Tremper v. FCA US LLC

Background

Stephen Tremper and Heather Tremper filed the action against FCA US LLC in Monterey County Superior Court and later filed a First Amended Complaint. They alleged that California Civil Code § 1795.6(a)(1) requires a vehicle warranty to be extended by the number of days the vehicle is at an authorized repair facility for repairs or service. They claimed FCA systematically denied warranty coverage by calculating warranty periods from the purchase date without excluding repair days.

The complaint asserted breach of express warranty, violation of the California Consumer Legal Remedies Act, violation of California’s Unfair Competition Law, and claims for restitution, money had and received, unjust enrichment, quasi-contract, and assumpsit. The proposed class covered California residents who purchased or leased specified FCA vehicles in California and were denied warranty coverage during the previous four years because the warranty period had not been extended for time spent at an FCA-authorized repair facility.

FCA removed the case to federal court under the Class Action Fairness Act, or CAFA. CAFA gives federal courts jurisdiction over certain class actions when, among other requirements, the amount in controversy exceeds $5 million, there is minimal diversity between the parties, and the proposed class has at least 100 members. The plaintiffs moved to remand, arguing that FCA had not established the amount-in-controversy requirement.

Analysis

The court held that FCA had the burden to show, by a preponderance of the evidence, that more than $5 million was reasonably at stake. FCA initially relied on the number of FCA vehicle sales or leases in California, an estimate that each vehicle had at least one warranty-related problem, and a daily warranty value of $4.85. FCA later estimated that 1,652,077 vehicles had been sold or leased during the relevant period and calculated $8,012,573.45 in potential damages.

The court found the central assumption unreasonable: FCA treated essentially every relevant purchaser or lessee as part of the proposed class and assumed that each had presented a vehicle for repair, sought coverage after the warranty period, and been denied coverage because FCA failed to add repair days to the warranty period. The complaint, however, limited the proposed class to people who were actually denied coverage for that specific reason. The court also noted that the complaint expressly alleged that the plaintiffs and class members delivered their vehicles for warranty repairs and were refused repairs or diagnosis without charge.

The court rejected FCA’s other estimates as well. It found no basis for using the value of the plaintiffs’ vehicle as a measure of class damages because the complaint did not seek that value. It also found that FCA had not shown how the cost of additional repairs supported the required amount. FCA’s more than $39 million in “goodwill” payments in California since 2016 did not establish the likely damages for the proposed class because FCA offered no evidence connecting the goodwill-payment recipients to the proposed class. Punitive damages and attorney’s fees could be considered, but FCA had no reasonable estimate of actual damages on which to base those calculations.

Disposition

Judge Haywood S. Gilliam, Jr. granted the plaintiffs’ motion to remand, concluding that FCA failed to meet its burden to show that removal was proper under CAFA. The court denied the plaintiffs’ request for attorney’s fees under 28 U.S.C. § 1447(c), finding that FCA had an objectively reasonable basis for seeking removal even though its arguments did not establish federal jurisdiction. The clerk was directed to terminate without prejudice FCA’s motion to dismiss and remand the case to Monterey County Superior Court.