I. History
On January 15, 2000, Donald Schimmer bought a new 2000 Jaguar XK8, manufactured by Jaguar Cars, Inc., from Towne & Countree Auto Sales, Inc. Schimmer paid the $69,513.00 purchase price in cash.
Jaguar provided a limited written manufacturer’s warranty to repair or replace any nonconformities or defects in material or workmanship for three years or thirty-six thousand miles. Schimmer encountered various problems with the XK8 and took the car to authorized Jaguar dealerships for repairs under the manufacturer’s warranty on numerous occasions.
After the dealers were unable to repair the XK8 to Schimmer’s satisfaction, Schimmer’s lawyer notified Jaguar, in a letter dated November 6, 2001, that Schim-mer had revoked his acceptance of the vehicle. Jaguar refused to accept Schim-mer’s revocation. Subsequent to the purported revocation, the XK8 has remained in storage.
On February 13, 2003, Schimmer filed a four-count complaint in Illinois state court, alleging violations of the Magnuson-Moss Warranty Act of 1975, 15 U.S.C. §§ 2301, et seq. (“Magnuson-Moss Act”) and the Illinois New Vehicle Buyer Protection Act, 815 Ill. Comp. Stat. 380/1, et seq. (“Illinois Lemon Law”). Counts I, II, and III alleged breach of written warranty, breach of implied warranty, and revocation of acceptance, respectively, pursuant to the Magnuson-Moss Act. Count TV alleged a violation of the Illinois Lemon Law. For each of the four counts, Schimmer’s complaint demanded the return of all money paid, reimbursement for diminution in value of the vehicle, incidental and consequential damages, attorneys’ fees, and any further relief that the court found appropriate. Schimmer also averred that to the best of his knowledge, the amount in controversy exceeded $50,000.00.
Jaguar filed a timely notice of removal to federal district court on March 17, 2003, asserting that the court had federal subject-matter jurisdiction under the Magnu-son-Moss Act. Once in federal court, Jaguar moved to dismiss Counts II and III of the complaint — Schimmer’s breach of implied warranty and revocation claims under the Magnuson-Moss Act — as well as Count IV, the state law claim. In its
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Memorandum Opinion and Order ruling on the motion to dismiss, the district court, without discussion, noted that because Schimmer’s complaint alleged damages in excess of $69,513.00 (the purchase price of the car) the Magnuson-Moss Act’s $50,000 amount in controversy requirement was satisfied and thus federal subject-matter jurisdiction existed over the Magnuson-Moss Act claims.
Schimmer v. Jaguar Cars, Inc.,
A jury trial ensued on Schimmer’s remaining claims for breach of written warranty (Count I) and revocation of acceptance (Count III). The jury returned a verdict in favor of Jaguar, and on September 17, 2003, final judgment was entered against Schimmer. Schimmer filed a timely notice of appeal on September 30, 2003. On appeal, Schimmer argues that the district, court did not have jurisdiction over the Magnuson-Moss Act claims because the amount in controversy did not meet the $50,000 threshold required by the Act, rendering Jaguar’s removal improper and necessitating remand to the state court. In the alternative, Schimmer argues that the district court’s dismissal of his Illinois Lemon Law claim was in error.
II. Analysis
The first question presented on appeal is whether removal to federal court was appropriate. “Removal is proper over any action that could have originally been filed in federal court.”
Chase v. Shop ‘N Save Warehouse Foods, Inc.,
When a defendant removes a case from state to federal court, the defendant must demonstrate to a “reasonable probability” that subject-matter jurisdiction exists.
Chase,
Schimmer alleged three different counts under the Magnuson-Moss Act, all of which pray for the same broad relief, *405 including a full refund of the $69,513.00 purchase price. Jaguar argues that, by itself, the $69,513.00 refund request satisfies the Magnuson-Moss Act’s amount in controversy requirement. 1 Jaguar’s proposed analysis is too simplistic. Merely to accept the amount claimed in the complaint as the amount in controversy sidesteps the “reasonable probability” analysis.
The Magnuson-Moss Act “allows a ‘consumer’ to bring a suit where he claims to be ‘damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this [Act] or under a written warranty, implied warranty, or service contract.’ ”
Voelker v. Porsche Cars N. Am., Inc.,
Section 2304 of the Act imposes minimum federal warranty standards for “full warranties” and provides remedies for their breach, including either a full refund of the purchase price or a replacement of the product if the warrantor cannot remedy defects or malfunctions after reasonable attempts to do so.
