1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 TRENEIL COSTELLO, Case No. 2:24-cv-09802-FLA (ASx)

12 Plaintiff, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION [DKT. 11] 14 MERCEDES-BENZ USA, LLC, 15 Defendant. 16 17

18 19 20 21 22 23 24 25 26 27 28 1 RULING 2 On October 1, 2024, Plaintiff Treneil Costello (“Plaintiff”) filed a Complaint in 3 the Los Angeles County Superior Court, asserting two causes of action against 4 Defendant Mercedes-Benz USA, LLC (“Defendant”) for violations of the California 5 Song-Beverly Consumer Warranty Act (“Song-Beverly Act”),

, 6 et seq. See Dkt. 1-2 (“Compl.”). As relevant here, Plaintiff seeks actual damages, 7 civil penalties, and attorney’s fees.

. 8 On November 13, 2024, Defendant removed the action to this court, alleging 9 the existence of diversity jurisdiction under

(a)(1). Dkt. 1 at 2. On 10 December 4, 2024, the court ordered the parties to show cause (“OSC”) why the 11 action should not be remanded for lack of subject matter jurisdiction due to an 12 insufficient amount in controversy. Dkt. 11. Defendant filed a response on December 13 18, 2024. Dkt. 12 (“Def.’s Resp.”). 14 Having reviewed the Notice of Removal and Defendant’s response to the OSC, 15 the court finds Defendant fails to establish subject matter jurisdiction by a 16 preponderance of the evidence and REMANDS this action to the Los Angeles County 17 Superior Court. 18 DISCUSSION 19 Federal courts are courts of “limited jurisdiction,” possessing “only that power 20 authorized by [the] Constitution and statute, which is not to be expanded by judicial 21 decree.” Kokkonen v. Guardian Life Ins. Co. of Am.,

(1994) 22 (citations omitted); U.S. Const. art. III, § 2, cl. 1. District courts are presumed to lack 23 jurisdiction unless the contrary appears affirmatively from the record. 24 DaimlerChrysler Corp. v. Cuno,

, 342 n. 3 (2006). Additionally, federal 25 courts have an obligation to examine jurisdiction sua sponte before proceeding to the 26 merits of a case. See Ruhrgas AG v. Marathon Oil Co.,

(1999). 27 Most commonly, federal courts have subject matter jurisdiction where: (1) an 28 action arises under federal law (federal question jurisdiction),

; or 1 (2) the amount in controversy exceeds $75,000, exclusive of interest and costs, and the 2 citizenship of each plaintiff is diverse from that of each defendant (diversity 3 jurisdiction),

(a). Except as otherwise provided by an act of 4 Congress expressly, “any civil action brought in a State court of which the district 5 courts of the United States have original jurisdiction[] may be removed by the 6 defendant or the defendants” to the district court for the district and division where the 7 action is pending.

. 8 A defendant’s notice of removal must include “a plausible allegation that the 9 amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin 10 Operating Co. v. Owens,

, 89 (2014). “[W]hen the plaintiff contests, or 11 the court questions, the defendant’s allegation,” “both sides [must] submit proof,” at 12 which point “the court decides, by a preponderance of the evidence, whether the 13 amount-in-controversy requirement has been satisfied.”

at 88–89. Courts “strictly 14 construe the removal statute against removal jurisdiction,” and “[f]ederal jurisdiction 15 must be rejected if there is any doubt as to the right of removal in the first instance.” 16 Gaus v. Miles, Inc.,

(9th Cir. 1992). “The ‘strong presumption’ 17 against removal jurisdiction means that the defendant always has the burden of 18 establishing that removal is proper.”

19 A. Actual Damages 20 At issue here is whether the amount in controversy exceeds the $75,000 21 jurisdictional minimum for diversity jurisdiction. Under the Song-Beverly Act, a 22 plaintiff may recover “in an amount equal to the actual price paid or payable by the 23 buyer,” reduced by “that amount directly attributable to use by the buyer prior to the 24 time the buyer first delivered the vehicle to the manufacturer or distributor, or its 25 authorized service and repair facility for correction of the problem that gave rise to the 26 nonconformity.”

