Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01788/USCOURTS-casd-3_13-cv-01788-2/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CYNTHIA STELZER,

Plaintiff,

Case No. 13-cv-1788 BAS (JMA)

ORDER SUA SPONTE

REMANDING CASE TO STATE 

COURT

v.

CARMAX AUTO SUPERSTORES 

CALIFORNIA, LLC,

Defendant.

On August 1, 2013, Defendant Carmax Auto Superstores California, LLC 

removed this case from state court pursuant to 28 U.S.C. § 1332. On the merits, it 

is likely that Plaintiff Cynthia Stelzer’s Amended Complaint would be dismissed 

for the same reasons similar complaints have been dismissed in other cases and for 

failure to comply with the court’s order granting Defendant’s motion to dismiss. 

ECF 19; See, e.g., Chulick-Perez v. Carmax Auto Superstores California, LLC, 

2:13-CV-02329-TLN, 2014 WL 2154479 (E.D. Cal. May 22, 2014). 

However, this Court cannot reach the merits of the claim because the amount 

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in controversy does not reach the statutory minimum of $75,000, required for 

diversity jurisdiction under 28 U.S.C. § 1332. 

The Court must reevaluate the previous decision (ECF 18) to deny remand 

in light of newly revealed evidence that Defendant contemplated and subsequently 

did repurchase the vehicle in question, significantly reducing the potential amount 

in controversy.

I. LEGAL STANDARD

A defendant can remove any action filed in state court over which federal 

courts have original jurisdiction. 28 U.S.C. 1441(a). That said, the removal statute 

is strictly construed against removal, and “[t]he strong presumption against 

removal jurisdiction means that the defendant always has the burden of

establishing that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th 

Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt as to the 

right of removal in the first instance.” Id. The propriety of removal turns on 

whether the case could have originally been filed in federal court, Chicago v. Int’l 

Coll. of Surgeons, 522 U.S. 156, 163 (1997), and the Court’s analysis must focus 

on the pleadings “as of the time the complaint is filed and removal is effected.” 

Strotek Corp. v. Air Transport Ass’n of America, 300 F.3d 1129, 1131 (9th Cir. 

2002); see also Sparta Surgical Corp. v. Nat’l Ass’n of Sec. Dealers, Inc., 159 F.3d 

1209, 1213 (9th Cir. 1998).

II. DISCUSSION

Stelzer previously contested diversity jurisdiction. ECF 12. At the time, the 

facts supported federal jurisdiction. ECF 18. However, the facts regarding the 

amount in controversy have changed, and therefore that legal analysis must be 

revisited.

CarMax argues that the amount in controversy exceeds $75,000 for two 

reasons: the injunctive relief sought, which it values at $350,000, and the potential 

attorney’s fees, which it values at $77,400.

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a) Amount in Controversy

When a complaint filed in state court affirmatively alleges that the amount in 

controversy is less than the jurisdictional threshold of $75,000, the party seeking 

removal must prove to a “legal certainty” that the threshold is met. Tele Munchen 

Fernseh GMBH & Co. v. Alliance Atlantis Int’l Distrib, LLC, 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)). But, when it’s unclear or ambiguous from the face of a 

complaint whether the jurisdictional threshold is met, a “preponderance of the 

evidence” standard applies. Id.; see also Matheson v. Progressive Speciality Ins. 

Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 

The court looks to the complaint filed in state court, not to an amended 

complaint filed after removal. See Heichman v. American Tel. & Tel. Co., 943 

F.Supp. 1212, 1216–17 (C.D.Cal. 1995); see also St. Paul Mercury Indem. Co. v. 

Red Cab Co., 303 U.S. 283 (1938). While “[i]t is true that, when a defendant 

removes a case to federal court based on the presence of a federal claim, an 

amendment eliminating the original basis for federal jurisdiction generally does not 

defeat jurisdiction[,]” Rockwell Int'l Corp. v. United States, 549 U.S. 457, 474 

(2007),

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later events may clarify a previously uncertain jurisdictional issue. See 

Asociacion Nacional de Pescadores v. Dow Quimica 988 F.2d 559 (5th Cir.1993) 

cert. denied, 510 U.S. 1041 (1994); see also St. Paul Mercury Indemnity Co. v. Red 

Cab Co., 303 U.S. 283, 293 (1938)). 

