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6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JUAN ERIC ALLEN, No. 2:25-cv-01222-DJC-JDP 12 Plaintiff, 13 v. ORDER DENYING MOTION TO REMAND 14 MERCEDES-BENZ USA, LLC, a Delaware Limited Liability Company; 15 and DOES 1 through 20, inclusive, 16 Defendants. 17 Defendant leased Plaintiff a vehicle that was under warranty against defects. 18 After allegedly discovering nonconformities, Plaintiff brought the car to an authorized 19 service repair facility, which allegedly did not cure the defects. Plaintiff filed suit in 20 state court, Defendant removed to this Court based on diversity jurisdiction, and 21 Plaintiff now seeks remand. While the parties seemingly agree that there is diversity of 22 citizenship, they disagree as to whether the amount in controversy exceeds the 23 jurisdictional threshold, in large part because they dispute whether statutory civil 24 penalties and attorneys’ fees should be included in the calculation. The Court holds 25 that these components should be included and therefore finds that the amount in 26 controversy in this action exceeds $75,000. Accordingly, the Court DENIES Plaintiff’s 27 Motion to Remand (ECF No. 5.). 28 1 BACKGROUND

2 In December 2024, Juan Eric Allen (“Plaintiff”) leased a new car (“the Vehicle”)

3 from Mercedez-Benz USA, LLC (“Defendant”). (Compl. ¶¶ 3, 6, ECF No. 1-1; Lease

4 Agreement, ECF No. 13-2.) Defendant issued express and implied warranties,

5 including that the Vehicle would be free from all defects and that Defendant would

6 perform any necessary repairs. (Compl. ¶ 7.) Plaintiff received the Vehicle and 7 allegedly discovered “serious defects and nonconformities to warranty” relating to the 8 electrical and engine systems. (Id. ¶ 9.) Plaintiff alleges that, on multiple occasions, he 9 presented the Vehicle to Defendant for repair, and each time Defendant failed to 10 conform the Vehicle to the applicable warranties. (Id. ¶ 18.) Plaintiff then filed suit, 11 bringing claims for violation of California’s Song-Beverly Act. (Id. ¶¶ 24–49.) 12 Plaintiff originally field suit in the Superior Court of California, County of 13 Sacramento. (Notice of Removal, ECF No. 1.) Defendant then timely removed the 14 case. (See id.; Fed. R. Civ. P. 6(a)(1)(C).) Defendant asserted that the Court has 15 diversity jurisdiction, alleging that Plaintiff is a citizen of California and Defendant is a 16 citizen of Delaware, Georgia, and Michigan. (Notice of Removal at 2–3.) Though 17 Plaintiff did not plead an exact amount in controversy, Defendant alleged that 18 because Plaintiff could reasonably receive civil penalties and attorneys’ fees for his 19 claims, the amount in controversy exceeds $75,000. (Id. at 3–4.) 20 Plaintiff now moves to remand the case. (Mot. at 1.) While conceding that 21 there is complete diversity of citizenship, Plaintiff maintains that the amount in 22 controversy does not satisfy the jurisdictional threshold, principally arguing that civil 23 penalties and attorneys’ fees should not be included in this calculation. (Id. at 4–7.) 24 Defendant counters that that those components are proper to include in the total 25 amount at stake in this litigation. (Opp’n at 3–9, ECF No. 13.) Pursuant to Local Rule 26 230(g), this Motion is submitted without oral argument. 27 LEGAL STANDARD 28 Under

, a defendant may remove a civil action from state 1 court to federal court if there exists original jurisdiction. City of Chicago v. Int’l Coll. of

2 Surgeons,

(1997). Courts strictly construe the removal statute

3 against removal and federal jurisdiction must be rejected if there is any doubt as to

4 the right of removal. Gaus v. Miles, Inc.,

(9th Cir. 1992). The party

5 removing a case to federal court “has the burden to prove, by a preponderance of the

6 evidence, that removal is proper.” Geographic Expeditions, Inc. v. Estate of Lhotka ex 7 rel. Lhotka,

