Travis Gonzales v. Carmax Auto Superstores, LLC
840 F.3d 644
9th Cir.2016Background
- Gonzales bought a used 2007 Infiniti G35 marketed by CarMax as a “certified” vehicle after seeing CarMax advertising its “125‑point” inspection.
- CarMax gave Gonzales a one‑page CQI Certificate before sale and a two‑page CQI Certificate placed in the glove compartment; both list components inspected but do not indicate pass/fail results for individual parts.
- CarMax’s internal CQI/VQI Checklist (236+ inspection points) records component‑specific results but is destroyed after results are uploaded and is not given to consumers.
- After purchase Gonzales experienced multiple mechanical problems and sued under California consumer protection laws (CLRA and UCL), alleging CarMax violated Cal. Veh. Code § 11713.18(a)(6) by failing to provide a “completed inspection report.”
- The district court granted summary judgment for CarMax on the CLRA and UCL claims; the Ninth Circuit reversed, holding the CQI Certificates are not “completed inspection reports” as a matter of California law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CarMax’s CQI certificates satisfy Cal. Veh. Code § 11713.18(a)(6)’s requirement of a “completed inspection report” | Gonzales: a completed inspection report must show component‑specific inspection results (pass/fail); CQI certificates are incomplete and thus violate the statute | CarMax: listing inspected components is sufficient; the CQI form meets the statute’s disclosure requirement | Held: CQI certificates are insufficient; a completed inspection report must indicate the result for each inspected component (industry meaning + statute purpose) |
| Proper construction of “inspection report” / “completed” under California law | Gonzales: terms have industry technical meaning requiring component‑level results | CarMax: terms need not require component‑level pass/fail marking; legislature did not intend more than a component list | Held: “inspection report” is a term of art in the auto industry requiring component‑specific results; “completed” requires marking results for each component |
| Effect of statutory drafting history (deletion of clause requiring certification that all inspected components meet standards) | Gonzales: deletion removed substantive obligation but not the disclosure requirement; disclosure still must be complete | CarMax: drafting history shows legislature did not intend detailed component results | Held: deletion removed a substantive pass‑all requirement but left the disclosure obligation; drafting history does not support CarMax’s narrow reading |
| Whether federal diversity jurisdiction (amount in controversy) was proper | Gonzales: challenged amount in controversy | CarMax: demonstrated preponderance that amount exceeded $75,000 considering damages and potential injunctive costs | Held: District court did not err — amount in controversy satisfied diversity jurisdiction |
Key Cases Cited
- Kroske v. U.S. Bank Corp., 432 F.3d 976 (9th Cir.) (standard for review of diversity jurisdiction)
- Ventura Packers, Inc. v. F/V JEANINE KATHLEEN, 305 F.3d 913 (9th Cir.) (summary judgment standard)
- Theis Research, Inc. v. Brown & Bain, 400 F.3d 659 (9th Cir.) (amount in controversy definition)
- Guglielmino v. McKee Foods Corp., 506 F.3d 696 (9th Cir.) (what constitutes an amount in controversy)
- Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042 (9th Cir.) (amount in controversy may include fees/injunctive costs)
- St. Paul Fire & Marine Ins. Co. v. Weiner, 606 F.2d 864 (9th Cir.) (applying state law in diversity cases)
- Med. Lab. Mgmt. Consultants v. Am. Broad. Companies, Inc., 306 F.3d 806 (9th Cir.) (predicting state supreme court decisions)
- Dimidowich v. Bell & Howell, 803 F.2d 1473 (9th Cir.) (use of state appellate decisions when state supreme court silent)
- People v. Coronado, 906 P.2d 1232 (Cal.) (statutory interpretation: ascertain legislative intent)
- Voices of the Wetlands v. State Water Res. Control Bd., 52 Cal.4th 499 (Cal.) (plain‑meaning rule)
- Prof’l Engineers in Cal. Gov’t v. Brown, 177 Cal. Rptr. 3d 567 (Ct. App.) (context and technical terms in statutory construction)
- Ruiz v. Podolsky, 50 Cal.4th 838 (Cal.) (terms of art and legislative awareness)
- Moyer v. Workmen’s Comp. Appeals Bd., 514 P.2d 1224 (Cal.) (give significance to every word in a statute)
- Albino v. Baca, 747 F.3d 1162 (9th Cir.) (sua sponte grant of summary judgment to nonmoving party conditions)