Pena v. General Motors Company

Background

Vivian Pena and Francisco Fernandez, representing themselves, sued General Motors Financial Company Inc. and Mary Barra. They alleged that a brake master cylinder pump in a 2015 Chevrolet Suburban they leased developed a problem about a year and a half into the lease. According to the complaint, a Chevrolet dealership told them that General Motors knew about the issue and had sent a memorandum to participating dealerships, but the plaintiffs had not been told about it and had not received a recall notice.

The plaintiffs alleged that the vehicle became unsafe to drive, that they had to park it for the rest of the lease, and that they continued making lease payments and paying for insurance. They sought a full refund of vehicle expenses, including lease payments, rental-vehicle costs, and insurance costs. The defendants filed a motion to dismiss and/or for summary judgment.

Jurisdictional Issue

The defendants argued that the court lacked subject-matter jurisdiction under the diversity-jurisdiction statute. Diversity jurisdiction generally requires parties from different states and more than $75,000 in controversy. The parties did not dispute the citizenship requirement; the dispute concerned the amount at stake.

The court explained that the plaintiffs had to plausibly show that their claims placed more than $75,000 in controversy. Under New York’s motor-vehicle warranty law, the potential recovery described by the defendants included the lease price, the trade-in allowance, and certain fees and charges. The lease documents showed total payments of $37,851.90 and a net trade-in allowance of $1,150, or approximately $39,000 altogether.

The plaintiffs responded that the lease, insurance, and rental-vehicle costs exceeded $75,000. The court found that this response was conclusory. The plaintiffs did not identify specific causes of action that would allow the additional damages or present arguments or evidence showing that the defendants’ calculation was incorrect. The court therefore held that the plaintiffs had not adequately pleaded the amount in controversy and that it lacked subject-matter jurisdiction.

Disposition

Judge Nelson S. Roman granted the defendants’ motion to dismiss the complaint without prejudice. The court granted the plaintiffs leave to file an amended complaint consistent with the opinion by May 24, 2022. The order stated that failure to file an amended complaint by that deadline, without good cause, would result in dismissal of the complaint with prejudice. The court terminated the motion and directed that a copy of the order be mailed to the plaintiffs.