(9th Cir. 2010). 8 DISCUSSION 9 I. Request for Judicial Notice 10 A district court may take judicial notice of a fact that is “not subject to 11 reasonable dispute because it can be accurately and readily determined from sources 12 whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). 13 Defendant requests the Court take judicial notice of other court proceedings. 14 (Request for Judicial Notice, ECF No. 14.) Plaintiff argues that this request is 15 inappropriate because: (1) the proceedings are not relevant; (2) the documents 16 contain disputed facts; and (3) the documents cause undue prejudice and confusion. 17 (Reply at 3–4, ECF No. 15.) The Court finds these arguments unpersuasive. 18 First, the other proceedings are relevant because they relate to attorneys’ fees 19 in Song-Beverly actions. (See Request for Judicial Notice.) A court “may take notice of 20 proceedings in other courts, both within and without the federal judicial system, if 21 those proceedings have a direct relation to matters at issue.” Trigueros v. Adams, 658

, 987 (9th Cir. 2011) (citation omitted). Because the other proceedings have 23 a direct relation to this action, they are appropriate for judicial notice. 24 Second, Plaintiff does not explain how the other proceedings contain disputed 25 facts. (See Reply at 3.) On the contrary, these proceedings are appropriate for judicial 26 notice because they “can be accurately and readily determined from sources whose 27 accuracy cannot reasonably be questioned.” See Fed. R. Evid. 201(b)(2). 28 Finally, Plaintiff argues that the other court proceedings “mislead[] the Court 1 and improperly suggest[] an entitlement to extraordinary damages absent specific

2 pleading or factual basis.” (Reply at 4.) But Defendant is merely pointing out how

3 courts typically handle attorneys’ fees in Song-Beverly actions, which it is entitled to do

4 through judicial notice of other court proceedings. Plaintiff furthers that a law firm

5 involved in one of the requested proceedings is under investigation for overbilling.

6 (Id.) The Court fails to see why this allegation warrants denying Defendant’s request. 7 However, because the Court need not consider the other court proceedings to 8 reach its decision below, the Court denies as moot Defendant’s Request for Judicial 9 Notice (ECF No. 14.). 10 II. Consideration of Post-Removal Filings 11 Plaintiff argues that Defendant improperly introduced evidence after filing the 12 notice of removal. (Reply at 1.) “Defective allegations of jurisdiction may be 13 amended, upon terms, in the trial or appellate courts.”

. While a 14 defendant must file a notice of removal within thirty days of service, they “may amend 15 the Notice of Removal after the thirty day window has closed to correct a defective 16 allegation of jurisdiction.” ARCO Env’t Remediation, L.L.C. v. Dep’t of Health & Env’t 17 Quality of Montana,

(9th Cir. 2000) (cleaned up). Accordingly, “a 18 district court may consider later-provided evidence as amending a defendant’s notice 19 of removal.” Gen. Dentistry For Kids, LLC v. Kool Smiles, P.C.,

, 636 20 (9th Cir. 2010); see also Cohn v. Petsmart, Inc.,

, 840 n.1 (9th Cir. 2002) 21 (“The district court did not err in construing [defendant’s] opposition as an 22 amendment to its notice of removal.”). 23 In light of this precedent, the Court construes Defendant’s post-removal filing 24 and evidence as amending the Notice of Removal. The Court therefore disagrees 25 with Plaintiff and considers all filings in this action to reach its decision. 26 III. Diversity Jurisdiction 27 A court may exercise diversity jurisdiction over a matter where there is diversity 28 of citizenship and the amount in controversy exceeds $75,000.

(a). 1 The Court addresses these requirements in turn.

2 A. Diversity of Citizenship

3 An action may be removed to federal court based on diversity jurisdiction only

4 where there is complete diversity of citizenship between the parties. Hunter v. Phillip

5 Morris USA,

(9th Cir. 2009) (citing

(a), 1441(b)).

