Court Opinion

ID: 6331728
Source: CourtListenerOpinion
Date Created: 2022-04-14 17:01:11.871304+00
Date Added: 2024-06-11T09:23:14.027863
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 NICHOLAS SHONER,                                   No. 20-56327
               Plaintiff-Appellant,
                                                      D.C. No.
                     and                           2:18-cv-07030-
                                                       CAS-E
 PAUL CORMIER,
                                   Plaintiff,
                                                      OPINION
                      v.

 CARRIER CORPORATION,
              Defendant-Appellee.

        Appeal from the United States District Court
            for the Central District of California
        Christina A. Snyder, District Judge, Presiding

          Argued and Submitted December 8, 2021
                   Pasadena, California

                       Filed April 14, 2022

 Before: PAUL J. KELLY, JR., * MILAN D. SMITH, JR.,
      and DANIELLE J. FORREST, Circuit Judges.

    *
      The Honorable Paul J. Kelly, Jr., United States Circuit Judge for
the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
2                  SHONER V. CARRIER CORP.

             Opinion by Judge Milan D. Smith, Jr.;
    Partial Concurrence and Partial Dissent by Judge Kelly

                          SUMMARY **

               Magnuson-Moss Warranty Act

    The panel vacated the district court’s judgment regarding
plaintiff’s federal Magnuson-Moss Warranty Act (MMWA)
claim, and remanded to the district court with instructions to
dismiss for lack of jurisdiction.

    Plaintiff Nicholas Shoner filed a class action against air
conditioner manufacturer Carrier Corporation alleging that
his air conditioner was defective, and asserted state law
claims and a federal MMWA claim.

    The panel affirmed the district court’s dismissal of
Shoner’s state law claims in a separate memorandum
disposition.

    Although the MMWA is a federal statute, federal courts
do not have jurisdiction over an MMWA claim if the amount
in controversy is less than $50,000.             15 U.S.C.
§ 2310(d)(3)(B). At issue in this case is whether attorneys’
fees count toward the MMWA’s amount in controversy
requirement. Four Circuits have held that attorneys’ fees are
“costs” within the meaning of the MMWA and are excluded
from the $50,000 amount in controversy, and one circuit (the

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                 SHONER V. CARRIER CORP.                    3

Seventh Circuit) includes attorneys’ fees toward the
MMWA’s amount in controversy. The panel held that
attorneys’ fees are not “costs” within the meaning of
MMWA, and therefore they may be included in the amount
in controversy if they are available to prevailing plaintiffs
pursuant to state fee-shifting statutes.

    The panel next considered whether Shoner could include
attorneys’ fees toward the MMWA’s $50,000 jurisdictional
threshold. Shoner’s MMWA claim was premised on
Carrier’s alleged breach of express and implied warranties
pursuant to Michigan law. Neither of these statutes grant a
prevailing plaintiff attorneys’ fees. Shoner contended that
he could recover attorneys’ fees because he also asserted a
Michigan Consumer Protection Act claim. The panel held
that even if this claim was included in his lawsuit, the Act
makes clear that attorneys’ fees are not available in a class
action. Because Shoner brought this claim as part of a
putative class action, he is not entitled to attorneys’ fees
under state law. The panel concluded that Shoner cannot
include attorneys’ fees in the MMWA’s amount in
controversy, and his MMWA claim cannot meet the
statutory threshold.

    Tenth Circuit Judge Kelly concurred that the district
court lacked jurisdiction to consider Shoner’s MMWA claim
on the merits. He dissented from the majority’s conclusion
that attorneys’ fees available under fee-shifting statutes may
be included in the MMWA’s $50,000 amount in controversy
requirement because the court need not resolve this issue.
Judge Kelly doubted that attorneys’ fees were meant to be
included in the amount in controversy calculation under the
MMWA.
4               SHONER V. CARRIER CORP.

                        COUNSEL

Timothy N. Mathews, Chimicles Schwartz Kriner &
Donaldson-Smith LLP, Haverford, Pennsylvania; James C.
Shah, Miller Shah LLP, Philadelphia, Pennsylvania; for
Plaintiff-Appellant.

Sara S. Tatum, Kirkland & Ellis LLP, New York, New York;
K. Winn Allen, Devin S. Anderson, and Christian S. Daniel,
Kirkland & Ellis LLP, Washington, D.C.; for Defendant-
Appellee.

