Dickerson v. NWAN Incorporated
2:17-cv-01899
D. Ariz.Apr 4, 2018Background
- Plaintiffs Paul and Ma Riza Dickerson bought a Dodge Ram covered by a "Warranty Forever" powertrain warranty administered by NWAN and sold by Superstition Springs MID LLC.
- The warranty required maintenance at Superstition or pre-authorization for outside service; Plaintiffs’ covered repair was denied and the warranty voided for failure to pre-authorize, leading to an MMWA-based claim that the pre-authorization requirement is an unlawful tying provision.
- Plaintiffs sued Superstition and NWAN, asserting CAFA as the sole basis for federal jurisdiction; the court previously dismissed the intentional-interference claim and NWAN as a defendant.
- Superstition submitted warranty data showing 209 voided warranties over four years, 82 voided (in whole or part) for failure to pre-authorize; Superstition argued CAFA’s requirements (minimal diversity, 100-class-members, $5M aggregate) are not met.
- Plaintiffs provided only conclusory allegations of class size and amount in controversy and no concrete evidence to support a >100-member class or >$5 million aggregate damages; Plaintiffs alleged $3,700 in individual warranty loss and other nonquantified injunctive relief.
- The court found Plaintiffs, as proponents of federal jurisdiction, failed to carry their burden to prove CAFA requirements by a preponderance of the evidence and dismissed the case without prejudice for lack of subject matter jurisdiction; attorneys’ fees requested by defendant were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA minimal diversity existed despite dismissal of NWAN | Diversity existed at filing so post-filing dismissal does not destroy jurisdiction | Dismissal of diverse defendant eliminates minimal diversity | Court: Diversity at filing controls; minimal diversity existed at outset (plaintiffs’ reliance accepted) |
| Whether class-size requirement (≥100 members) satisfied | Complaint alleged >100 class members including those whose warranties are not yet voided | Defendant’s records show far fewer potential claimants tied to the specific service-requirement at issue (82 warranty voids related to pre-authorization) | Court: Plaintiffs offered no reliable evidence to show ≥100 class members; defendant’s affidavit evidence undermined plaintiffs’ allegation |
| Whether aggregate amount-in-controversy (>$5M) satisfied | Complaint alleged >$5M class-wide; plaintiffs point to broader class of non-voided warranties and seek injunctive relief | Defendant showed damage-limiting warranty term and average sale prices making 82 claimants worth far less than $5M; sought court to rely on its affidavits | Court: Plaintiffs failed to provide specific factual allegations or evidence to meet $5M threshold; mere recitation insufficient; $5M not shown |
| Burden of proof for CAFA jurisdiction | Plaintiffs (as forum choosers) must prove jurisdictional facts by preponderance | Defendant argued plaintiffs must prove CAFA elements and offered competing evidence | Court: Plaintiffs bear burden and failed to meet it; dismissal for lack of subject matter jurisdiction |
Key Cases Cited
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (Sup. Ct.) (party asserting removal jurisdiction must put forward evidence; court decides by preponderance when challenged)
- Ibarra v. Manheim Invs., Inc., 775 F.3d 1193 (9th Cir.) (defendant must support amount-in-controversy with evidence; reasonable deductions required)
- Robinson v. United States, 586 F.3d 683 (9th Cir.) (party asserting subject-matter jurisdiction bears the burden once challenged)
- Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090 (9th Cir.) (party asserting jurisdiction must prove jurisdictional facts)
- United Steel v. Shell Oil Co., 602 F.3d 1087 (9th Cir.) (post-filing developments do not defeat jurisdiction if diversity existed at filing)
- Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir.) (amount-in-controversy requires evidence and reasonable deductions; threadbare assertions insufficient)
- Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir.) (post-filing loss of a diverse defendant does not necessarily destroy CAFA jurisdiction)