The claimed amount in controversy cannot be based upon speculation and 

conjecture. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090–91 

(9th Cir. 2003). Rather, the Court can consider “summary-judgment-type evidence 

relevant to the amount in controversy at the time of removal,” including 

declarations and affidavits. Id. at 1090. However, the court may also accept a 

 

1

(citing Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 346, 357 (1988).

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plaintiff’s decision to “sue for less than the amount she may be entitled to if she 

wishes to avoid federal jurisdiction and remain in state court.” Lowdermilk v. U.S. 

Bank Nat’l Ass’n, 479 F.3d 994, 999 (9th Cir. 2007). 2

In an action by a single plaintiff against a single defendant, all claims can be 

aggregated and can include special and general damages, punitive damages, and 

attorneys’ fees. Campbell v. Hartford Life Ins. Co, 825 F.Supp.2d 1005, 1008

(E.D.Cal. 2011). 

1. Actual and Punitive Damages

Here, actual damages are pled with specificity. Stelzer, in her Statement of 

Actual and Punitive Damges, claimed $32,000 in punitive damages and $40,000 in 

actual damages. The Court will give Stelzer the benefit of the doubt and assume 

she meant $40,000 for punitive damages, as her remand brief makes clear that the 

$32,000 amount is for actual damages and the $40,000 amount is for punitives. 

ECF 12, 5.

Stelzer states she agreed in principle to repurchase on July 2, 2013. ECFs 31 

¶ 11, 30-1 ¶ 8. This statement is corroborated by Exhibit 2 to Daniel Bloor’s 

Declaration, which contains an email stating, “CarMax agrees to provide your 

client with full restitution as a correction to satisfy her claim for damages under the 

CLRA and her claim under the Song Beverly Act.” ECF 30-1, 12.

Thus, only the $40,000 in punitive damages remains in contention. Under 

Lowdermilk, Stelzer can stipulate to a lower damages award, and thus her 

limitation of punitive relief to $40,000 is accepted.3

 

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Lowdermilk’s reasoning still seems applicable when the action does not involve a class. Suing 

for a lower amount is overruled in the class-action context by Standard Fire Ins. Co. v. Knowles, 

133 S.Ct 1345 (2013) because “[t]hat principle is not viable in actions involving absent class 

members.” Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 981 (9th Cir. 2013) 

(examining Standard Fire). However this logic, and therefore ruling, seems to only apply for 

class actions.

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In any case, CarMax does not rebut these damages to a legal certainty.

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2. Attorney’s Fees

It is unsettled in the Ninth Circuit whether attorneys’ fees incurred after the 

date of removal are included in the amount in controversy. Curtean Garland v. 

WinCo Holdings, Inc., 2013 WL 3479563 at *2 (D. Or. July 8, 2013). The court 

previously decided that fees after the date of removal are not included in the 

amount in controversy, citing Wastier v. Schwan’s Consumer Brands, 2007 WL 

4277552 at *3 (S.D. Cal. Dec. 5, 2007). The Court will continue to adhere to this 

determination. At most, attorneys’ fees in this case amount to CarMax’s $1,200 

estimate for the “Case Intake and Claim Generation Phase” of this case, which 

would cover everything up through removal.

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and the presence of identical 

complaints filed by Stelzer’s counsel in other cases. ECF 14-4, Edwards Decl., 11. 

“This makes CarMax’s estimate of $77,400 wildly excessive.” ECF 18, 9:23 

(citing ECF 14-4, Edwards Decl., 18). The preponderance of the evidence 

supports at most $1,200 in controversy as attorneys’ fees in this case, bringing the 

aggregated total of punitive damages and attorneys’ fees to $41,200.

3. Injunctive Relief

The Supreme Court has established that “[i]n actions seeking declaratory or 

injunctive relief, it is well established that the amount in controversy is measured 

by the value of the object of the litigation.” Hunt v. Washington State Apple Adver. 

Comm'n, 432 U.S. 333, 347 (U.S.N.C. 1977). As early as 1916, it was “settled 

doctrine” that separate and distinct claims cannot be aggregated to meet the 

jurisdictional amount. Pinel v. Pinel, 240 U.S. 594 (cited by Snyder v. Harris, 394 

U.S. 332, 337 (1969)). Even in the case of a joined lawsuit, “various fee payers 

could not be aggregated[.]” Snyder, 394 U.S. at 337. In Clark v. Paul Gray, Inc., 

306 U.S. 583 (1939), this logic was applied to class actions challenging a $15 fee 

on automobiles within California. These claims, even though the numerous 

 

4

It is likely that the fees were even lower because Stelzer’s counsel appears to use a form 

complaint. See Lee v. CarMax, 13-CV-7648-MWF-VBK (C.D. Cal. 2013).

