Opinion
Civil Action 3:20-1838
01-12-2022
DAVID HAGENBAUGH, et al ., individually and on behalf of all others similarly situated, Plaintiffs v. NISSAN NORTH AMERICA d/b/a NISSAN USA, et al., Defendants
MEMORANDUM
MALACHY E. MANNION UNITED STATES DISTRICT JUDGE
I. Factual Background
Plaintiffs originally filed their class action complaint in Luzerne County Court of Common Pleas on September 1, 2020. On October 7, 2020, Defendant Nissan North America, Inc. removed this case to federal court pursuant to 28 U.S.C. §§1332, 1441, 1446, and 1453. (Doc. 1). On November 20, 2020, Plaintiffs filed an amended complaint with attached Exhibits. (Doc. 19). Plaintiffs are three pairs of individuals (two married couples and one father and daughter) residing in Luzerne County, Pennsylvania. (Doc. 19, ¶¶ 1-3). Defendants are three auto manufacturers incorporated and headquartered in other states, three limited liability company auto dealerships, authorized by the manufacturers and incorporated in Pennsylvania, and three individual dealership owners residing in other states. (Id., ¶¶ 4-12). Defendant manufacturers are Hyundai Motor America, Kia Motors America, and Nissan North America, Inc.
One of the dealership owners, Defendant Antonio D. Pierce, was dismissed from this action with prejudice pursuant to a stipulation. (Doc. 76). As such, the motions filed Pierce prior to his dismissal, (Docs. 59 & 60), were termed.
According to the amended complaint, Defendant dealerships, with approval of Defendant manufacturers and owners, advertised a “Set for Life Program” which represented that vehicle purchasers would receive certain benefits, including engine warranties, oil and filter changes, car washes, loaner vehicles, and state inspections, for free for the duration of their ownership of the vehicle. (Id., ¶ 20). Amid financial difficulties, Defendant dealerships sold numerous vehicles without repaying the financing for those vehicles to certain manufacturer-affiliated financing entities, while still advertising the Set for Life Program benefits to purchasers. (Id., ¶¶ 16, 24). The Defendant dealerships went out of business in November of 2018, about two years after opening. (Id., ¶ 25). Since the dealership closures, Defendant manufacturers have refused customers' demands to provide them with the Set for Life Program benefits. (Id., ¶'s 25-27).
Each pair of Plaintiffs purchased a vehicle from one of the Defendant dealerships and each either signed an agreement with the dealership upon purchase specifying the benefits of the Set for Life Program or was provided a brochure upon purchase specifying the benefits. (Id., ¶¶ 28, 32, 37). After the dealerships closed, Plaintiffs demanded that Defendant manufacturers, respectively, continue to provide the Set for Life Program benefits on behalf of the closed dealerships they had authorized, and Defendant manufacturers refused. (Id., ¶¶ 31, 36, 40).
II. Procedural History
Plaintiffs, on behalf of those similarly situated (the “Class”), brought this putative class action against Defendants in the Luzerne County Court. (Doc. 1-2). Included among Plaintiffs' putative class are “[a]ll individuals located within and/or residents of the Commonwealth of Pennsylvania, who purchased or leased automobiles” at the Defendant dealerships between November 1, 2016 and November 30, 2018. (Id., ¶ 42a.) In their original complaint, Plaintiffs alleged violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) (73 P.S. §201-1) and the Chapter 30 of the Pennsylvania Code (“Automotive Industry Trade Practices”) (73 P.S. §201.13.1) (Count I), breach of contract (Count II), unjust enrichment (Count III), and fraud (Count IV). (Doc. 1-2, ¶¶ 54, 64, 69, 7480). As relief, Plaintiff's sought treble damages for Count I, actual and compensatory damages for Count II, restitution in the amount of actual and compensatory damages for Count III, punitive damages for Count IV, interest, attorney's fees, expenses, and costs of suit. (Doc. 1-2).
Defendants removed this case on October 7, 2020, averring that this court has diversity jurisdiction pursuant to both 28 U.S.C. §1332(a) and §1332(d), or the Class Action Fairness Act of 2005 (“CAFA”). (Doc. 1-2, ¶¶1-2, 32-34). On November 3, 2020, Plaintiffs filed a motion to remand this case back to state court, and submitted a brief in support of this motion on November 17, 2020. (Doc. 6, Doc. 15). On December 8, 2020, Defendant manufacturers filed their briefs in opposition to the motion to remand. (Doc. 32). Plaintiffs filed a reply brief on December 22, 2020. (Doc. 35). The parties submitted Exhibits with their briefs. Defendant manufacturers also filed a motion for leave of court to file a sur-reply brief in response to plaintiffs' reply brief, (Doc. 45), which the court will grant and consider the sur-reply brief attached to the motion.
For the reasons that follow, Plaintiffs' motion to remand this case to the Court of Common Pleas of Luzerne County will be DENIED.
