Dunn-Ruiz v. Volkswagen Group of America, Inc.

Background

Sonia Dunn-Ruiz sued Volkswagen Group of America, Inc. in state court over a 2016 Audi A7 diesel. The opinion says her complaint asserted claims involving personal injuries, an intentional tort, product liability, fraud, breach of warranty, and breach of the covenant of good faith and fair dealing. Volkswagen removed the case to federal court based on diversity jurisdiction, which requires that the amount in controversy exceed $75,000 and that the parties be citizens of different states.

Dunn-Ruiz moved to remand, or return, the case to state court. She argued that the action concerned a single vehicle that she purchased for $57,000 and that the amount at issue was below the federal jurisdictional threshold. She identified actual damages limited to $25,000, pain-and-suffering damages limited to $25,000, and an unspecified amount of punitive damages. She also stated that she would not seek total damages exceeding $75,000.

Analysis

Because the complaint did not state a specific amount of damages beyond identifying the case as an unlimited civil case seeking more than $25,000, Volkswagen had the burden to prove by a preponderance of the evidence that the amount in controversy exceeded $75,000. The court accepted that Volkswagen had shown at least $50,000 was at stake based on Dunn-Ruiz’s statement of damages.

The court did not find the separate reservation of up to $24,999 in punitive damages sufficient. It explained that the reservation applied to a possible default-judgment proceeding, was unlikely to apply given Volkswagen’s active litigation, and was not strong evidence that the punitive-damages amount was actually in controversy.

Volkswagen also relied on summaries of two other cases involving odors in vehicles that reportedly produced verdicts exceeding $75,000. The court found that Volkswagen did not explain how those cases were factually comparable to Dunn-Ruiz’s case. The court noted differences involving the vehicles’ purchase prices and damages, and it found that Volkswagen had not addressed the facts supporting punitive damages in those cases. The court therefore concluded that Volkswagen relied on speculation rather than competent proof and had not established the required amount in controversy.

Ruling

Judge Phyllis J. Hamilton granted Dunn-Ruiz’s motion to remand and remanded the action to the Contra Costa County Superior Court. The court vacated the February 12, 2020 hearing. The opinion did not resolve whether Dunn-Ruiz would prevail on her warranty, personal-injury, product-liability, fraud, or other claims.