Where a manufacturer sued for allegedly failing to repair a gear shift defect in a vehicle removed the suit to federal court because it sought relief under the Magnusson-Moss Warranty Act, a federal statute, but that statute limits federal court’s jurisdiction to claims in excess of $50,000, and the warranty claims here were below that threshold, the suit was remanded to the circuit court.
After plaintiff filed a complaint in the circuit court, alleging that defendant failed to adequately repair a gear shift defect affecting plaintiff’s 2022 Ford Bronco Sport in violation of the Virginia Lemon Law and the Magnusson-Moss Warranty Act, defendant removed the action to this court.
Although the Warranty Act is a federal statute, it limits federal courts’ jurisdiction over these claims by setting a $50,000 amount-in-controversy threshold requirement. According to defendant, plaintiff’s “claimed damages,” which include the purchase price of the vehicle ($36,370.47), compensation for inconvenience and loss of use ($10,000) and incidental and consequential damages, exceed $50,000. Defendant’s argument is unavailing for several reasons.
Defendant is asking the court to consider pendent state law claims in the amount-in-controversy calculation, which goes against governing case law in this circuit. In connection with her Warranty Act claim, plaintiff only seeks “a judgment award equal to the purchase price of the vehicle … as well as incidental costs and expenses, including attorneys’ fees.” It is undisputed that attorney’s fees are excluded from this calculation. Therefore, when considering plaintiff’s complaint on its face, plaintiff’s claim for damages under the Warranty Act (excluding attorney’s fees) is $36,370.47, which is significantly below the $50,000 threshold.
Second, even if the court were to look beyond the face of plaintiff’s complaint and consider the full amount of damages sought by plaintiff, defendant’s claim still fails. Because plaintiff challenged defendant’s removal action, no longer is the burden on defendant to simply make a plausible allegation that the amount-in-controversy exceeds $50,000, as defendant appears to argue. Defendant, as the party seeking removal, bears the burden of showing the requisite amount by a preponderance of the evidence, which it fails to do.
When viewing plaintiff’s request for damages in full, the complaint demonstrates that plaintiff is seeking $36,370.47 for the purchase price of her 2022 car and $10,000 for inconvenience and loss of use, presumably under her Lemon Law claim, plus unspecified damages related to collateral charges, finance charges, rescission of the contract and incidental and consequential damages.
No party has provided any evidence to the court regarding what these unspecified damages could amount to (or whether plaintiff is entitled to them), nor does the court have access to the warranty contract between the parties that may limit certain damages. Therefore, even if the court were to consider the full damages sought by plaintiff through her complaint, this calculation is too speculative and falls short of demonstrating jurisdiction by a preponderance of the evidence.
Defendant asks the court to require “Plaintiff [to] execute a sworn affidavit that she is entitled to less than $50,000 on all claims.” However, this completely ignores the fact that the Lemon Law and Warranty Act provide two theories of recovery. Therefore, it is very plausible that the recovery amount for certain damages, including incidental and consequential damages, may differ under the two laws.
Plaintiff request that defendant should pay for “just costs and any actual expenses, including attorneys’ fees, incurred as a result of the removal, as the formula for determining [Warranty Act] Subject Matter Jurisdiction is plainly stated in Fourth Circuit case law.” The court declines to find that defendant lacked an “objectively reasonable basis for seeking removal” in this case.
First and most importantly, authority on damages’ calculations in the context of Warranty Act claims is quite “sparse” and there does not appear to be any case law in the Fourth Circuit directly on point for the specific question before the court. Second, defendant’s removal was timely, which further supports a finding that defendant sought removal in good faith; there is no evidence that this filing was an attempt to delay or interrupt the action in any way.
Plaintiff’s motion to remand granted. Plaintiff’s request for costs and expenses denied. Defendant’s request for affidavit denied.
Borders v. Ford Motor Company, Case No. 4:22-cv-121, Jan. 20, 2023. EDVA at Newport News (Smith). VLW 023-3-028. 11 pp.