Eduardo Mendoza v. Subaru of America
2:19-cv-09778
C.D. Cal.Mar 24, 2020Background:
- Plaintiff Eduardo Mendoza sued Subaru of America in Los Angeles County Superior Court alleging violations of the Magnuson-Moss Warranty Act and the Song-Beverly Consumer Warranty Act based on his purchase of a used 2014 Subaru Forester.
- Complaint seeks restitution of all money paid, incidental and consequential damages, and attorneys' fees; it does not allege a specific amount-in-controversy.
- Defendant removed to federal court asserting federal-question jurisdiction under Magnuson-Moss and diversity jurisdiction, claiming the amount-in-controversy exceeds both $50,000 (Magnuson-Moss) and $75,000 (diversity).
- In its Notice of Removal Defendant relied on the vehicle's sale price ($28,354.72), prospective attorneys' fees, and potential Song-Beverly civil penalties (double damages) to reach the jurisdictional thresholds.
- Defendant submitted the installment contract listing sale price but failed to provide: (a) how much Plaintiff actually paid; (b) the vehicle's mileage (used to reduce recoverable restitution); or (c) evidence of willful conduct supporting civil penalties.
- The Court remanded the action for lack of subject-matter jurisdiction, finding the removing party did not meet its burden to prove the required amount-in-controversy.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal-question jurisdiction under Magnuson-Moss exists (>$50,000) | Complaint seeks restitution and fees but pleads no dollar amount | Sale price + attorneys' fees + Song-Beverly civil penalty exceed $50,000 | No — removal fails; Defendant did not prove amount-in-controversy by preponderance; required facts (payments, mileage) missing; fees excluded from M-M calculation |
| Whether diversity jurisdiction exists (>$75,000) | No amount pleaded; seeks fees and restitution | Sale price + projected attorneys' fees and penalties exceed $75,000 | No — speculative projections insufficient; prospective attorneys' fees too speculative to include |
| Whether attorneys' fees and Song-Beverly civil penalties may be included in amount-in-controversy | Seeks attorneys' fees and statutory penalties | Counts fees and double-damages to meet thresholds | Attorneys' fees are excluded from Magnuson-Moss amount-in-controversy as costs/interest; for diversity fees are too speculative; civil penalties unsupported absent evidence of willfulness |
Key Cases Cited
- Lowdermilk v. United States Bank Nat'l Ass'n, 479 F.3d 994 (9th Cir. 2007) (removing defendant bears burden to show amount-in-controversy)
- Guas v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal statute strictly construed; removing party must supply jurisdictional facts)
- Schimmer v. Jaguar Cars, Inc., 384 F.3d 402 (7th Cir. 2004) (use-based reduction to restitution in vehicle cases)
- Ansari v. Bella Automotive Group, Inc., 145 F.3d 1270 (11th Cir. 1998) (attorneys' fees treated as costs/interest and excluded from certain amount-in-controversy calculations)