“[A] court must 9 include future attorneys’ fees recoverable by statute or contract when assessing whether the 10 amount-in-controversy requirement is met.”
How later courts described this case
- “[A] court must 9 include future attorneys’ fees recoverable by statute or contract when assessing whether the 10 amount-in-controversy requirement is met.”
- “The defendant bears the burden of establishing that removal is 15 proper.”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
10
11 JASBIR SINGH, et al., No. 2:23-cv-01840-DAD-AC
12 Plaintiffs,
13 v. ORDER DENYING PLAINTIFFS’ MOTION
TO REMAND
14 HYUNDAI MOTOR AMERICA, et al.,
(Doc. No. 6)
15 Defendants.
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17 This matter is before the court on plaintiffs’ motion to remand this action to the Solano
18 County Superior Court. (Doc. No. 6.) Having reviewed the motion and the defendants’
19 opposition thereto, the court finds the pending motion suitable for decision on the papers. For the
20 reasons explained below, the court will deny plaintiffs’ motion to remand.
21 BACKGROUND
22 On March 29, 2023, plaintiffs filed this action against defendants Hyundai Motor America
23 (“Hyundai”), Hyundai of Vacaville, and Does 1 through 50, inclusive, in the Solano County
24 Superior Court. (Doc. No. 1-2 at 1.) In their complaint, plaintiffs allege that on or around May
25 14, 2022, they purchased a 2022 Hyundai Sonata (the “subject vehicle”) that was manufactured or
26 distributed by Hyundai Motor America from the Hyundai of Vacaville dealership in Vacaville,
27 California, and that Hyundai gave them an express warranty in connection with that purchase.
28 (Id. at 4.) Plaintiffs allege that within a month of their purchase, the vehicle experienced shifter
1 system and park malfunctions. (Id. at 5.) Plaintiffs presented the vehicle to Hyundai’s authorized
2 repair centers on three occasions in the hopes of repairing the vehicle, and they contacted
3 Hyundai Consumer Affairs about the malfunction. (Id. at 6, 81.) According to the complaint,
4 Hyundai failed to repair the vehicle and refused to buy it back pursuant to California’s lemon law.
5 (Id. at 6, 94). In their complaint, plaintiffs assert breach of express and implied warranty claims
6 under California’s Song-Beverly Consumer Warranty Act and the federal Magnuson-Moss
7 Warranty Act (“MMWA”) against defendants. (Id. at 6–10.)
8 On August 28, 2023, defendant Hyundai removed this action to this court pursuant to
9 28 U.S.C. §§ 1331, 1441, and 1446, on the grounds that federal question jurisdiction exists.
10 (Doc. No. 1.) Specifically, plaintiffs’ complaint includes two MMWA claims, which seek relief
11 pursuant to 15 U.S.C. § 2301, a federal statute, and Hyundai alleges in its notice of removal that
12 the amount in controversy exceeds the $50,000 jurisdictional threshold required by the MMWA
13 for federal jurisdiction to adhere. (Id. at 3); see 15 U.S.C. §2310(d)(3)(B) (permitting federal
14 jurisdiction as long as the amount in controversy is $50,000, among other requirements).
15 Additionally, Hyundai contends that this court has supplemental jurisdiction over plaintiffs’
16 remaining state law claims. (Doc. No 1 at 6–7.)
17 On October 3, 2023, plaintiffs filed the pending motion to remand this action to the
18 Solano County Superior Court on the grounds that Hyundai had failed to establish that there is a
19 federal question at issue in this case and that the amount in controversy exceeds $50,000. (Doc.
20 No. 6 at 2.)1 Pursuant to 28 U.S.C. § 1447(c), plaintiffs also requested that the court award them
21 attorneys’ fees and expenses incurred as a result of Hyundai’s allegedly improper removal of this
22 /////
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1 Plaintiffs failed to properly notice their motion for a hearing as required by the Local Rules and
24 the undersigned’s Standing Order (Doc. No. 5-1). The court issued an order identifying
plaintiffs’ several failures in this regard and directing plaintiffs to file an amended notice of
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motion to cure the many deficiencies. (Doc. No. 8.) Despite this guidance, plaintiffs’ amended
notice was still improper and again failed to comply with the court’s requirements, which led the
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court to direct plaintiffs to file a further amended notice of motion to properly set the pending
27 motion for a hearing. (Doc. Nos. 9, 10.) Plaintiffs wholly ignored the court’s order and did not
file an amended notice or otherwise communicate with the court. Plaintiffs are warned that such
28 disregard for the court’s orders is unacceptable and will not be tolerated.