                        OPINION

M. SMITH, Circuit Judge:

    Plaintiff Nicholas Shoner brought a putative class action
alleging express and implied warranty claims pursuant to
state law, along with a federal Magnuson-Moss Warranty
Act (MMWA) claim. 15 U.S.C. § 2310(d). We affirmed the
district court’s dismissal of Shoner’s state law claims in a
separate memorandum disposition, but Shoner’s federal
claim leaves us in a procedural bind. MMWA claims “stand
or fall with . . . express and implied warranty claims under
state law.” Daniel v. Ford Motor Co., 806 F.3d 1217, 1227
(9th Cir. 2015) (quoting Clemens v. DaimlerChrysler Corp.,
534 F.3d 1017, 1022 (9th Cir. 2008)). Even so, we cannot
consider the merits of the MMWA claim without
jurisdiction. See Matheson v. Progressive Specialty Ins. Co.,
319 F.3d 1089, 1091 (9th Cir. 2003). Because the district
court did not have jurisdiction over the MMWA claim, we
remand with instructions to dismiss for lack of jurisdiction.
                  SHONER V. CARRIER CORP.                        5

                                I.

    In 2018, Shoner filed a class action lawsuit against air
conditioner manufacturer Carrier Corporation alleging that
his air conditioner was defective. Shoner asserted various
state law claims and a federal MMWA claim. The district
court had jurisdiction over Shoner’s state law claims
pursuant to the Class Action Fairness Act (CAFA),
28 U.S.C. § 1332(d), but never addressed whether it had
subject matter jurisdiction over Shoner’s MMWA claim.
After the district court dismissed all of Shoner’s claims, we
clarified that a plaintiff asserting an MMWA class claim
must name 100 class members in the complaint. Floyd v.
Am. Honda Motor Co., 966 F.3d 1027, 1034 (9th Cir. 2020).
In his reply brief, Shoner admits that the district court lacked
jurisdiction over the MMWA claim on behalf of the class but
contends that it still had federal question jurisdiction over his
individual MMWA claim. We ordered the parties to be
prepared to discuss the court’s jurisdiction over Shoner’s
MMWA claim at oral argument.

    Although the MMWA is a federal statute, federal courts
do not have jurisdiction over an MMWA claim if the amount
in controversy is less than $50,000.                  15 U.S.C.
§ 2310(d)(3)(B). “As with suits in diversity,” for MMWA
claims, “we look no farther than the pleadings to determine
the amount in controversy unless ‘from the face of the
pleadings, it is apparent, to a legal certainty, that the plaintiff
cannot recover the amount claimed.’” Kelly v. Fleetwood
Enters., Inc., 377 F.3d 1034, 1037 (9th Cir. 2004) (quoting
St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
289 (1938)). Even assuming that Shoner is entitled to
damages in the full $1,266 he paid for his air conditioner,
that amount is far from $50,000. Shoner contends that
attorneys’ fees can make up the more than $48,000
6               SHONER V. CARRIER CORP.

difference. The narrow question before us is whether
attorneys’ fees count toward the MMWA’s amount-in-
controversy requirement. Our circuit has not yet addressed
this question. See Kelly, 377 F.3d at 1039.

                             II.

    The MMWA “provides a cause of action for express and
implied warranty claims under state law.” Floyd, 966 F.3d
at 1032. The statute precludes federal jurisdiction in the
following circumstances:

       (A) if the amount in controversy of any
       individual claim is less than the sum or value
       of $25;

       (B) if 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; or

       (C) if the action is brought as a class action,
       and the number of named plaintiffs is less
       than one hundred.

15 U.S.C. § 2310(d)(3). At issue is whether the phrase
“exclusive of interests and costs” in subsection (B) excludes
attorneys’ fees as costs.

