” Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988)

(emphasis added) (citations omitted).

Federal diversity jurisdiction requires that the parties be citizens of different states

and that the amount in controversy exceed $75,000. 28 U.S.C. § 1332(a). For diversity

jurisdiction purposes, a corporation is “deemed to be a citizen of every State and foreign

state by which it has been incorporated and of the State or foreign state where it has its

principal place of business.” 28 U.S.C. § 1332(c)(1). The presence of any single plaintiff

from the same state as any single defendant destroys “complete diversity” and strips the

federal courts of original jurisdiction over the matter. Exxon Mobil Corp. v. Allapattah

Servs., Inc., 545 U.S. 546, 553 (2005).

Generally, a removing defendant must prove by a preponderance of the evidence

that the amount in controversy satisfies the jurisdictional threshold. Guglielmino v.

McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2008). If the complaint affirmatively

alleges an amount in controversy greater than $75,000, the jurisdictional requirement is

“presumptively satisfied.” Id. A plaintiff who then tries to defeat removal must prove to a

“legal certainty” that a recovery of more than $75,000 is impossible. St. Paul Mercury

Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); Crum v. Circus Enters., 231

F.3d 1129, 1131 (9th Cir. 2000). This framework applies equally to situations where the

complaint leaves the amount in controversy unclear or ambiguous. See Gaus v. Miles,

CIVIL MINUTES – GENERAL

Case No. SA CV 21-00911-DOC-ADS Date: September 7, 2021

Page 3

Inc., 980 F.2d 564, 567 (9th Cir. 1992); Sanchez v. Monumental Life Ins. Co., 102 F.3d

398, 403-04 (9th Cir. 1996).

A removing defendant “may not meet [its] burden by simply reciting some

‘magical incantation’ to the effect that ‘the matter in controversy exceeds the sum of

[$75,000],’ but instead, must set forth in the removal petition the underlying facts

supporting its assertion that the amount in controversy exceeds [$75,000].” Richmond v.

Allstate Ins. Co., 897 F. Supp. 447, 450 (S.D. Cal. 1995) (quoting Gaus v. Miles, Inc.,

980 F.2d 564, 567 (9th Cir. 1992)). If the plaintiff has not clearly or unambiguously

alleged $75,000 in its complaint or has affirmatively alleged an amount less than $75,000

in its complaint, the burden lies with the defendant to show by a preponderance of the

evidence that the jurisdictional minimum is satisfied. Geographic Expeditions, Inc. v.

Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1106-07 (9th Cir. 2010); Guglielmino,

506 F.3d at 699.

While the defendant must “set forth the underlying facts supporting its assertion

that the amount in controversy exceeds the statutory minimum,” the standard is not so

taxing so as to require the defendant to “research, state, and prove the plaintiff’s claims

for damages.” Coleman v. Estes Express Lines, Inc., 730 F. Supp. 2d 1141, 1148 (C.D.

Cal. 2010) (emphases added). In short, the defendant must show that it is “more likely

than not” that the amount in controversy exceeds the statutory minimum. Id. Summary

judgment-type evidence may be used to substantiate this showing. Matheson v.

Progressive Specialty Ins. Co., 319 F.3d 1089, 1090–91 (9th Cir. 2003); Singer v. State

Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997). For example, defendants

may make mathematical calculations using reasonable averages of hourly, monthly, and

annual incomes of comparable employees when assessing the amount in controversy in a

wrongful termination suit. Coleman, 730 F. Supp. 2d. at 1148–49.