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plaintiffs were all joined in the lawsuit, could not be aggregated because “there are 

numerous plaintiffs having no joint or common interest or title in the subject matter 

of the suit.” Id at 588 (cited by Snyder, 394 U.S. at 337).

In the Ninth Circuit, this rule on money damages is extended to injunctive 

relief based on an “either viewpoint” rule. Ridder Bros. Inc., v. Blethen, 142 F.2d 

395, 399 (9th Cir. 1944). Under this rule, either the plaintiff’s potential recovery 

or the potential cost to the defendant of complying with the injunction must exceed 

the jurisdictional threshold. See In re Ford Motor Co./Citibank (South Dakota), 

N.A., 264 F.3d 952 (9th Cir. 2001).5 However, the Ninth Circuit has specifically 

and repeatedly declined to extend the either viewpoint rule to class action claims 

seeking equitable relief because it would permit plaintiffs with minimal damages to 

“dodge the non-aggregation rule by praying for an injunction.” See id. (quoting 

Snow v. Ford Motor Co., 561 F.2d 787, 791 (9th Cir. 1977).

Because the cost of the injunction is not specifically pled in the complaint, 

the preponderance of evidence standard under Lowdermilk applies. This Court 

finds that presenting an already-produced document to a buyer would consume, at 

most, minutes of time for each customer. Assuming that CarMax’s high-end 

assumptions that it would need to expend an extra 2 minutes 27 seconds per 

customer at $27 per hour in wages, it would cost CarMax a little over $1.10 to 

provide a buyer with an inspection report. See ECF 30, Schlicter Decl., 10 ¶ 18. 

When CarMax initially changed its certificate policy, it “simply” sent an email to 

employees. ECF 31, Rosner Decl. 2 ¶ 10. This may add as much as an hour or 

 

5

Some circuits follow the “plaintiff-viewpoint” rule, which measures the value of the litigation 

“solely from the plaintiff’s perspective.” Ericsson GE Mobile Communications, Inc. v. Motorola 

Communications & Elecs., Inc., 120 F.3d 216, 218–19 (quoted by Campbell v. Gen. Motors Corp., 

19 F. Supp. 2d 1260, 1266 (N.D. Ala. 1998)). Campbell found no aggregation of a class’s claims 

for injunctive relief against General Motors, in part based on the plaintiff-viewpoint rule. As 

discussed, the either viewpoint rule’s scope is limited in class actions or class action-like 

circumstances, leading to a similar—but not identical—amount in controversy under either 

analysis.

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two to draft in a small committee.

The object of the litigation, here, is to enjoin CarMax from wrongfully 

failing to provide a certificate. Hypothetically, CarMax might be wronging all of 

its purchasers, creating an ever-growing aggregate claim. If CarMax extended out 

its time frame far enough and assumed continued hardship, even an incredibly 

minor loss could create an amount in controversy above any threshold set by law. 

This is clearly an inappropriate interpretation of the intentionally limited scope of 

diversity jurisdiction and an undermining of the Ninth Circuit’s precedent 

disfavoring aggregation. Instead, the Court must first look to the plaintiff’s 

potential gain and then the potential loss to the defendant, but only as its loss 

relates to the plaintiff in the case. Thus, the fixed cost of implementing the policy 

change and the particular cost to provide one plaintiff with the required report is 

the proper valuation of the injunction.

Accordingly, the amount in controversy added from the injunction barely 

moves the needle from the $41,200 for punitive damages and attorney’s fees. The 

Court finds that the preponderance of the evidence supports an amount in 

controversy of $41,471.11. Any concessions from Seltzer or CarMax regarding 

the amount in controversy are not a valid basis for federal jurisdiction. See 

Heichman, 943 F.Supp. at 1216. Under either a preponderance of the evidence or 

legal certainty test, this fails to meet the jurisdictional requirement that the amount 

in controversy exceed $75,000. 

III. CONCLUSION

For the reasons given above, the court REMANDS this matter to state court.

IT IS SO ORDERED.

DATED: July 25, 2014

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