Perkins v. Mercedes-Benz USA, LLC

Background

Mitchell Perkins sued Mercedes-Benz USA, LLC (MBUSA) and Mercedes-Benz of Marin (MB-Marin). He alleged that MBUSA breached express and implied warranties under California’s Song-Beverly Consumer Warranty Act and the federal Magnuson-Moss Warranty Act. He also alleged that MB-Marin negligently stored, prepared, and repaired the vehicle. The dispute involved a 2014 Mercedes-Benz GLK 250 that Perkins first presented for repair in 2016, when it had 43,248 miles.

Perkins originally filed the action in the Superior Court for the County of Marin. MBUSA removed it to federal court, asserting federal-question jurisdiction based on the Magnuson-Moss claim. Perkins moved to remand, arguing that MBUSA had not established unanimous consent to removal and that the amount in controversy did not meet the Magnuson-Moss Act’s $50,000 jurisdictional minimum. The defendants separately moved to dismiss and/or strike portions of the complaint under Rules 12(b)(1), 12(b)(6), and 12(f) of the Federal Rules of Civil Procedure.

Consent to Removal

The court rejected Perkins’s consent argument. A challenge to a removal defect other than subject-matter jurisdiction must be made within 30 days after removal. MBUSA removed the case on June 15, 2022, but Perkins did not move to remand until August 10, 2022. The court held that the consent-based challenge was therefore waived.

The court also held that the challenge would fail even if it had been timely. MBUSA and MB-Marin shared counsel, jointly filed the motion to dismiss and the opposition to remand, and MB-Marin never objected to removal. Based on those circumstances, the court inferred unanimous consent.

Amount in Controversy

The Magnuson-Moss Act requires the amount in controversy to exceed $50,000, excluding interest and costs. Because Perkins’s complaint alleged damages of “not less than $25,001” while separately requesting actual damages, civil penalties, and attorney fees, the court found the complaint ambiguous about whether the total amount exceeded $50,000. The defendants therefore had to show, by a preponderance of the evidence, that the amount was more likely than not above that threshold.

The defendants estimated the potential recovery at $78,722. They relied in part on a Kelley Blue Book estimate, but the court found that evidence too speculative. The estimate used a hypothetical vehicle with 100 miles, in the Los Angeles market, and the record did not show that those assumptions matched Perkins’s vehicle or circumstances. The submitted materials also appeared inconsistent about the lowest trade-in value. The court further found that the defendants had not accounted for the mileage offset—the reduction in recoverable damages based on the vehicle’s use before the first repair attempt.

Because the defendants had not established the actual damages, the court also could not reasonably estimate Song-Beverly civil penalties, which can be twice the actual damages. The court did accept an estimated $15,800 in attorney fees based on evidence concerning Perkins’s counsel’s hourly rates and prior fee awards. But even including that amount, the defendants had not shown that the total amount in controversy was more likely than not at least $50,000.

Disposition

The court held that it lacked subject-matter jurisdiction and granted Perkins’s motion to remand the case to the Superior Court for the County of Marin. The court denied as moot the defendants’ motion to dismiss and/or strike because the case was being remanded. Judge Charles Breyer also vacated the scheduled hearing.