    Four circuits have held that attorneys’ fees are “costs”
within the meaning of the MMWA and are excluded from
the $50,000 amount-in-controversy requirement. See Ansari
v. Bella Auto. Grp., 145 F.3d 1270, 1271 (11th Cir. 1998);
Suber v. Chrysler Corp., 104 F.3d 578, 588 n.12 (3d Cir.
1997); Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1069
(5th Cir. 1984); Saval v. BL Ltd., 710 F.2d 1027, 1032–33
                 SHONER V. CARRIER CORP.                    7

(4th Cir. 1983). Of these circuits, however, only the Fourth
Circuit analyzed this issue. The others simply adopted
Saval’s reasoning. See id. By contrast, the Seventh Circuit
includes attorneys’ fees toward the MMWA’s amount-in-
controversy requirement but does not explain its departure
from the other circuits. See Burzlaff v. Thoroughbred
Motorsports, Inc., 758 F.3d 841, 844–45 (7th Cir. 2014).

    The MMWA does not define “costs,” and as the Fourth
Circuit recognized, the statute gives way to “two equally
troublesome interpretations.” Saval, 710 F.2d at 1033 n.9.
The Fourth Circuit ultimately concluded that attorneys’ fees
were “costs” in 15 U.S.C. § 2310(d)(3), because the
immediately preceding subsection provides that a prevailing
plaintiff “may be allowed by the court to recover as part of
the judgment a sum equal to the aggregate amount of cost
and expenses (including attorneys’ fees based on actual time
expended) . . . reasonably incurred by the plaintiff.” Id.
§ 2310(d)(2).        The Fourth Circuit determined that
“[a]lthough the statute is not precisely worded as to this
point, . . . ‘cost and expenses’ should be read together, and
that ‘attorneys’ fees’ are an example of both.” Saval,
710 F.2d at 1032. To reach this conclusion, the court
reasoned that including attorneys’ fees toward the amount-
in-controversy thresholds in the MMWA would render
15 U.S.C. § 2310(d)(3)(A)’s $25 individual claim limit
superfluous. Id.

    Examining the MMWA’s text, we must part ways with
our sister circuits. We find no reason to interpret the phrase
“exclusive of interests and costs,” in the MMWA differently
from how we interpret the same language in the diversity and
CAFA jurisdiction provisions. See 28 U.S.C. § 1332(a),
(d)(2). The diversity jurisdiction statute provides federal
courts with “original jurisdiction of all civil actions where
8                   SHONER V. CARRIER CORP.

the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs.” Id. § 1332(a).
Likewise, CAFA’s amount-in-controversy requirement must
“exceed[] the sum or value of $5,000,000, exclusive of
interest and costs.” Id. § 1332(d)(2). In either context,
“where an underlying statute authorizes an award of
attorneys’ fees, either with mandatory or discretionary
language, such fees may be included in the amount in
controversy.” Galt G/S v. JSS Scandinavia, 142 F.3d 1150,
1156 (9th Cir. 1998); Fritsch v. Swift Transp. Co. of Ariz.,
899 F.3d 785, 794 (9th Cir. 2018).

    We hold that attorneys’ fees are not “costs” within the
meaning of the MMWA and therefore may be included in
the amount in controversy if they are available to prevailing
plaintiffs pursuant to state fee-shifting statutes. 1 We have
defined the “amount in controversy” as “all relief to which
the plaintiff is entitled if the action succeeds.” Fritsch,
899 F.3d at 795. The amount in controversy “includes any
result of the litigation, excluding interests and costs, that
‘entails a payment’ by the defendant.” Gonzales v. CarMax
Auto Superstores, 840 F.3d 644, 648 (9th Cir. 2016) (quoting
Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th
Cir. 2007)). As the Supreme Court explained, when a
plaintiff asserts a claim based on a statute with a fee-shifting
provision, “[t]he amount so demanded [becomes] part of the
matter put in controversy by the complaint, and not mere
‘costs’ excluded from the reckoning by the jurisdictional and

    1
      We note that even absent direction from our court, several district
courts in our circuit have already taken this approach to the MMWA’s
amount-in-controversy requirement. See Chung v. FCA US LLC, 2021
WL 4280342, at *3 (C.D. Cal. Sept. 20, 2021); Ferguson v. KIA Motors
Am. Inc., 2021 WL 1997550, at *4 (E.D. Cal. May 19, 2021); Cox v. KIA
Motors Am., Inc., 2020 WL 5814518, at *4 (N.D. Cal. Sept. 30, 2020).
                 SHONER V. CARRIER CORP.                     9

removal statutes.” Missouri State Life Ins. Co. v. Jones,
290 U.S. 199, 202 (1933). If an underlying state statute
authorizes attorneys’ fees to a successful litigant, these fees
become part of the amount “put in controversy” through an
MMWA lawsuit. Id.