6 For diversity purposes, a person is a citizen of a state if he is a citizen of the United 7 States and domiciled in that state. Kantor v. Wellesley Galleries, Ltd.,

, 8 1090 (9th Cir. 1983). An LLC is a citizen of the state of which its owners or members 9 are citizens. Johnson v. Columbia Props. Anchorage, LP,

(9th Cir. 10 2006). “In determining whether a civil action is removable on the basis of [diversity 11 jurisdiction], the citizenship of defendants sued under fictitious names shall be 12 disregarded.”

(b)(1). 13 Defendant alleges Plaintiff is a citizen of California, which is supported by 14 Plaintiff’s Lease Agreement listing his address in California. (Notice of Removal at 2; 15 Lease Agreement.) Plaintiff does not contest this allegation or present any evidence 16 to the contrary. As such, the Court finds for purposes of this motion that Plaintiff is a 17 citizen of California. Plaintiff alleges Defendant is a Delaware L.L.C. (Compl. ¶ 1.) 18 Defendant corroborates this allegation, pleading that its principal place of business is 19 in Georgia. (Notice of Removal at 2.) Defendant further states that its only member, 20 Mercedes-Benz North America Corporation, is a Delaware corporation with its 21 principal place of business in Michigan. (Id. at 3.) Neither party presents any 22 evidence suggesting that Defendant is a citizen of any other state. The Court 23 therefore finds that Defendant is not a citizen of California, meaning that there is 24 complete diversity of citizenship. 25 B. Amount in Controversy 26 Where, as here, the complaint does not include an amount in controversy, the 27 notice of removal must include “a plausible allegation that the amount in controversy 28 exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co. v. Owens, 1

, 89 (2014). “[T]he amount in controversy is not limited to damages

2 incurred prior to removal . . . but rather is determined by the complaint operative at

3 the time of removal and encompasses all relief a court may grant on that complaint if

4 the plaintiff is victorious.” Fritsch v. Swift Transportation Co. of Arizona, LLC,

(9th Cir. 2018) (internal quotations and citation omitted). As such, the Ninth

6 Circuit recognized that “the amount in controversy reflects the maximum recovery the 7 plaintiff could reasonably recover.” Arias v. Residence Inn by Marriott,

, 8 927 (9th Cir. 2019) (citation omitted) (emphasis original). 9 To determine the amount in controversy, the Court addresses the following 10 relevant components: (1) damages; (2) civil penalties; (3) mileage offset that 11 Defendant can recover; and (4) attorneys’ fees. 12 1. Damages 13 Plaintiff alleges that the “amount in controversy” exceeds $35,000. (Compl. 14 ¶ 19.) The Court construes this allegation as alleging that the amount of Plaintiff’s 15 restitution damages is at least $35,000 because Plaintiff states that “[i]n addition” to 16 this “amount in controversy,” he seeks damages from Defendants “for incidental, 17 consequential, exemplary, and actual damages including interest, costs, and actual 18 attorneys’ fees.” (Id.) In his Prayer for Relief, Plaintiff seeks rescission of the contract, 19 restitution of all monies expended, damages, civil penalty in the amount of two times 20 his actual damages, and attorneys’ fees. (Id. at 10.) There is no indication that Plaintiff 21 included all these forms of recovery in his $35,000 calculation. On the contrary, 22 Plaintiff states in his briefing that he ”requested restitution damages for the lease value 23 of their [sic] vehicle in excess of $35,000 and civil penalties of twice Plaintiff’s actual 24 damages, totaling over $75,000.” (Mot. at 4.) As such, the Court finds that Plaintiff’s 25 restitution damages are at least $35,000. Though Plaintiff pleads that he seeks other 26 forms of damages, the Court assumes for the purposes of this motion that Plaintiff’s 27 overall damages are $35,000. (See Compl. ¶ 19.) 28 //// 1 2. Civil Penalties

2 Potential punitive damages are part of the amount in controversy. Gibson v.

3 Chrysler Corp.,

(9th Cir. 2001). The Song-Beverly Act provides for

4 civil penalties up to two times the amount of damages.

(c), (e).

