Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-03757/USCOURTS-cand-3_07-cv-03757-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

WILLIAM NEVILLE, et al.,

Plaintiffs,

v.

WESTERN RECREATIONAL

VEHICLES INC., et al.,

Defendants.

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No. C07-3757-BZ

REPORT AND RECOMMENDATION

DENYING PLAINTIFFS’ MOTION

TO REMAND

On October 25, 2007, I issued a tentative order denying

plaintiffs’ motion to remand. On October 26, 2007, defendant

declined assignment to a Magistrate Judge. The following day,

plaintiffs and defendant accepted my tentative ruling, waived

oral argument and agreed to vacate the hearing date set for

the motion. On October 30, 2007, the case was reassigned to

the Honorable Maxine M. Chesney. Accordingly, I make the

following report and recommendation as to plaintiffs’ motion.

Plaintiffs filed their complaint in state court, claiming

that defendant breached one or more warranties in violation of

Case 3:07-cv-03757-MMC Document 16 Filed 11/01/07 Page 1 of 4
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the California Song-Beverly Consumer Warranty Act (Cal. Civ.

Code §§ 1790 et. seq.), the Magnuson-Moss Federal Trade

Commission Act (15 U.S.C. §§ 2300 et. seq.), and the

California Uniform Commercial Code (Cal. Civ. Code §§ 1100 et.

seq.). Defendant removed the action to this Court, premising

subject matter jurisdiction on the Magnuson-Moss claim. 

Plaintiffs’ have moved to remand this action back to state

court for lack of subject matter jurisdiction. 

Plaintiffs argue that the amount in controversy

requirement of the Magnuson-Moss Act is not met. The

Magnuson-Moss Act provides that, "[i]f the amount in

controversy is less than the sum or value of $50,000

(exclusive of interests and costs) computed on the basis of

all claims to be determined in this suit," then the district

court shall not have subject matter jurisdiction. 15 U.S.C.S.

§ 2310(d)(3)(B). In drafting the Act, Congress provided a

substantive right of action to consumers but did not specify

the appropriate measure and type of damages available. See

Romo v. FFG Insurance Co., 397 F.Supp.2d 1237,1239 (C.D. Cal.

2005). Courts have “turned to the applicable state law to

determine what remedies are available under the Act, which of

necessity informs the potential amount in controversy.” Id.;

see also Kelly v. Fleetwood Enterprises, Inc., 377 F.3d 1034,

1039 (9th Cir. 2004) (punitive damages not available under

Magnuson-Moss Act if not available under state law). In

California, the applicable state law is The Song-Beverly Act. 

It permits plaintiffs to recover as a civil penalty two times

Case 3:07-cv-03757-MMC Document 16 Filed 11/01/07 Page 2 of 4
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1 Critney v. Nat’l City Ford, Inc., 255 F.Supp.2d 1146,

1148 (S.D. Cal. 2003) does not help plaintiffs since it does

not address whether penalties available under The Song-Beverly

Act can be recovered under the Magnuson-Moss Act.

2 Plaintiffs pray for “the ‘full purchase price’ of the

vehicle, collateral charges, finance charges, incidental and

consequential damages.” (Complaint ¶ 20(a)).

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their actual damages for breach of an express warranty, which

they have alleged. See Romo, 397 F.Supp.2d at 1239-1240;

citing Cal. Civ. Code § 1794(c). 

California courts have found Song-Beverly civil

penalties akin to punitive damages because both are intended

to punish defendants rather than compensate plaintiffs.1

 See

Romo, 397 F.Supp.2d at 1240. Punitive damages may be

included in calculating the amount in controversy in a civil

action. See Gibson v. Chysler Corp., 261 F.3d 927, 945 (9th

Cir. 2001). Accordingly, Song-Beverly’s civil penalties

therefore may satisfy the Magnuson-Moss amount in controversy

requirement. See Romo, 397 F.Supp.2d at 1240; see also Brady

v. Mercedes Benz USA Inc., 243 F.Supp.2d 1004, 1009 (N.D.

Cal. 2002). 

In their complaint, plaintiffs allege their actual

damages total at least the full purchase price of the

vehicle, or $34,438.00. (Complaint at ¶ 7, 20(a)).2

 The

Song-Beverly penalty of twice the actual damages therefore

pushes the amount in controversy to well over the $50,000

jurisdictional requirement of the Magnuson-Moss Act. As

such, the court has subject matter jurisdiction over this

///

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suit and I recommend that plaintiffs’ motion to remand is

DENIED. 

Dated: November 1, 2007

 Bernard Zimmerman 

 United States Magistrate Judge

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