Wang v. FCA US LLC

Background

Yixin Wang and Joseph McCarthy purchased a new or nearly new 2018 Chrysler Pacifica manufactured by FCA US LLC and sold by Fremont Chrysler Dodge Jeep Ram. The contract price was $24,070.98. They alleged that the vehicle had numerous defects and recalls, that repeated repairs were unsuccessful, and that a continuing stalling defect created a safety risk. They also alleged that FCA knew about the defect in similarly equipped vehicles but concealed it and continued selling the vehicles.

Plaintiffs filed the action in Alameda County Superior Court. Their claims included a claim under the Magnuson–Moss Warranty Act, a federal warranty statute, and state-law claims. Defendants removed the action to federal court, arguing that the federal warranty claim supported federal-question jurisdiction. The statute permits enforcement in federal court only when at least $50,000 is in controversy. Plaintiffs moved to remand, meaning to return the case to state court, arguing that defendants had not shown that amount was in controversy.

Court’s Analysis

The court explained that the party seeking removal bears the burden of establishing federal jurisdiction by a preponderance of the evidence, meaning that the jurisdictional facts are more likely true than not. The complaint alleged damages of at least $25,001, but the court held that this allegation alone did not establish that at least $50,000 was in controversy.

Defendants assumed that plaintiffs’ actual damages equaled the vehicle’s full purchase price, that civil penalties would add twice the actual damages, and that punitive damages could reach nine times the purchase price. The court found those assumptions unsupported. If restitution were awarded, a mileage offset would be necessary, so the purchase price did not establish the amount of actual damages. The court also held that defendants could not simply assume that a civil penalty would be awarded; they needed to point to allegations or evidence supporting that assumption. The unsupported punitive-damages assumptions were similarly insufficient.

The court noted that a defendant’s initial removal notice need only plausibly allege that the amount in controversy exceeds the threshold. But once the plaintiff contests that allegation, or the court questions it, evidence is required. The court concluded that defendants had not met that burden.

Ruling

Chief Judge Richard Seeborg granted plaintiffs’ motion to remand. The action was remanded to Alameda Superior Court. The order addressed federal subject-matter jurisdiction and did not decide the merits of plaintiffs’ warranty or state-law claims.