    In Saval, the Fourth Circuit considered and rejected the
analogy with federal diversity cases because “although the
language of 28 U.S.C. § 1332(a) is nearly identical to that
contained in 15 U.S.C. § 2310(d)(3)(B), the latter statute
must be construed in the light of § 2310(d)(2).” 710 F.2d
at 1033. We are not persuaded by the Fourth Circuit’s
reasoning, which relies on its determination that “‘cost and
expenses’ should be read together, and . . . ‘attorneys’ fees’
are an example of both.” Id. at 1032. As the Fourth Circuit
acknowledged, under an equally plain reading, attorneys’
fees may be “expenses” and not “costs.” See id. at 1033 n.9.

    The strongest reason the Fourth Circuit provided to adopt
its interpretation of the MMWA is the canon against
superfluity. See id. at 1032. This canon guides us to “infer
that Congress did not intend to make any portion of a statute
superfluous.” In re Pangang Grp. Co., 901 F.3d 1046, 1056
(9th Cir. 2018). The Fourth Circuit explained that if
attorneys’ fees are included in the amount in controversy, the
$25 individual claim limit in 15 U.S.C. § 2310(d)(3)(A)
would be meaningless. Saval, 710 F.2d at 1032. Under our
approach, however, attorneys’ fees are included only when
authorized by an underlying state statute. Thus, the
$25 claim limit would still have meaning if the state statute
underlying a plaintiff’s MMWA claim does not provide for
attorneys’ fees.

    Moreover, as the Fourth Circuit recognized, the text of
the MMWA’s $25 individual claim limit itself “does not
exclude ‘interests and costs’ from the amount in
10               SHONER V. CARRIER CORP.

controversy.” Id. at 1032 n.7. The Fourth Circuit did not
contend with this difficulty, instead concluding that “[t]he
omission must have been unintentional.” Id. When
interpreting an unclear statutory provision, we cannot simply
assume an omission was “unintentional,” particularly when
that very omission tips the scale in favor of one interpretation
over another. “It is beyond our province to rescue Congress
from its drafting errors, and to provide for what we might
think . . . is the preferred result.” Lamie v. U.S. Tr., 540 U.S.
526, 542 (2004) (quoting United States v. Granderson,
511 U.S. 39, 68 (1994) (Kennedy, J., concurring)).

    We agree with the Fourth Circuit, however, that the
MMWA’s jurisdictional hurdles were meant “to restrict
access to federal courts.” Saval, 710 F.2d at 1033. Our
statutory construction is consistent with that purpose. It will
not allow “trivial or insignificant actions” to flood federal
courts because the underlying state statutes must still
authorize attorneys’ fees. Id. at 1030 (quoting H.R. Rep. No.
93-1107 (1974), as reprinted in 1974 U.S.C.C.A.N. 7702,
7724). Moreover, “district courts are well equipped to
determine . . . when a fee estimate is too speculative.”
Fritsch, 899 F.3d at 795. This case is a good example. Even
if Shoner were statutorily entitled to attorneys’ fees, such
fees must still amount to approximately $48,734 before
Shoner could bring his individual MMWA claim—at most,
worth $1,266—to federal court.

   Lastly, it is worth noting that at the time the MMWA was
enacted in 1975, the amount-in-controversy requirement for
federal diversity jurisdiction was $10,000. See Pub. L. No.
85-554, 72 Stat. 415 (1958) (raising the amount in
controversy to $10,000); Pub. L. No. 100-702, 102 Stat.
4642 (1988) (raising the amount in controversy to $50,000).
The MMWA has not been amended since its enactment, and
                 SHONER V. CARRIER CORP.                   11

its amount-in-controversy      requirement    has remained
$50,000.

                             III.

    We now consider whether Shoner can include attorneys’
fees toward the MMWA’s $50,000 jurisdictional threshold.
The MMWA’s amount in controversy is to be “computed on
the basis of all claims to be determined in this suit.”
15 U.S.C. § 2310(d)(3)(B). Shoner’s MMWA claim is
premised on Carrier’s alleged breach of express and implied
warranties pursuant to Michigan law. Mich. Comp. Laws
§§ 440.2313–14.       Neither of these statutes grants a
prevailing plaintiff attorneys’ fees.

