CLAY v. FCA US LLC

Background

Tommie L. Clay filed the action in state court against FCA US LLC. He alleged that he purchased a 2013 Dodge Challenger, entered into a warranty contract with FCA, and experienced defects and nonconformities involving, among other things, the vehicle’s electrical system and engine. Clay alleged that FCA could not repair the vehicle after a reasonable number of attempts and that FCA’s failure was willful. The complaint asserted four state-law causes of action.

FCA opposed Clay’s motion to remand. The court stated that the parties’ citizenship was diverse: Clay was a California citizen, while FCA was a citizen of the Netherlands and the United Kingdom. The remaining issue was whether the amount in controversy exceeded $75,000, as required for diversity jurisdiction in this case.

Court’s Analysis

The complaint alleged damages of at least $25,001 and sought a civil penalty of twice Clay’s actual damages. The court concluded that the complaint treated damages and penalties as separate forms of relief. Therefore, FCA showed that the complaint sought at least $25,001 in damages plus at least $50,002 in civil penalties, for a total of at least $75,003.

The court rejected Clay’s arguments that FCA had not shown he could establish an entitlement to civil penalties or that FCA’s defenses might reduce his recovery below $75,000. When determining the amount in controversy, the court explained, the amount claimed controls when the claim was made in good faith. Potential defenses that might reduce the eventual recovery are not considered at that stage.

The court also noted undisputed evidence that the reimbursement amount sought for the vehicle could be $34,725.18. If doubled for the civil penalty and added to the damages, that amount would produce a total potential recovery of $104,175.54.

Disposition

Judge Maxine M. Chesney denied Clay’s motion to remand. The court also vacated the hearing scheduled for October 21, 2022.