United States District Court, S.D. California
ORDER REMANDING ACTION TO STATE COURT
ROGER T. BENITEZ, District Judge.
On December 10, 2013, the Court issued an Order to Show Cause why this action should not be remanded for lack of subject matter jurisdiction. (Docket No. 4.) For the reasons stated below, this action is REMANDED to the Superior Court of California, County of San Diego.
This action arises from Plaintiff Cellene Perez's purchase of an allegedly defective used 2007 Nissan Sentra from Defendant CarMax Auto Superstores California LLC. On October 31, 2013, Plaintiff filed suit in California state court. The Complaint alleges: (1) breach of express warranty under 15 U.S.C. § 2310(d) and California Civil Code § 1794; (2) breach of the implied warranty of merchantability under 15 U.S.C. § 2310(d) and California Civil Code § 1794; (3) violation of the Consumer Legal Remedies Act, California Civil Code §§ 1750 et seq. ; (4) violation of the Unfair Competition Law, Business & Professions Code §§ 17200 et seq. ; and (5) fraud and deceit. The Complaint seeks damages, rescission of the purchase contract and restitution of all monies expended, incidental and consequential damages, punitive damages, equitable and injunctive relief, prejudgment interest, and reasonable attorneys' fees and costs.
On December 5, 2013, Defendant removed this action under both diversity jurisdiction and federal question jurisdiction. On December 3, 2013, the Court issued an Order to Show Cause why this action should not be remanded for lack of subject matter jurisdiction. (Docket No. 4.) Both parties have filed responsive briefs. (Docket Nos. 8, 9.)
Congress has authorized a defendant to remove a civil action from state court to federal court. 28 U.S.C. § 1441. Because federal courts are courts of limited jurisdiction, the removal statute is strictly construed against removal jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus, 980 F.2d at 566 (internal quotation marks omitted). The district court must remand any action previously removed from a state court "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).
Defendant removed this action on the basis of both diversity jurisdiction and federal question jurisdiction. Each will be addressed in turn.
I. DIVERSITY JURISDICTION
"Jurisdiction founded on [diversity] requires that the parties be in complete diversity and the amount in controversy exceed $75, 000." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam); see also 28 U.S.C. § 1332(a).
The Court will address only the amount in controversy requirement, as this issue is dispositive. Diversity jurisdiction exists only "where the matter in controversy exceeds the sum of $75, 000, exclusive of interests and costs." 28 U.S.C. § 1332(a). This amount is determined by the amount of damages or the value of the property that is the subject of the action. Hunt v. Wash. State Apple Advertising Comm'n, 423 U.S. 333, 347-48 (1977).
When a state court complaint affirmatively alleges that the amount in controversy is less than $75, 000, the party seeking removal must prove to a "legal certainty" that the threshold is met. Tele Munchen Fernseh GMBH & Co. Produktionsgesellschaft v. Alliance Atlantis Int'l Distrib., LLC, No. CV 13-5834, 2013 WL 6055328, at *2 (C.D. Cal. Nov. 15, 2013) (citing Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007)). When it is unclear or ambiguous from the face of the complaint whether the jurisdictional threshold is met, however, a "preponderance of the evidence" standard applies. Id. Here, Plaintiff does not seek a specific amount in damages. The Complaint is ambiguous as to the total amount in controversy, meaning that the preponderance of evidence standard applies.
In regard to actual damages, the total amount of the sale was $15, 835.24. (Compl., Exh. 1.) In addition, Defendant concedes that general and compensatory damages amount only to the amount of the total sale. (Def. Response at 7.) Accordingly, the Court finds that only $15, 835.24 in actual damages is at issue.
In regard to punitive damages, punitive damage awards ranging from one to four times the amount of damages are most likely to comport with due process. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). Defendant argues that the Court should use a multiple of two when determining punitive damages in this case, which would amount to an award of $31, 670.48. Defendant, however, fails to offer any support for using a multiple of ...