Id.
Yet, as pled in the complaint, the XK8’s warranty is a “limited” one not subject to § 2304 and thus not subject to the Act’s substantive remedies, including a refund of the $69,513 purchase price.
See
15 U.S.C. § 2303(a);
MacKenzie v. Chrysler Corp.,
The Act also, however, allows consumers to enforce written and implied warranties in federal court, borrowing state law causes of action.
Gardynski-Leschuck v. Ford Motor Co.,
Jaguar insists that the $50,000 amount in controversy requirement is met because Illinois law entitles Schimmer to revoke acceptance and thus claim entitlement to a refund of the purchase price of the car. See, e.g., 810 Ill. Comp. Stat. 5/2-608, 5/2-711(1). But even if Illinois law allows a refund of the $69,513.00 purchase price under the facts of this case, the amount in controversy, that is, Schimmer’s true damages, could not exceed $50,000.
If the district court were to determine that Schimmer could revoke his acceptance of the car and receive a refund of the purchase price, then Jaguar would also be entitled to re-take possession of the car (now worth only $54,013.00, as explained below). In addition, Jaguar would also be entitled to a credit for the value Schimmer received from his use of the car while it was in his possession. Hence, Schimmer’s true money damages — and concomitantly, the true amount in controversy — would
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equal only the difference between the price of the new car and the worth of the allegedly defective car, reduced by his beneficial use of the defective car. Jaguar could not lose $69,513, any more than Schimmer could gain that amount. We so held in a similar Magnuson-Moss case and calculated damages using the following formula: the price of a replacement vehicle, minus both the present value of the allegedly defective car and the value that the plaintiff received from the use of the allegedly defective car.
Gardynski-Leschuck,
Here, the complaint and the record before us are sufficient to determine that the amount in controversy could not have exceeded $50,000 at the time Jaguar removed the case. Jaguar argues that only information contained in the complaint may be used to determine the amount in controversy. Yet, as explained earlier, we are not bound to accept at face value Schimmer’s demand for a refund, or any affidavit asserting that damages claimed exceeded $50,000, when he is not entitled
at law
to recover such damages. The amount in controversy “is determined by an evaluation of the controversy described in the plaintiffs complaint and the record as a whole, as of the time the case was filed.”
Uhl,
We know from Schimmer’s complaint that the purchase price of a replacement XK8 is $69,513.00 because that is what he paid for the allegedly defective vehicle. Prior to filing the present suit, Schimmer hired an expert to inspect the XK8 and opine as to its diminished value based on its alleged defects. According to the expert’s inspection of the XK8, the car was worth $54,013.00 when Jaguar removed the case. 2 Applying the numbers to the Gardynski-Leschuck formula, the cost of a replacement vehicle ($69,513.00) minus the present value of the defective car ($54,-013.00) yields $15,500.00. To complete the formula, this $15,500.00 figure must be further reduced by the value that Sehim-mer obtained from his use of the XK8. Although we have no way of knowing what this figure might be, even if it is $0.00, the maximum Schimmer could recover (and the maximum loss to Jaguar) under Illinois law would be $15,500.00. As this figure is well below the $50,000 amount in controversy requirement necessary to establish subject-matter jurisdiction under the Mag-nuson-Moss Act, we find that this case was improperly removed from state court and must be dismissed for lack of subject-matter jurisdiction.
III. Conclusion
Because the amount in controversy cannot exceed $50,000 to any legal probability, there is no federal subject-matter jurisdiction for Schimmer’s claims under the Mag-nuson-Moss Act. Without federal subject-matter jurisdiction, there can be no supplemental jurisdiction to consider the district court’s interpretation of the Illinois Lemon Law. We Vacate the district court’s decision and Remand with instructions to dismiss for lack of subject-matter jurisdiction.
Notes
. We note that Schimmer’s complaint demanded attorneys' fees, incidental and consequential damages, and any further relief that the court found necessary. Because Jaguar, carrying the burden of proof as the removing party, presented no evidence attempting to quantify these damages, nor even pressed that these damages should be included in the amount in controversy, we need not consider them.
. The expert conducted his inspection on December 10, 2001, which was after Schimmer placed the XK8 into storage and more than a year prior to the filing of this suit. Assuming that any further diminishment in value would not be due to any defect of the XK8, we can infer that the diminished value on the date of removal was the same.