(d)(2)(B)–(C). This includes a mileage 27 offset, which is calculated by reducing the purchase price by an amount directly 28 proportional to the number of miles driven.

§ 1793.2(d)(2)(C). 1 Here, Plaintiff alleges he leased from Defendant a 2024 Mercedes-Benz GLE. 2 Compl. ¶ 5. Plaintiff does not allege the “actual price paid or payable” for the vehicle. 3 See generally id. Plaintiff alleges only that the “amount in controversy exceeds 4 [$35,000], exclusive of interest and costs[.]” Id. ¶ 13. 5 Defendant argues that, according to the Kelley Blue Book, the value of 6 Plaintiff’s 2024 Mercedes-Benz GLE is “$63,700 or higher.” Def.’s Resp. at 5. 7 Defendant, however, does not explain why this amount is in controversy, given the 8 vehicle was leased—not purchased—and Plaintiff may recover only the “actual price 9 paid or payable.”

(d)(2)(B); see also

§ 1793.2(d)(2)(D) 10 (the Song-Beverly Act applies to leased vehicles). Defendant does not submit any 11 evidence regarding the actual amount Plaintiff has paid under the lease agreement. 12 See Def.’s Resp. at 5. Nor does Defendant submit the lease agreement or state the 13 total amount payable thereunder by Plaintiff. See id.; see also Compl. ¶ 5 (“The Lease 14 Agreement [] is in possession of Defendants.”). Lastly, Defendant points to Plaintiff’s 15 allegation that the amount in controversy exceeds $35,000. Def.’s Resp. at 5. 16 Plaintiff’s allegation, however, is not evidence, and Plaintiff does not substantiate, at 17 all, how he arrived at this amount. See Compl. ¶ 13. 18 Defendant, thus, has not met its burden to establish by a preponderance of the 19 evidence that any amount of actual damages is in controversy. See Dart Cherokee, 20 574 U.S. at 89. 21 B. Civil Penalties 22 Defendant next argues Plaintiff’s request for civil penalties of twice the base 23 amount of damages must be included in the amount in controversy calculation. Def.’s 24 Resp. at 5–8. “A plaintiff who establishes that a violation of the Song-Beverly Act 25 was willful may recover a civil penalty of up to two times the amount of actual 26 damages.” Estrada v. FCA US LLC, Case No. 2:20-cv-10453-PA (JPRx),

223249, at *3 (C.D. Cal. Jan. 21, 2021) (citing

(c)) (brackets 28 omitted). However, “[t]he civil penalty under California Civil Code § 1794(c) cannot 1 simply be assumed.” Pennon v. Subaru of Am., Inc., Case No. 2:22-cv-03015-SB 2 (RAOx),

, at *2 (C.D. Cal. June 17, 2022) (remanding action where 3 defendant provided no specific argument or evidence for including a civil penalty in 4 the amount in controversy) (quotation marks omitted). 5 District courts regularly find Song-Beverly Act plaintiffs’ conclusory 6 allegations regarding willfulness are insufficient to place civil penalties in controversy 7 absent specific facts pleaded. See Estrada,

, at *3 (collecting cases 8 “remanding where civil penalties were too speculative for inclusion in the amount-in- 9 controversy”) (quotation marks omitted). This is because “[s]imply assuming a civil 10 penalty award is inconsistent with the principle that the defendant must provide 11 evidence that it is more likely than not that the amount in controversy requirement is 12 satisfied.” Makol v. Jaguar Land Rover N. Am., LLC, Case No. 5:18-cv-03414-NC, 13

, at *3 (N.D. Cal. June 28, 2018) (internal quotation marks 14 removed); see also Khachatryan v. BMW of N. Am., LLC, Case No. 2:21-cv-01290- 15 PA (PDx),

, at *2 (C.D. Cal. Mar. 10, 2021). 16 Here, Defendant relies on Anderson v. Ford Motor Company,

