Vande Steeg v. Ford Motor Company

Background

Albert Vande Steeg and Lucinda Vande Steeg sued Ford Motor Company and Chino Hills Ford over alleged defects in a 2013 Ford F-150. Plaintiffs alleged that the vehicle was covered by express warranties, that defects developed during the warranty period, and that Defendants failed to repair the vehicle after a reasonable number of opportunities.

Plaintiffs filed seven causes of action in California Superior Court for Santa Clara County, including claims under California’s Song-Beverly Consumer Warranty Act, breach of express and implied warranties, fraud by omission, and negligent repair. Plaintiffs later stated that the implied-warranty claim against Chino Hills Ford was a typographical error and acknowledged that Chino Hills Ford did not sell them the vehicle.

Ford and Chino Hills Ford removed the case to federal court based on diversity jurisdiction. Diversity jurisdiction allows a federal court to hear a civil case involving citizens of different states when more than $75,000 is in dispute. Plaintiffs moved to remand, meaning they asked the federal court to return the case to state court.

Amount in Controversy

The court held that Defendants had the burden to prove, more likely than not, that the amount in controversy exceeded $75,000. Plaintiffs’ complaint alleged damages of at least $25,000.01 and sought actual damages plus a civil penalty of twice the actual damages. The court found the complaint’s use of the word “damages” ambiguous and held that Defendants had not provided a sufficient basis for treating the $25,000.01 allegation as actual damages separate from civil penalties.

The court also rejected Defendants’ reliance on unspecified incidental and consequential damages, punitive damages, and prejudgment interest because Defendants did not quantify those amounts. Defendants cited a suggested retail price of $50,830 for the vehicle, but the court found that the retail price did not establish the actual purchase price or resolve the amount in controversy.

Defendants also argued that attorney’s fees might approach or exceed $50,000. The court recognized that future attorney’s fees may be included in the amount in controversy when authorized by law, but held that Defendants still had to prove the likely amount. A declaration stating that fees regularly exceed $50,000 in similar cases, together with an example from another Ford case, did not provide enough information to show that this case would generate at least $50,000 in fees. The court found that the other case involved circumstances that may have greatly increased its fees and was not shown to be comparable.

Disposition

The court found that Defendants had established only that at least $25,000.01 was in dispute. Because that amount did not exceed the $75,000 requirement for diversity jurisdiction, the court held that Defendants had not met their burden to establish federal jurisdiction.

Judge Lucy Koh granted Plaintiffs’ motion to remand. The opinion addressed the federal court’s jurisdiction and did not decide the merits of Plaintiffs’ underlying warranty, fraud, or negligent-repair claims.