    Nevertheless, Shoner contends he can recover attorneys’
fees because he also asserted a Michigan Consumer
Protection Act claim. Mich. Comp. Laws § 445.901 et seq.
Even assuming Shoner’s Consumer Protection Act claim is
included in “all claims to be determined” in his lawsuit,
Michigan’s Consumer Protection Act makes clear that
attorneys’ fees are not available “in a class action.” Mich.
Comp. Laws § 445.911(2). Shoner brought his Consumer
Protection Act claim as part of a putative class action, so he
is not entitled to attorneys’ fees under state law. See
Gavriles v. Verizon Wireless, 194 F. Supp. 2d 674, 684 (E.D.
Mich. 2002). Therefore, he cannot include attorneys’ fees in
the MMWA’s amount in controversy. Shoner’s state law
claims do not allow him to recover attorneys’ fees, so it
appears to a legal certainty that his MMWA claim cannot
meet the statutory threshold. See Kelly, 377 F.3d at 1037.

                      CONCLUSION

   The district court lacked jurisdiction to consider
Shoner’s MMWA claim on the merits. “If a federal court
12               SHONER V. CARRIER CORP.

lacked jurisdiction to decide an issue before it” we may
exercise appellate jurisdiction to correct the error. In re Di
Giorgio, 134 F.3d 971, 974 (9th Cir. 1998). Accordingly,
we vacate the district court’s judgment regarding Shoner’s
MMWA claim and remand with instructions to dismiss the
claim for lack of subject matter jurisdiction. Costs on appeal
are awarded to Appellee.

   VACATED and REMANDED with instructions to
dismiss.

KELLY, Circuit Judge, concurring in part and dissenting in
part:

    I concur that the district court lacked jurisdiction to
consider Mr. Shoner’s MMWA claim on the merits. I
respectfully dissent from the court’s conclusion that
attorneys’ fees available under state fee-shifting statutes may
be included in the MMWA’s $50,000.00 amount in
controversy requirement under 15 U.S.C. § 2310(d)(3)(B).
The parties’ have not fully addressed this issue, and the
court’s holding is unnecessary. Mr. Shoner can neither
plausibly allege that inclusion of attorneys’ fees in the
amount in controversy calculation would satisfy the
jurisdictional minimum nor name 100 plaintiffs. See
§ 2310(d)(3)(B)–(C). Thus, the court need not resolve the
issue. Kelly v. Fleetwood Enters., Inc., 377 F.3d 1034, 1039
(9th Cir. 2004).

    Additionally, notwithstanding the similar language of
28 U.S.C. § 1332(a) and (d)(2), I doubt that attorneys’ fees
were meant to be included in the amount in controversy
calculation under the MMWA. Including attorneys’ fees
would render § 2310(d)(3)(A) superfluous. Saval v. BL Ltd.,
                SHONER V. CARRIER CORP.                   13

710 F.2d 1027, 1032 (4th Cir. 1983). I am also unconvinced
that “costs and expenses” in § 2310(d)(2) refer to distinct
categories of expenditures as the terms are synonymous,
Cost, Roget’s II Thesaurus (expanded ed. 1998). Moreover,
the court’s approach requires a court to consider state law
remedies when § 2310(d)(2) provides for attorneys’ fees.

    Finally, I do not think that the Seventh Circuit has
definitely decided this issue, as the court in Burzlaff v.
Thoroughbred Motorsports, Inc., 758 F.3d 841, 845 (7th Cir.
2014), only addressed the MMWA’s amount in controversy
requirement in a parenthetical, and the court in Gardynski-
Leschuck v. Ford Motor Co., 142 F.3d 955, 958 (7th Cir.
1998), declined to reach the issue. Our sibling circuits have
concluded that attorneys’ fees are not part of the amount in
controversy requirement with good reason. See Saval,
710 F.2d at 1032–33; Scarlott v. Nissan N. Am., Inc.,
771 F.3d 883, 887 (5th Cir. 2014); Samuel-Bassett v. KIA
Motors Am., Inc., 357 F.3d 392, 402 (3d Cir. 2004); Ansari
v. Bella Auto. Grp., Inc., 145 F.3d 1270, 1271–72 (11th Cir.
1998) (per curiam).