5 Defendant correctly points out that California courts have held that civil penalties

6 under Song–Beverly are akin to punitive damages and therefore are treated as such. 7 See Opp’n at 4 (citing Suman v. Superior Court,

(1995); 8 Kwan v. Mercedes–Benz of N. Am., Inc.,

(1994); 9 Troensegaard v. Silvercrest Industries, Inc.,

, 226–28 (1985)). 10 Accordingly, courts in this circuit have held that it is proper to include Song-Beverly 11 civil penalties in the amount in controversy calculation. Canesco v. Ford Motor Co., 12

, 902 (S.D. Cal. 2021) (collecting cases); see also Carillo v. FCA 13 USA, LLC,

, 1004 (C.D. Cal. 2021) (holding that “the amount in 14 controversy estimate may include a two-times civil penalty” under Song-Beverly). 15 Though Plaintiff requests a civil penalty in the amount of two times his actual 16 damages, see Compl. at 10, he argues that it is inappropriate to include this penalty 17 here because it is “speculative” to calculate a civil penalty without knowing a precise 18 amount of damages. (Mot. at 5.) But Plaintiff himself states that his restitution 19 damages are at least $35,000. (Id. at 4.) Plaintiff thus fails to explain why it is 20 “speculative” to include a civil penalty of two times the amount of damages that 21 Plaintiff himself considers the floor of his overall damages. 22 The Court finds that Plaintiff could reasonably recover a civil penalty. A plaintiff 23 can recover a civil penalty under Song-Beverly if the defendant’s failure to comply with 24 a warranty was “willful.”

(c). Plaintiff alleges that, on multiple 25 occasions, he presented the Vehicle to Defendant for repair, and each time Defendant 26 failed to conform the Vehicle to the applicable warranties. (Compl. ¶ 18.) He 27 therefore alleges that Defendant’s failure to cure the defects “was intentional and 28 justifies an award of a Civil Penalty.” (Id. ¶ 35.) Based on these allegations, the Court 1 finds that Plaintiff could show that Defendant’s alleged violation of warranty was willful

2 such that he could reasonably recover a civil penalty.1 Accordingly, the Court must

3 account for a civil penalty of two times the amount of damages to determine Plaintiff’s

4 “maximum recovery.” See Arias,

. Given the Court’s calculation of

5 Plaintiff’s damages at $35,000, the Court adds a civil penalty of $70,000, bringing the

6 amount in controversy to $105,000. 7 3. Mileage Offset 8 Under Song-Beverly, when a defendant manufacturer pays restitution to a 9 plaintiff buyer: 10 the amount to be paid by the manufacturer to the buyer may be reduced by the manufacturer by that amount directly attributable to use by the 11 buyer prior to the time the buyer first delivered the vehicle to the 12 manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. The 13 amount directly attributable to use by the buyer shall be determined by 14 multiplying the actual price of the new motor vehicle paid or payable by the buyer, including any charges for transportation and manufacturer- 15 installed options, by a fraction having as its denominator 120,000 and having as its numerator the number of miles traveled by the new motor 16 vehicle prior to the time the buyer first delivered the vehicle to the 17 manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. 18

(d)(2)(C). 19 Accordingly, the Court must reduce the amount in controversy by the mileage 20 offset to which Defendant would be entitled. The parties disagree over the price of 21 the Vehicle. Defendant provides a Carfax report that estimates the current value of the 22 Vehicle at $61,530.00. (Notice for Removal, Ex. B.) Plaintiff argues that this evidence 23 lacks foundation. (Mot. at 5.) The Court agrees, finding that the Carfax report simply 24 lists the make of the car and the vehicle identification number. (See Notice of 25 Removal, Ex. B.) Defendant does not explain why the Court can rely on this report. 26 In its opposition brief, Defendant no longer relies on the Carfax report and 27 1 Plaintiff does not argue that he could not reasonably recover a civil penalty, and for good reason: that 28 would undercut his explicit demand for one. (See Compl. at 10.) 1 instead utilizes the total value of the lease, which was $81,551.08. (Opp’n at 3 (citing

2 Lease Agreement).) Plaintiff counters that this number is inappropriate because it only

3 represents the amount payable under the Lease Agreement, not the amount that

4 Plaintiff paid. (Reply at 2.) But under Song Beverly, the statute explicitly states that the

5 value of the vehicle used in the formula is “the actual price of the new motor vehicle

6 paid or payable by the buyer.”

