Matthew Greene v. Harley-Davidson, Inc.
965 F.3d 767
| 9th Cir. | 2020Background
- Plaintiff Matthew Greene bought a new Harley-Davidson motorcycle and paid a $1,399 "freight and prep" (dealer setup) fee he believed was not included in the manufacturer suggested retail price (MSRP).
- Greene later alleged Harley-Davidson reimbursed dealers for setup costs, so the setup fee was effectively included in the MSRP and the dealership’s separate charge was deceptive.
- Greene filed a putative class action (2015–2017 class period) asserting fraud/false advertising, CLRA, unjust enrichment, and related claims, seeking compensatory damages, punitive damages, attorneys’ fees, and injunctive relief.
- Harley-Davidson removed under CAFA, asserting the amount in controversy exceeded $5 million by including compensatory damages, punitive damages (assumed 1:1 ratio), and attorneys’ fees.
- The district court remanded, finding Harley-Davidson failed to analogize prior punitive-award cases to show such a ratio was likely and appeared to treat statute-of-limitations/tolling arguments as limiting class punitive exposure to $1,399.
- The Ninth Circuit reversed: a defendant need only show that the proffered punitive damages amount is reasonably possible (not probable), and Harley-Davidson met that standard by citing prior CLRA cases with equal-or-higher punitive/compensatory ratios; the district court erred by resolving merits-based defenses at the jurisdictional stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden to invoke punitive damages for CAFA amount-in-controversy | Greene: punitive damages should be limited to individual, tolled claims (≈ $1,399) and defendants must show more than mere citation to prior cases | Harley-Davidson: need only show punitive damages are reasonably possible; citing prior CLRA cases with ≥1:1 ratios suffices | A defendant may satisfy CAFA by showing punitive damages are reasonably possible; Harley-Davidson met the burden by citing analogous punitive-award cases; remand reversed. |
| Consideration of statute-of-limitations/tolling in amount-in-controversy inquiry | Greene: merits defenses (tolling/American Pipe) limit class exposure, so punitive damages for unnamed members are unavailable | Harley-Davidson: court must not resolve merits (e.g., tolling) when assessing amount at stake | Court: district court erred by resolving merits defenses; potential defenses are irrelevant to whether amount is "at stake." |
| Inclusion of attorneys’ fees in amount calculation | Greene: common-fund fees come from recovery and should not be added to reach jurisdictional amount | Harley-Davidson: reasonable to include an attorneys’ fees estimate (e.g., 25%) when calculating amount in controversy | Court: including a reasonable attorneys’ fees estimate is permissible; defendant need not prove fees to a legal certainty. |
Key Cases Cited
- American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) (tolling of individual claims while class action is pending)
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014) (short-and-plain statement standard for removal pleadings)
- Ibarra v. Manheim Investments, Inc., 775 F.3d 1193 (9th Cir. 2015) (defendant bears preponderance burden to show amount in controversy when complaint is silent)
- Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644 (9th Cir. 2016) (amount in controversy = amount "at stake," not probability of liability)
- Arias v. Residence Inn by Marriott, 936 F.3d 920 (9th Cir. 2019) (remand orders in CAFA cases reviewed de novo)
- LaCross v. Knight Transp. Inc., 775 F.3d 1200 (9th Cir. 2015) (reasonable chain of logic can support amount-in-controversy calculation)
- Pirozzi v. Massage Envy Franchising, LLC, 938 F.3d 981 (8th Cir. 2019) (prior decisions upholding high punitive ratios can support removal amount)
- Keeling v. Esurance Inc. Co., 660 F.3d 273 (7th Cir. 2011) (courts should not convert amount-in-controversy inquiry into merits-based likelihood analysis)
- Frederick v. Hartford Underwriters Ins. Co., 683 F.3d 1242 (10th Cir. 2012) (defendant need only show it is possible punitive damages are in play)
- Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495 (3d Cir. 2014) (possible exposure to punitive damages suffices for amount-in-controversy)
- Chavez v. JPMorgan Chase & Co., 888 F.3d 413 (9th Cir. 2018) (amount in controversy is not a merits-based prospective liability assessment)
- Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102 (9th Cir. 2010) (a defendant’s potential defenses are irrelevant to the amount at stake)