Soto v. Future Motion, Inc.

Background

Elijah Soto purchased a Onewheel+ XR single-wheeled electric skateboard from Future Motion, Inc.’s website in 2020. He alleged that the motor cut in and out while he was riding the board. After Future Motion repaired the board, Soto alleged that the motor cut off again. Future Motion told him that the board had stripped screws and loose bolts resulting from a third-party tire change and demanded payment for parts, labor, and shipping before returning it. Soto filed a product-defect action in Santa Cruz County Superior Court on behalf of a proposed class of XR owners.

Future Motion removed the case to federal court. Soto later filed a corrected first amended complaint. Future Motion moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which concerns whether a complaint adequately states a claim, and moved to strike the class allegations. At the court’s request, the parties also submitted briefing about federal subject-matter jurisdiction, meaning the court’s authority to hear the case.

Jurisdictional Issue

Future Motion relied on the Class Action Fairness Act, a federal law that can give federal courts jurisdiction over certain class actions. The statute requires minimal diversity of citizenship, at least 100 proposed class members, and more than $5 million in controversy. The court focused on minimal diversity.

For diversity purposes, the court explained that a corporation is a citizen of its state of incorporation and its principal place of business. The parties did not dispute that Future Motion was a California citizen. The original complaint defined the proposed class to include people in the United States and its territories who owned a class vehicle in California. The amended complaint instead defined the class as people in California who owned or had owned a class vehicle and were currently domiciled in California.

The court considered the amended complaint in deciding jurisdiction. Ordinarily, whether removal was proper is determined from the pleading filed in state court. But the Ninth Circuit permits consideration of a post-removal amendment when it clarifies, rather than changes, the original allegations. The court concluded that the amended complaint clarified the original class definition. It found the original phrase concerning people who owned a vehicle in California ambiguous and noted that the amended complaint was consistent with the original complaint’s focus on California claims and harm suffered in California.

Because the amended class definition included only people domiciled in California, and Future Motion was also a California citizen, the court concluded that minimal diversity was absent. The court therefore found no need to consider the statute’s other class-action exceptions.

The court also rejected the idea that the parties’ changing positions could establish jurisdiction. It emphasized that the court has an independent duty to confirm its jurisdiction and that the parties cannot create federal jurisdiction by agreement or inaction.

Disposition

The court concluded that it lacked subject-matter jurisdiction and remanded the case to the Superior Court of California for the County of Santa Cruz. It denied Future Motion’s motion to dismiss and motion to strike directed at the amended complaint as moot. The court did not decide the merits of Soto’s product-defect claims or the propriety of the proposed class.