(d)(2)(C). Because the statute 7 directs courts to use the amount “payable by the buyer,” the Court uses the total 8 amount of payments due under the lease, which totaled $81,551.08. 9 Plaintiff leased the Vehicle with 62 miles on the odometer, and his first 10 warrantable concern occurred at 479 miles, meaning Plaintiff drove 417 miles. 11 (Gallagher Decl. ¶¶ 2–3, ECF No. 13-1.) Because this mileage is the amount directly 12 attributable to Plaintiff when he “first delivered the vehicle to the manufacturer or 13 distributor, or its authorized service and repair facility for correction of the problem 14 that gave rise to the nonconformity,” the Court must use this milage to calculate 15 Defendant’s reduction. See

(d)(2)(C). Using the formula 16 provided for in the statute, Defendant correctly calculates that it would be entitled to 17 reduce judgment by $283.39 ($81,551.08 x (417/120,000)) . (See Opp’n at 7.) 18 Accounting for this reduction, the revised amount in controversy is $104,716.61. 19 4. Attorneys’ fees 20 Finally, where attorneys’ fees are recoverable under state law, they are included 21 in the amount in controversy. Galt G/S v. JSS Scandinavia,

, 1155–56 22 (9th Cir. 1998). Because Plaintiff brings claims pursuant to Song-Beverly, he may 23 recover attorneys’ fees if he prevails.

(d). Though Plaintiff seeks 24 attorneys’ fees, see Compl. at 10, he argues that their inclusion in the amount in 25 controversy is inappropriate because there is not “competent evidence of the likely 26 fees in this case, especially given its early stage.” (Mot. at 6. (citing Lowdermilk v. U.S. 27 Bank Nat’l Ass’n,

(9th Cir. 2007), overruling on other grounds 28 recognized by Rodriguez v. AT & T Mobility Servs. LLC,

(9th Cir. 1 2013)).) However, Lowdermilk does not support Plaintiff's position. The Ninth Circuit 2 there held that because the state statute provided for attorneys’ fees, they are 3 included in the amount of controversy. Lowdermilk,

. The court said 4 nothing about calculating a particular amount of attorneys’ fees. 5 In Song-Beverly actions, courts in this circuit have held that “[e]stimating a fee 6 award of 25% of plaintiffs’ recovery is reasonable in determining the amount in 7 controversy.” Boone v. FCA US LLC, No. 21-CV-01591-JD,

, at *1 8 (N.D. Cal. Nov. 16, 2021); see also Lucas v. Michael Kors (USA), Inc., No. CV-18-1608- 9 MWEF (MRWx),

, at *12 (C.D. Cal. May 9, 2018) (“[O]ther courts in this 10 | Circuit have similarly applied a [25%] benchmark figure to calculate attorneys’ fees in 11 [Class Action Fairness Act] wage and hour cases.” (collecting cases)). The Court 12 agrees that estimating an attorneys’ fees award of 25% is reasonable. As such, 13 Plaintiff's counsel would be entitled to $26,179.15. 14 Adjusting for attorneys’ fees, the total amount in controversy is $130,895.76. 15 Because the amount in controversy exceeds the jurisdictional threshold, and because 16 | there is complete diversity of citizenship, the Court finds that it has diversity 17 || jurisdiction over this case. 18 CONCLUSION 19 For the reasons set forth above, the Court DENIES Plaintiff's Motion to Remand 20 (ECF No. 5.). The hearing scheduled for July 17, 2025, at 1:30 p.m. in Courtroom 7 21 before District Judge Daniel J. Calabretta is VACATED. 22 53 IT IS SO ORDERED. 24 | Dated: _June 23, 2025 “Darel J Cob tto— Hon. Daniel alabretta 25 UNITED STATES DISTRICT JUDGE 26 27 28 10