1 action to federal court. (Id. at 9.) On October 17, 2023, Hyundai filed an opposition to plaintiffs’
2 motion to remand. (Doc. No. 11.) Plaintiffs did not file a reply thereto.
3 LEGAL STANDARD
4 A suit filed in state court may be removed to federal court if the federal court would have
5 had original jurisdiction over the suit. 28 U.S.C. § 1441(a). Removal is proper when a case
6 originally filed in state court presents a federal question or where there is diversity of citizenship
7 among the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331,
8 1332(a).
9 “If at any time before final judgment it appears that the district court lacks subject matter
10 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “The removal statute is strictly
11 construed against removal jurisdiction, and the burden of establishing federal jurisdiction falls to
12 the party invoking the statute.” Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir.
13 2004) (citation omitted); see also Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d
14 1083, 1087 (9th Cir. 2009) (“The defendant bears the burden of establishing that removal is
15 proper.”). If there is any doubt as to the right of removal, a federal court must reject jurisdiction
16 and remand the case to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089,
17 1090 (9th Cir. 2003); see also Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1118 (9th Cir. 2004).
18 A party’s notice of removal must contain “a short and plain statement of the grounds for
19 removal.” 28 U.S.C. § 1446(a). “By design, § 1446(a) tracks the general pleading requirement
20 stated in Rule 8(a) of the Federal Rules of Civil Procedure,” and a “statement ‘short and plain’
21 need not contain evidentiary submissions.” Dart Cherokee Basin Operating Co., LLC v. Owens,
22 574 U.S. 81, 83–84 (2014); see also Ramirez-Duenas v. VF Outdoor, LLC, No. 1:17-cv-0161-
23 AWI-SAB, 2017 WL 1437595, at *2 (E.D. Cal. Apr. 41, 2017) (“The notice of removal may rely
24 on the allegations of the complaint and need not be accompanied by any extrinsic evidence.”).
25 A defendant’s initial burden in establishing the amount in controversy for removal
26 purposes is minimal: even a “plausible allegation that the amount in controversy exceeds the
27 jurisdictional threshold” can suffice. Dart Cherokee, 574 U.S. at 89 (quoting 28 U.S.C.
28 § 1446(a)). Where it is “unclear or ambiguous from the face of a state-court complaint whether
1 the requisite amount in controversy is pled, the removing defendant bears the burden of
2 establishing, by a preponderance of the evidence, that the amount in controversy exceeds the
3 jurisdictional threshold.” Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 793 (9th Cir.
4 2018) (citing Urbino v. Orkin Services of Cal., Inc., 726 F.3d 1118, 1121–22 (9th Cir. 2013)). In
5 determining the amount in controversy, courts may “consider allegations in the removal petition,
6 as well as ‘summary-judgment-type evidence relevant to the amount in controversy at the time of
7 removal.’” Id. (citing Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005)). The court
8 “must assume that the allegations in the complaint are true and that a jury will return a verdict for
9 plaintiffs on all claims alleged.” Page v. Luxottica Retail N. Am., No. 2:13-cv-01333-MCE-KJN,
10 2015 WL 966201, at *2 (E.D. Cal. Mar. 4, 2015) (citing Korn v. Polo Ralph Lauren Corp., 536 F.
11 Supp. 2d 1199, 1205 (E.D. Cal. 2008)); accord Campbell v. Vitran Express, Inc., 471 F. App’x
12 646, 648 (9th Cir. 2012).2 District courts may consider requests for treble damages, attorneys’
13 fees, and punitive damages when determining the amount in controversy. Chabner v. United of
14 Omaha Life Ins. Co., 225 F.3d 1042, 1046 n.3 (9th Cir. 2000).
15 ANALYSIS
16 In the pending motion to remand, plaintiffs contend that Hyundai improperly removed this
17 action because Hyundai failed to satisfy its burden to establish federal subject matter jurisdiction.
18 (Doc. No. 6 at 3.) Plaintiffs argue both that Hyundai has failed to meet the federal question
19 requirement and has failed to show that the amount in controversy exceeds $50,000. (Id. at 5–7.)
20 A. Federal Cause of Action
21 Under 28 U.S.C. § 1331, district courts have “original jurisdiction of all civil actions
22 arising under the Constitution, laws, or treaties of the United States.” An action “arises under”
23 federal law pursuant to § 1331 if the cause of action is (1) created by federal law, or
24 (2) necessarily requires resolution of a substantial question of federal law. Grable & Sons Metal
25 Prods., Inc. v. Darue Eng’g & Mfg. 545 U.S. 308, 314 (2005); Empire Healthchoice Assurance,
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27 2 Citation to this unpublished Ninth Circuit opinion is appropriate pursuant to Ninth Circuit Rule
36-3(b).