946 (2022), wherein a jury awarded $47,715.60 in actual damages and $30,000 as a 18 Song-Beverly Act penalty. See Def.’s Resp. at 7. As an initial matter, as described 19 above, Defendant fails to establish any actual damages are in controversy. See supra 20 § A; Estrada,

, at *3 (the penalty is capped at “two times the amount 21 of actual damages”). Even assuming arguendo some amount of actual damages was 22 in controversy, Defendant does not explain how the facts in Anderson are similar to 23 the instant facts, such that here it is more likely than not that $30,000 in penalties are 24 in controversy. See Makol,

, at *3. Indeed, Defendant does not 25 identify any case with comparable circumstances, let alone a case awarding civil 26 penalties of twice the actual damages awarded. See Def.’s Resp. at 7. 27 The court, therefore, finds Defendant’s inclusion of civil penalties to be too 28 speculative for inclusion in the court’s amount in controversy calculation. 1 C. Attorney’s Fees 2 Defendant contends Plaintiff’s demand for attorney’s fees provides an 3 additional reason for the court to determine the amount in controversy satisfies the 4 jurisdictional minimum.

at 8–9. In the Ninth Circuit, attorney’s fees awarded 5 under fee-shifting statutes may be considered in assessing the jurisdictional threshold. 6 Gonzales v. CarMax Auto Superstores, LLC,

, 648–49 (9th Cir. 2016). A 7 removing defendant, however, must “prove that the amount in controversy (including 8 attorneys’ fees) exceeds the jurisdictional threshold by a preponderance of the 9 evidence … with summary-judgment-type evidence.” Fritsch v. Swift Transp. Co. of 10 Ariz., LLC,

(9th Cir. 2018). “A district court may reject the 11 defendant’s attempts to include future attorneys’ fees in the amount in controversy if 12 the defendant fails to satisfy this burden of proof.”

13 “While a defendant may meet its burden to establish a reasonable estimate of 14 attorneys’ fees by identifying awards in other cases, those cases must be similar 15 enough to the case at hand that the court can conclude that it is more likely than not 16 that the plaintiff may incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, 17 Case No. 3:21-cv-00857-TWR (AGS),

, at *6 (S.D. Cal. Sept. 24, 18 2021); see also D’Amico v. Ford Motor Co., Case No. 2:20-cv-02985-CJC (JCx), 19

, at *4 (C.D. Cal. May 21, 2020) (recognizing “many cases alleging 20 violations of the [Song-Beverly] Act settle early”). Moreover, a defendant fails to 21 show attorney’s fees are part of the amount in controversy where it “makes no effort 22 to explain what amount of attorney fees might be sought or awarded in th[e] case[.]” 23 Vega v. FCA US, LLC, Case No. 2:21-cv-05128-VAP (MRWx),

, 24 at *4 (C.D. Cal. Aug. 25, 2021). 25 Defendant contends “Plaintiff may obtain an award of attorneys’ fees in the 26 range of $28,017.50 to $87,515.00” and cites several cases wherein attorney’s fees 27 were awarded, including cases wherein the plaintiffs were represented by Plaintiff’s 28 counsel. Def.’s Resp. at 8–9. Defendant, however, does not even attempt to explain 1 | how any of these cases are “similar enough to the case at hand” such that “it is more 2 | likely than not that [Plaintiff] may incur a similar fee award.” Kaplan,

| 4352340, at *6. Given that the removal statute is construed strictly and all doubts are 4 | resolved in favor of remand, the court finds Defendant has failed to demonstrate the 5 || amount in controversy exceeds the jurisdictional minimum based on attorney’s fees. 6 CONCLUSION 7 For the aforementioned reasons, the court finds Defendant has failed to 8 | demonstrate the amount in controversy exceeds $75,000, as required to establish 9 | diversity jurisdiction. The court, therefore, REMANDS the action to the Los Angeles 10 | County Superior Court, Case No. 24STCV25466. All dates and deadlines in this 11 | court are VACATED. The clerk of the court shall close the action administratively. 12 13 IT IS SO ORDERED. 14 15 | Dated: January 2, 2025 16 FERNANDO L. AENLLE-ROCHA United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28