Federal district courts have original jurisdiction in actions “arising under the

Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. An action "arises

under" the federal law within the meaning of 28 U.S.C. § 1331 if: (1) federal law creates

the cause of action, or (2) the Plaintiff right to relief necessarily depends on resolution of

a substantial question of federal law. Franchise Tax Board v. Construction Laborers

Vacation Trust, 463 U.S. l, 27-28 (1983). 15 U.S.C. § 2310(d)(l)(B) of the Magnuson-

Moss Warranty Act states in part that a consumer who is damaged by a warrantor's

failure to comply with a warranty “may bring suit for damages and other legal and

equitable relief in an appropriate district court of the United States, subject to paragraph

(3) of this subsection.” Paragraph (3) goes on to state that “[n]o claim shall be cognizable

CIVIL MINUTES – GENERAL

Case No. SA CV 21-00911-DOC-ADS Date: September 7, 2021

Page 4

in a suit brought under paragraph (l)(B) of this subsection ... if the amount in controversy

is less than the sum or value of $50,000.00 (exclusive of interest and costs) computed on

the basis of all claims to be determined in this suit ...” 15 U.S.C. § 2310(d)(3)(B).

If the court lacks subject matter jurisdiction, any action it takes is ultra vires and

void. See Gonzalez v. Crosby, 545 U.S. 524, 534 (2005); Steel Co. v. Citizens for a Better

Env’t, 523 U.S. 83, 94, 101–02 (1998). The lack of subject matter jurisdiction may be

raised at any time by either the parties or the court. Fed. R. Civ. P. 12(h)(3). If subject

matter jurisdiction is found to be lacking, the court must dismiss the action, id., or

remand pursuant to 28 U.S.C. § 1447(c). A Court may raise the question of subject matter

jurisdiction sua sponte. See Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002).

III. Discussion

Defendant argues that this Court has federal question and diversity jurisdiction in

this action. Notice of Removal ¶¶ 7, 11. The Court disagrees.

The Court finds that Defendant has not shown by a preponderance of the evidence

that the amount in controversy exceeds $50,000 for federal question purposes, nor does it

exceed $75,000 for diversity purposes. Defendant argues that Plaintiff’s actual damages,

coupled with the civil penalties Plaintiffs seek, is greater than $75,000. Notice of

Removal ¶ 10. Defendant asserts that Plaintiff’s actual damages amount to the lease price

of the Plaintiff’s vehicle—a total of $26,103.35. Notice of Removal ¶ 8. Defendant

further alleges that the awarded damages could exceed $75,000 based on civil penalties

and reasonable attorneys’ fees. Id. The Court will not include speculative civil penalties

or attorneys’ fees to meet the amount in controversy requirement. See Galt G/S v. JSS

Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998) (“We hold that where an underlying

statute authorizes an award of attorneys’ fees, either with mandatory or discretionary

language, such fees may be included in the amount in controversy.”) (emphasis added).

Thus, the Court finds that it lacks diversity jurisdiction and federal question jurisdiction

over this matter.

When remanding a case, a court may, in its discretion, “require payment of just

costs and any actual expenses, including attorney fees, incurred as a result of the

removal.” 28 U.S.C. § 1447(c); see also Jordan v. Nationstar Mortg. LLC, 781 F.3d

1178, 1184 (9th Cir. 2015). Typically, a court may only award fees and costs when “the

removing party lacked an objectively reasonable basis for seeking removal.” Id. (quoting

Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). In making this

determination, courts should look at whether the removing party’s arguments are “clearly

CIVIL MINUTES – GENERAL

Case No. SA CV 21-00911-DOC-ADS Date: September 7, 2021

Page 5

foreclosed” by the relevant case law. Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062,

1066-67 (9th Cir. 2008). The Ninth Circuit has further clarified that “removal is not

objectively unreasonable solely because the removing party’s arguments lack merit,” id.

at 1065, though a court need not find the removing party acted in bad faith before

awarding fees under § 1447(c), Moore v. Permanente Med. Grp., 981 F.2d 443, 446 (9th

Cir. 1992).

Here, while the Court finds that removal was improper, the Court concludes that it

was not so inconceivable as to meet the “objectively unreasonable” standard. As a result,

the Court declines to award Plaintiffs attorneys’ fees.

IV. Disposition

For the reasons set forth above, the Court hereby REMANDS this case to the

Superior Court of Orange County, California.

The Clerk shall serve this minute order on the parties.

MINUTES FORM 11 Initials of Deputy Clerk: kdu

CIVIL-GEN