Luna v. FCA US LLC

Background

Felipe Luna sued FCA US LLC and initially named Stevens Creek Chrysler Jeep Dodge and Does 1 through 10 as defendants. The lawsuit arose from Luna’s purchase of an allegedly defective 2012 Jeep Wrangler and asserted claims under California’s Song-Beverly Consumer Warranty Act and for fraudulent inducement or concealment.

The case began in California Superior Court on November 12, 2019. FCA and Stevens Creek first removed it to federal court, asserting that Luna had fraudulently joined Stevens Creek. The court later granted Luna’s motion to remand. After Luna voluntarily dismissed Stevens Creek, FCA removed the case again on February 19, 2021, asserting diversity jurisdiction.

Luna moved to remand, arguing that FCA had not shown that more than $75,000 was in controversy. He also argued that the second removal violated the one-year limit for removing a diversity case. Luna requested judicial notice of five filings from other federal cases. The court granted that request as to the filings themselves but did not accept disputed facts in them as judicially established.

Removal deadline

The court stated that a diversity-based removal generally must occur within one year after the state-court action begins, unless the plaintiff acted in bad faith. Because Luna filed the original complaint on November 12, 2019, the court concluded that the second removal appeared to be untimely.

However, the one-year limit is a procedural requirement rather than a jurisdictional requirement. A procedural defect must be raised within 30 days after the notice of removal. Luna filed his motion more than two months after FCA’s February 19, 2021 notice of removal. The court therefore held that Luna forfeited this procedural challenge. The court did not decide FCA’s argument that Luna had acted in bad faith by originally naming Stevens Creek.

Amount in controversy

The court separately considered whether it had subject-matter jurisdiction based on diversity of citizenship. The parties did not dispute that they were diverse. The remaining question was whether the amount in controversy exceeded $75,000.

The court found that Luna’s complaint did not establish that amount on its face. The complaint alleged damages of at least $25,001 and requested civil penalties, but the court found that this wording was too speculative and did not clearly show whether the $25,001 figure included or excluded the requested penalties and other relief.

The court then applied the preponderance-of-the-evidence standard, meaning FCA had to show that it was more likely than not that the amount in controversy exceeded $75,000. FCA submitted the vehicle’s retail installment sales contract and repair records. The contract listed a total cash price of $43,225. The court applied a mileage offset of $2,528.30 for Luna’s use of the vehicle before presenting it for repair, resulting in estimated actual damages of at least $40,696.70.

Because Luna alleged that FCA’s failure to comply with the warranty was willful and sought civil penalties of up to twice his actual damages, the court included potential civil penalties of at least $81,393.40 in the amount-in-controversy calculation. The combined estimate was at least $122,090.10. The court held that this exceeded the $75,000 requirement for diversity jurisdiction.

Disposition

Judge Lucy H. Koh denied Luna’s motion to remand the case to the California Superior Court for Santa Clara County. The case therefore remained in federal court. The ruling addressed removal timing and federal jurisdiction; it did not decide whether Luna would ultimately prevail on his warranty or fraud claims.