Laky v. Ford Motor Company

Background

Sandra Laky sued Ford Motor Company and Ford of Escondido in Santa Clara Superior Court. She alleged that a 2010 Mercury Mariner she purchased in June 2015 had defects involving, among other areas, its engine, transmission, axle seat, and clutch, and that Ford of Escondido could not repair the vehicle in accordance with industry standards.

Her original complaint asserted seven causes of action under the California Song-Beverly Consumer Warranty Act, the federal Magnuson-Moss Warranty Act, and a negligent-repair theory. After the parties stipulated to dismissal of all Song-Beverly claims, two causes of action remained: Laky’s Magnuson-Moss claim against Ford and her negligent-repair claim against Ford of Escondido.

Ford had removed the case to federal court, asserting federal-question jurisdiction based on the Magnuson-Moss claim, supplemental jurisdiction over related state claims, and diversity jurisdiction based on alleged improper joinder. Laky moved to remand, arguing that Ford had not shown that the amount in controversy met the federal warranty statute’s $50,000 threshold or that Ford of Escondido had been fraudulently joined. Ford did not oppose the motion.

Federal-Question Jurisdiction

The Magnuson-Moss Warranty Act permits a consumer to sue for damages and other relief but generally does not permit a federal action when the amount in controversy for all claims is less than $50,000, excluding interest and costs. The party invoking federal jurisdiction bears the burden of establishing that the requirements for federal jurisdiction are met.

The court held that Ford had not shown that the amount in controversy reached $50,000. Laky’s complaint alleged damages “in a sum to be proven at trial in an amount that is not less than $25,001.00.” The court found that this allegation was speculative because it appeared only once and used ambiguous language. The court also noted that Laky no longer sought Song-Beverly civil penalties after those claims were dismissed, and Ford’s removal arguments relied on the earlier claims for civil penalties and attorney fees.

Diversity Jurisdiction

The court stated that, because Ford had not established the $50,000 amount required for the Magnuson-Moss claim, Ford also could not establish by a preponderance of the evidence that the amount in controversy exceeded $75,000 for diversity jurisdiction. The court therefore did not address Ford’s argument that Ford of Escondido had been fraudulently joined.

Disposition

The court granted Laky’s motion to remand. It remanded the case to the Superior Court of California for the County of Santa Clara and directed the clerk to close the federal case. Judge Edward J. Davila did not decide the underlying warranty or negligent-repair claims.