1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 ) 11 ALEJANDRO CHAVEZ, ) Case No.: SACV 23-00303-CJC (ADSx) ) 12 ) ) Plaintiff, 13 ) ) v. 14 ) ORDER GRANTING PLAINTIFF’S ) MOTION TO REMAND [Dkt. 14] 15 BMW OF NORTH AMERICA, LLC, ) ) 16 and DOES 1 through 20, inclusive, ) ) 17 ) Defendants. ) 18 ) ) 19 ) 20

21 I. INTRODUCTION & BACKGROUND 22

23 On January 9, 2023, Plaintiff Alejandro Chavez filed this action in the Superior 24 Court of California, County of Orange, against Defendant BMW of North America, LLC, 25 and unnamed Does, asserting claims for breach of express and implied warranties under 26 the Song-Beverly Consumer Warranty Act (the “Act”) relating to a used 2016 BMW 27 740LI that he purchased. (See Dkt. 4-2 [Complaint, hereinafter “Compl.”].) Defendant 1 removed the case to this Court, asserting diversity jurisdiction. (See Dkt. 4 [Notice of 2 Removal, hereinafter “NOR”].) Before the Court is Plaintiff’s motion to remand. (See 3 Dkt. 14 [Plaintiff’s Notice of Motion and Motion for Remand to State Court, hereinafter 4 “Mot.”].) For the following reasons, that motion is GRANTED.1 5 6 II. LEGAL STANDARD 7 8 “Federal courts are courts of limited jurisdiction,” possessing “only that power 9 authorized by Constitution and statute.” Gunn v. Minton,

(2013) 10 (internal quotations omitted). A defendant may remove to federal district court a civil 11 action brought in state court, but over which a federal court may exercise original 12 jurisdiction. See

(a). By statute, federal courts have diversity 13 jurisdiction over suits where more than $75,000 is in controversy if the citizenship of 14 each plaintiff is different from that of each defendant. See

(a). “[T]he 15 amount in controversy includes damages (compensatory, punitive, or otherwise), the 16 costs of complying with an injunction, and attorneys’ fees awarded under fee-shifting 17 statutes or contract.” Fritsch v. Swift Transp. Co. of Ariz., LLC,

(9th 18 Cir. 2018). 19 20 The burden of establishing subject matter jurisdiction falls on the defendant. See 21 Gaus v. Miles, Inc.,

(9th Cir. 1992). A notice of removal must include 22 only “a plausible allegation that the amount in controversy exceeds the jurisdictional 23 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens,

, 553–54, 24 (2014). But where “the plaintiff contests, or the court questions, the defendant’s 25 26

27 1 Having read and considered the papers presented by the parties, the Court finds this matter appropriate 1 allegation” and “both sides submit proof,” the defendant must prove the amount in 2 controversy by a preponderance of the evidence.

. 3 4 The removal statute is strictly construed against removal jurisdiction. See Gaus, 5

. Indeed, “[f]ederal jurisdiction must be rejected if there is any doubt as 6 to the right of removal in the first instance.”

If the court determines that it lacks 7 subject matter jurisdiction, the action shall be remanded to state court. See 28 U.S.C. 8 § 1447(c). 9 10 III. ANALYSIS 11 12 Chavez alleges that the total amount in controversy exceeds $25,000 but does not 13 allege a specific amount in controversy. (See Compl. ¶ 14.) BMW calculates its asserted 14 amount in controversy by adding the amount of “the retail installment sales contract for 15 the Subject Vehicle,” equaling $51,910.64, to a penalty of double that amount for a total 16 of $155,731.92. (See NOR at 2, 4.) Thus, even without including attorneys’ fees, which 17 are “generally at least another $100,000 through trial,” BMW contends that the amount in 18 controversy exceeds $75,000. (See id. at 4.) However, after examining actual damages, 19 civil penalties, and attorneys’ fees, the Court concludes that Defendant has failed to meet 20 its burden to show by a preponderance of the evidence that the amount in controversy 21 exceeds $75,000. 22 23 A. Defendant Fails to Carry its Burden as to Actual Damages 24 25 The first category of damages that BMW includes in its calculation of the amount 26 in controversy is actual damages. Actual damages under the Act are the “actual price 27 paid or payable by the buyer,” minus the reduction in value “directly attributable to use 1 2 BMW’s calculation of damages fails to account properly for use of the car before 3 Chavez tendered it for repair. See id. § 1793.2(d)(2)(C) (“[T]he amount to be paid by the 4 manufacturer to the buyer may be reduced by the manufacturer by that amount directly 5 attributable to use by the buyer prior to the time the buyer first delivered the vehicle to 6 the manufacturer or distributor, or its authorized service and repair facility for correction 7 of the problem that gave rise to the nonconformity.”). This is often called a “use offset.” 8 See, e.g., Schneider v. Ford Motor Co.,

, 700–01 (9th Cir. 2018). 9 Though BMW briefly discusses an offset calculation, it does not explain the source of the 10 6,445 miles stated in that calculation or, if that is an assumption as to the number of miles 11 driven, why that assumption is reasonable. (See NOR at 5; Dkt. 4-1 [Declaration of Abtin 12 Amir ISO Defendant BMW of North America, LLC’s Notice of Removal, hereinafter 13 “Amir Decl.”] ¶ 5.) BMW’s oversight is especially significant here, where Chavez has 14 driven the car for three years, because it is possible that Chavez drove the car for many 15 more miles before he took it in for repair. See, e.g., Mullin v. FCA US, LLC,

2509081, at *3 (C.D. Cal. May 14, 2020) (remanding where the defendants “failed to 17 take into account the mileage offset in alleging that the amount in controversy exceeds 18 the jurisdictional minimum”); Eberle v. Jaguar Land Rover N. Am., LLC,