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1 Inc. v. McVeigh, 547 U.S. 677, 699 (2006). Under the “well-pleaded complaint” rule, courts look
2 to what “necessarily appears in the plaintiff’s statement of his own claim in the bill or declaration,
3 unaided by anything in anticipation of avoidance of defenses which it is thought the defendant
4 may interpose.” California v. United States, 215 F.3d 1005, 1014 (9th Cir. 2000).
5 The Magnuson-Moss Warranty Act is a law of the United States, and as such, claims filed
6 under it may trigger federal jurisdiction. Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912,
7 917 (9th Cir. 2005). Consumers may bring suit under the MMWA when “damaged by the failure
8 of a supplier, warrantor, or service contractor to comply with any obligation under this [Act], or
9 under a written warranty, implied warranty, or service contract.” Romo v. FFG Ins. Co., 397 F.
10 Supp. 2d 1237, 1239 (C.D. Cal. 2005) (citing 15 U.S.C. § 2310(d)(1)). A district court may only
11 have jurisdiction “[i]f the amount in controversy is [equal to or more] than the sum or value of
12 $50,000 (exclusive of interests and costs) computed on the basis of all claims” in the suit, among
13 other qualifiers not at issue here. 15 U.S.C. § 2310(d)(3).
14 In their motion to remand, plaintiffs argue that the MMWA “does not create a new federal
15 cause of action for breach of warranty claims” because it provides “a state forum for consumers
16 to bring claims under federal warranty laws.” (Doc. No. 6 at 6.) In its opposition, Hyundai does
17 not dispute that the MMWA provides state courts with jurisdiction to hear claims, but the
18 MMWA “by no means confers state courts with exclusive jurisdiction.” (Doc. No. 11 at 4.)
19 Hyundai points to the text of the statute, which “explicitly provides that the cause of action for a
20 violation of this statute can be tried in state or ‘in an appropriate district court.’” (Id.) (citing 15
21 U.S.C.A. § 2310(d)(1)). To this, the plaintiffs had no response, as they elected to file no reply
22 brief in support of their motion to remand. The court agrees with Hyundai’s analysis of the
23 federal statute and the independent cause of action it creates for alleged violations. Because
24 plaintiffs’ complaint facially includes two causes of action brought under the MMWA, a federal
25 statute, which undoubtedly arise under federal law, the court has original jurisdiction over
26 plaintiffs’ MMWA claims, so long as the amount in controversy requirement is established. See
27 Doc. No. 1-2 at 9–10; see also Saget v. Kia Am., Inc., No. 2:23-cv-00408-DAD-DB, 2023 WL
28 4956431, at *2 (E.D. Cal. Aug. 3, 2023); Miller v. Ford Motor Co., No. 19-cv-07382-BLF, 2020
1 WL 5569706, at *2 (N.D. Cal. Sept. 17, 2020) (noting that “federal courts will have subject
2 matter jurisdiction over [plaintiff’s MMWA claims] if the total amount in controversy is greater
3 than or equal to $50,000”).
4 B. Amount in Controversy
5 As referenced above, for a civil action like this one to have been brought in a district court
6 by a consumer for damages in the first place, the amount in controversy must not be “less than the
7 sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to
8 be determined.” 15 U.S.C.A. § 2310(d)(3)(b). Here, plaintiffs did not plead a specific amount of
9 monetary damages on the face of their complaint. (Doc. No. 1-2.) Rather, they simply state that
10 the amount in controversy exceeds $25,000. (Id. at 3.) Therefore, Hyundai bears the burden of
11 establishing that the amount in controversy actually exceeds $50,000 by a preponderance of the
12 evidence. Fritsch, 899 F.3d at 793.
13 In its notice of removal, Hyundai contends that the amount in controversy here exceeds
14 $50,000 based on the various forms of relief that plaintiffs seek, including restitution of the
15 purchase price of the vehicle in the amount of $40,697.20, actual damages, consequential and
16 incidental damages, attorneys’ fees and costs, and a civil penalty in the amount of two times
17 plaintiffs’ total damages. (Doc. No. 1 at 5–6.) In response, plaintiffs argue that Hyundai failed to
18 account for the current value and beneficial use of the vehicle when calculating the actual
19 damages and in contending that the amount in controversy has been satisfied here. (Doc. No. 6 at
20 7.) They further argue that civil penalties and attorneys’ fees are too speculative to be included in
21 the determination of the amount in controversy. (Id. at 8.)
