Marx v. FCA US LLC

Background

Joshua and Elizabeth Marx sued FCA US LLC in Santa Clara County Superior Court. They alleged that FCA failed to meet its warranty and repair obligations for a 2022 Chrysler Pacifica Hybrid that allegedly had defects that could cause it to stall, shut off, or lose power. Their complaint asserted four claims under California’s Song-Beverly Consumer Warranty Act and a California common-law fraud claim.

FCA removed the case to federal court based on diversity jurisdiction, which allows a federal court to hear certain disputes between citizens of different states when more than $75,000 is at stake. FCA alleged that the Marxes were California citizens and that FCA was organized under Delaware law, had its main place of business in Michigan, and had no members who were California citizens. The Marxes did not challenge whether the parties were completely diverse; they challenged only the amount in controversy.

The complaint sought damages of at least $35,001, a civil penalty of up to twice the actual damages, punitive damages, attorney fees, costs, and other relief. FCA submitted the vehicle’s retail installment sale contract and its calculation that the Marxes’ actual damages were $79,145.47 after accounting for additional charges and a $6,179.85 deduction for use of the vehicle.

Waiver argument

The Marxes litigated in federal court for approximately eight months before moving to remand, including serving 132 document requests, 25 interrogatories, and a deposition notice with 134 document requests. FCA argued that this delay waived the Marxes’ right to seek remand.

The court rejected that argument. It explained that procedural defects in removal can be waived by delay, but defects involving subject-matter jurisdiction cannot be waived and may be raised at any time. Because the Marxes challenged diversity jurisdiction, their delay did not waive the challenge.

Amount in controversy

The court did not decide whether the complaint itself showed, to a legal certainty, that more than $75,000 was at stake. Instead, it considered FCA’s evidence.

The court accepted FCA’s calculation of $79,145.47 in actual damages. It also included the Song-Beverly Act’s potential civil penalty of up to twice the actual damages, or $158,290.94. Together, the actual damages and possible civil penalty amounted to as much as $237,436.41, exceeding the $75,000 jurisdictional minimum. The court stated that the relevant question was the amount at stake in the litigation, not the amount the Marxes were likely ultimately to recover.

The Marxes also sought attorney fees, and FCA submitted evidence concerning attorney fees in similar cases. The court did not need to rely on that evidence because the damages and possible civil penalty already established that the amount in controversy exceeded $75,000.

Disposition

The court found that FCA had shown by a preponderance of the evidence that the amount in controversy exceeded $75,000. Judge Beth Labson Freeman denied the Marxes’ motion to remand and terminated docket entry 20.