4674598, at *2 (C.D. Cal. Sept. 26, 2018) (remanding, even where the purchase price of 20 the car was high, because the defendant “offered no maintenance record or any other facts 21 to assist the Court in determining what the actual damages might be without resorting to 22 speculation”). 23 24 Given BMW’s failure to account for the use offset, it has failed to carry its burden 25 as to Plaintiff’s actual damages. See, e.g., Edwards v. Ford Motor Co.,

6583585, at *4 (C.D. Cal. Nov. 4, 2016) (concluding that “Defendant has failed to 27 establish the likelihood that Plaintiff may recover any amount of actual damages by a 1 things, what the use offset would be); Sanchez v. Ford Motor Co.,

, at 2 *1 (C.D. Cal. Dec. 4, 2018) (remanding where defendant did not account for use offset).2 3 4 B. BMW Fails to Carry its Burden as to a Civil Penalty 5 6 The next category that BMW includes in its estimate of the amount in controversy 7 is a civil penalty, which it says is two times actual damages. (See NOR at 4–5.) A 8 plaintiff who establishes that a violation of the Act was willful may recover a civil 9 penalty of up to two times the amount of actual damages. See

(c) 10 (authorizing a civil penalty where the violation was willful). 11 12 “The civil penalty under California Civil Code § 1794(c) cannot simply be 13 assumed.” Castillo v. FCA USA, LLC,

, at *2 (S.D. Cal. Dec. 5, 2019) 14 (remanding where the defendant provided no specific argument or evidence for including 15 a civil penalty in the amount in controversy); see also Zawaideh v. BMW of N. Am., LLC, 16

, at *2 (S.D. Cal. Apr. 17, 2018) (explaining that a defendant may not 17 “simply assume that because a civil penalty is available, one will be awarded”); Chavez, 18

, at *2 (remanding where the defendant did not explain why a penalty 19 applying to willful conduct would be awarded in the case); Eberle,

, at 20 *2 (similar). Rather, the defendant “must make some effort to justify the assumption.” 21 Zawaideh,

, at *2; Herko v. FCA US, LLC,

, at *2 22 (S.D. Cal. Oct. 30, 2019) (similar); see also Sanchez,

, at *1 23 (remanding where civil penalties were “too speculative for inclusion in the amount-in- 24 25 2 BMW also tries to support its amount-in-controversy assertion by noting that Chavez seeks incidental 26 and consequential damages in addition to actual damages. (See NOR at 2, 4–5; Dkt. 17 [BMW of North 27 America, LLC’s Opposition to Plaintiff’s Motion to Remand, hereinafter “Opp.”] at 5.) But BMW only notes that fact, and it provides no estimate of what those damages might equal, let alone an explanation 1 controversy”); Chajon v. Ford Motor Co.,

, at *2 (C.D. Cal. Jan. 8, 2 2019) (similar). 3 4 BMW has not shown by a preponderance of the evidence that a civil penalty would 5 be awarded in this case. It points only to Chavez’s allegation that he should recover a 6 civil penalty and two cases discussing penalties under the Act. (See NOR at 5; Opp. at 7 5.) But BMW does not explain how those cases are similar to this one. Because courts 8 do not simply assume that a civil penalty will be awarded and the removal statute is 9 strictly construed against removal jurisdiction, this plainly does not suffice. 10 11 C. BMW Fails to Carry its Burden as to Attorneys’ Fees 12 13 Attorneys’ fees that accrue after the filing of a notice of removal may be included 14 in an estimate of the amount in controversy. See Fritsch,

. But a 15 removing defendant must “prove that the amount in controversy (including attorneys’ 16 fees) exceeds the jurisdictional threshold by a preponderance of the evidence” and must 17 “make this showing with summary-judgment-type evidence.”

“A district court may 18 reject a defendant’s attempts to include future attorneys’ fees in the amount in 19 controversy if the defendant fails to satisfy this burden of proof.”

20 21 Here, BMW makes no effort to explain what amount of attorneys’ fees might be 22 sought or awarded. (See NOR at 6–7.) BMW’s counsel baldly asserts that counsel 23 “routinely sees attorneys from the California plaintiffs’ bar demand, and often receive, 24 over $100,000 in . . . fees and costs following trial in these Song-Beverly vehicle 25 warranty matters, and they routinely demand $15,000 or more for early settlements.” 26 (Amir Decl. ¶ 4.) But other than vaguely citing his “experience,” he “provides no 27 indication how he knows” this to be the case. Villiarimo v. Aloha Island Air, Inc., 281 1 || previously litigated like this one and the fees incurred. Thus, the declaration amounts to 2 ||nothing more than “conclusory allegations unsupported by factual data.” Hansen v. 3 || United States,

(9th Cir. 1993). Nor does BMW or counsel provide an 4 estimate of the hours that will be incurred or hourly rates that would apply in this case. 5 || See Mullin,

, at *4 (citing such a deficiency in remanding); Castillo, 6 |}

, at *2 (similar); Sanchez,

, at *1 (remanding where 7 attorneys’ fees were “too speculative for inclusion in the amount-in-controversy’’); 8 || Chajon,

, at *2 (similar). 9 10 ||} IV. CONCLUSION 11 12 Simply put, the values that BMW used to compute the amount in controversy are 13 ||not adequately supported. Since there remains doubt whether the amount in controversy 14 ||exceeds $75,000, the Court must remand the case. See Gaus,

. 15 || Accordingly, Chavez’s motion to remand is GRANTED, and this action is 16 || REMANDED to the Superior Court of California, County of Orange. 17 18 19 DATED: — April 11, 2023 J of A LLG 21 CORMAC J. CARNEY 22 UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28