22 1. Actual Damages
23 In their complaint, plaintiffs seek to be reimbursed for “all consideration given” for the
24 subject vehicle. (Doc. No. 1-2 at 10.) In the notice of removal, Hyundai calculates this amount to
25 be $40,697.20, by adding together two payment amounts and subtracting the service contract.
26 (Doc. No. 1 at 6.) In the pending motion to remand, plaintiffs argue that this number was
27 incorrectly calculated by defendant, because it did not include subtractions for the current value
28 and beneficial use of the vehicle. (Doc. No. 6 at 7.) In its opposition, Hyundai acknowledges that
1 “the buyer of a vehicle may recover ‘in an amount equal to the actual price paid or payable by the
2 buyer,’ reduced by an amount ‘directly attributable to use by the buyer.’” (Doc No. 11 at 5)
3 (citing Cal. Civ. Code § 1793.2(d)(2)(B)–(C)). Hyundai then calculates the value of the
4 beneficial use offset to be $635.89, using an odometer reading of 1,875 miles, which is visible on
5 the dashboard which appears in Exhibit D. (Doc. Nos. 11 at 6; 1-2 at 78–79.) Hyundai thus
6 updates its estimate of actual damages from $40,697.20 to $40,061.31. (Id. at 5–6.) Plaintiffs
7 offer no counterargument or rebuttal to this updated calculation as they did not file a reply or in
8 any way further dispute this updated estimate of actual damages.
9 To calculate the value of the offset, one multiplies “the actual price of the new motor
10 vehicle paid or payable by the buyer” by “a fraction having as its denominator 120,000 and
11 having as its numerator the number of miles traveled by the new motor vehicle prior to the time
12 the buyer first delivered the vehicle to the manufacturer or distributor, or its authorized service
13 and repair facility for correction of the problem that gave rise to the nonconformity.”
14 § 1793.2(d)(2)(C). Plaintiffs note in their complaint that they first took the subject vehicle to the
15 seller due to defects on June 14, 2022. (Doc. No. 1-2 at 5.) The service report from that date
16 notes a mileage of 1,939 miles. (Id. at 91.) The court calculates that the value of the offset using
17 this mileage reading would be $657.60, thus bringing the estimate of actual damages to
18 $40,039.60, just shy of Hyundai’s updated estimate appearing in their opposition. As such,
19 Hyundai has clearly established that actual damages contribute at least $40,000 to the amount in
20 controversy here.
21 2. Civil Penalties
22 In the complaint, plaintiffs also seek a civil penalty in their first cause of action brought
23 under the Song-Beverly Consumer Warranty Act of up to two times the amount of actual
24 damages. (Doc. No. 1-2 at 8.) In the notice of removal, Hyundai notes that this amount could be
25 $80,000 or more, calculated by doubling the amount of actual damages. (Doc. No. 1 at 6.) In its
26 motion to remand, plaintiffs argue that civil penalties are “too speculative.” (Id. at 8.) In its
27 opposition, Hyundai updates the value of the potential civil penalty to account for the mileage
28 /////
1 offset reduction in actual damages, and Hyundai’s resulting calculation still shows that the civil
2 penalties alone could exceed $80,000. (Doc. No. 11 at 7.)
3 District courts in the Ninth Circuit are split on the level of scrutiny to apply when
4 reviewing civil penalty estimates under the Song-Beverly Act in assessing the amounts in
5 controversy in such cases. On the one hand, many district courts do not require the defendant to
6 provide evidence beyond pointing to claims arising under the Act in the complaint. See, e.g.,
7 Modiano v. BMW of N. Am. LLC, No. 21-cv-00040-DMS-MDD, 2021 WL 973566, at *3 (S.D.
8 Cal. Mar. 16, 2021) (collecting cases); Luna v. BMW of N. Am., LLC, No. 3:17-cv-02067-BEN-
9 KSC, 2018 WL 2328365, at *4 (S.D. Cal. May 22, 2018) (including a doubled civil penalty in the
10 amount in controversy); Lee v. FCA US, LLC, No. 16-cv-5190 PSG (MRWx), 2016 WL
11 11516754, at *2 (C.D. Cal. Nov. 7, 2016) (including a doubled civil penalty in assessing damages
12 in motion to remand). However, some district courts have rejected the inclusion of civil penalties
13 or punitive damages when the defendant has not pointed to specific allegations in the complaint
14 that support an award of punitive damages or provided evidence that civil penalties will be
15 awarded. See, e.g., Savall v. FCA US LLC, No. 21-cv-195 JM (KSC), 2021 WL 1661051, at *3
16 (S.D. Cal. Apr. 28, 2021) (collecting cases); Ronquillo v. BMW of N. Am., LLC, No. 3:20-cv-
17 1413-W-WVG, 2020 WL 6741317, at *3 (S.D. Cal. Nov. 17, 2020) (“Rather than simply
18 assuming that because a civil penalty is available, one will be awarded, the defendant must make
19 some effort to justify the assumption by, for example, pointing to allegations in the Complaint
20 suggesting such an award would be appropriate.”).
21 The court finds that inclusion of a civil penalty in calculating the amount in controversy in
22 this case is appropriate, regardless of which approach described above is adopted. Notably,
23 plaintiffs have specifically alleged that Hyundai “willfully failed to comply with its
24 responsibilities under the Song-Beverly Consumer Warranty Act” and have submitted to the court
25 the repurchase denial letter that they received. (Doc. Nos. 1-2 at 8, 94; 11 at 6). Assuming that
26 plaintiffs will be successful on all their claims under the Song-Beverly Act, Hyundai’s alleged
27 willful failure to comply with the Act would entitle plaintiffs to recover a civil penalty up to two
28 times the amount of their actual damages. Cal. Civ. Code § 1794(c)–(e). The court thus agrees
1 with Hyundai that inclusion of civil penalties would add just over $80,000 to the amount in
2 controversy, and combined with at least $40,000 of actual damages, this total amount clearly
3 satisfies the $50,000 jurisdictional threshold.
4 3. Attorneys’ Fees
5 Finally, plaintiffs’ complaint seeks an award of attorneys’ fees. (Doc. No. 1-2 at 3.) As
6 Hyundai points out in its notice of removal, attorneys’ fees are recoverable under the Song-
7 Beverly Act, Cal. Civ. Code § 1794(e), and reasonable estimates should be included in evaluating
8 the amount in controversy. (Doc. No. 1 at 5–6) (citing Fritsch, 899 F.3d at 794 (“[A] court must
9 include future attorneys’ fees recoverable by statute or contract when assessing whether the
10 amount-in-controversy requirement is met.”)). Hyundai suggests that attorneys’ fees can be
11 “conservatively estimated” in the range of $45,000. (Doc. Nos. 1 at 6; 1-1 at 3). In their motion
12 to remand, plaintiffs argue that the attorneys’ fees are also “too speculative.” (Doc. No. 6 at 8.)
13 Hyundai did not address this point in its opposition, instead reiterating that over $120,000 is
14 already in controversy, even before taking attorneys’ fees or incidental and consequential
15 damages, which are also sought in this action, into account. (Doc. No. 11 at 7.)
16 While estimated attorneys’ fees can be considered in determining the amount in
17 controversy, and Hyundai’s estimate of $45,000 in such fees is facially reasonable, Hyundai has
18 not submitted evidence of attorneys’ fees sought by plaintiffs’ counsel in other comparable cases.
19 As such, the amount proffered for attorneys’ fees in the notice of removal may indeed be too
20 speculative. However, the court need not analyze the likely amount of attorneys’ fees in this case
21 any further since Hyundai has already met its burden of demonstrating that plaintiffs’ claims
22 surpass the $50,000 jurisdictional threshold for the amount in controversy as required for the
23 exercise of federal jurisdiction in this case.
24 Finally, the court will deny plaintiffs’ request for an award of attorneys’ fees incurred in
25 bringing this motion to remand. (Doc. No. 6 at 9.) “Absent unusual circumstances, courts may
26 award attorney’s fees under § 1447(c) only where the removing party lacked an objectively
27 reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists,
28 fees should be denied.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). As described
1 | above, the court concludes that Hyundai’s basis for removal was clearly objectively reasonable.
2 | Accordingly, plaintiffs’ request for attorneys’ fees will be denied.
3 CONCLUSION
4 For the reasons set forth above,
5 1. Plaintiffs’ motion to remand this action (Doc. No. 6) is denied; and
6 2. Plaintiffs’ request for attorneys’ fees (Doc. No. 6) is denied.
7 IT IS SO ORDERED.
* | pated: _ November 30, 2023 Dal A. 2, sxe
9 DALE A. DROZD
10 UNITED STATES DISTRICT JUDGE
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