III. Standard
A defendant may remove to federal court any civil action brought in a state court over which federal courts have original jurisdiction. 28 U.S.C. §1441. “The defendant seeking to remove the matter bears the burden of showing that (1) federal subject matter jurisdiction exists, (2) removal was timely filed, and (3) removal was proper.” Farrell v. FedEx Ground Package Sys., Inc., 478 F.Supp.3d 536, 540 (D. N.J. 2020) (citations omitted). “After a case has been removed, the district court, however, may nonetheless remand it to state court if the removal was procedurally defective or subject matter jurisdiction is lacking.” Id. (citing 28 U.S.C. §1447(c)).
Federal courts have original jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. §1332(a)(1). Also, there must be diversity of citizenship between each plaintiff and each defendant in the case. The amount in controversy asserted in a notice of removal can satisfy the requirement for original jurisdiction under §1332 “if the district court finds, by the preponderance of evidence, that the amount in controversy exceeds” $75,000. 28 U.S.C.§1446(c)(2).
A defendant bears the burden of demonstrating, by a preponderance of the evidence, the factual basis for satisfying the amount in controversy requirement. Lasher v. Statoil USA Onshore Prop., Inc., 2018 WL 1524881, at *2 (M.D. Pa. 2018) (citing Samuel-Bassett v. KIA Motors Amer., Inc., 357 F.3d 392, 397-398 (3d Cir. 2004). “[A] defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Farrell, 478 F.Supp.3d at 540 (citation omitted). Further, “[n]o evidentiary support is required, and the Court should accept a removing defendant's allegations unless they are contested by the plaintiff or questioned by the Court.” Id. However, “[w]hen the sufficiency of the jurisdictional allegations in a notice of removal is challenged, the parties must submit proofs for the court to decide, by a preponderance of the evidence, whether the jurisdictional requirements are satisfied.” Id.
Removal is “strictly construed, ” and doubts about removal are “resolved in favor of remand.” Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992). In evaluating the amount in controversy for removal cases, courts look first to the complaint itself. Samuel-Bassett, 357 F.3d at 398. Where punitive damages are recoverable, they are properly considered in determining whether the amount in controversy is satisfied. Packard v. Provident Nat'l. Bank, 994 F.2d 1039, 1046 (3d Cir. 1993). Attorney's fees, too, are considered in estimating the amount in controversy where such an award is provided for by statute. Farrell, 478 F.Supp.3d at 541.
In assessing the sufficiency of the amount in controversy for diversity jurisdiction, courts first resolve factual disputes using the preponderance of evidence standard. Schober v. Schober, 761 Fed.Appx. 127, 129 (3d Cir. 2019). Where the complaint does not specifically limit the amount in controversy to less than the jurisdictional minimum, courts then apply the “legal certainty” test, adopted in Samuel-Bassett, 357 F.3d at 398, and St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). Federico v. Home Depot, 507 F.3d 188, 197 (3d Cir. 2007). Under this standard, the amount in controversy requirement is satisfied unless it appears to a legal certainty that the claim is for less than $75,000. Schober, 761 Fed.Appx. at 129 (citing Red Cab, 303 U.S. at 289). The estimation of the amount in controversy must be “realistic, ” “objective, ” and not based on “fanciful, ‘pie-in-the-sky,' or simply wishful amounts.” Samuel-Bassett, 357 F.3d at 403. On the other hand, neither is the amount in controversy “measured by the low end of an open-ended claim, but rather by a reasonable reading of the value of the rights being litigated.” Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 401 (3d Cir. 2016) (quoting Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir. 1993)).
Finally, in a class action, “claims of several plaintiffs, if they are separate and distinct, cannot be aggregated for purposes of determining the amount in controversy.” Ricci Inc., 835 F.3d 388 at 397 (3d Cir. 2016). Claims by multiple plaintiffs are “separate and distinct” where “adjudication of their claims could be accomplished in separate actions.” Plunkett v. Nationwide Mut. Ins. Co., 2014 WL7271380, at *2 (E.D. Pa. 2014).
IV. Discussion
Plaintiffs repeatedly assert that Defendants are required to show “to a legal certainty” that the amount in controversy threshold is met. (Doc. 15). In such, Plaintiffs confuse the legal certainty standard's application to this case. As the Third Circuit explained in Federico, where a complaint “specifically avers that the amount sought is less than the jurisdictional minimum, ” the “defendant seeking removal must prove to a legal certainty that [the] plaintiff can recover the jurisdictional amount.” 507 F.3d at 196-97. Where the complaint does not so limit the amount in controversy, however, “the case must be remanded if it appears to a legal certainty that the plaintiff cannot recover the jurisdictional amount.” Id. at 197. Indeed, the case upon which Plaintiffs rely in establishing this rigid burden is distinguishable along these lines. In Lupole v. Collins Pine Co., 2007 WL3023962, at *8 (W.D. Pa. 2007), the court determined that the plaintiff's complaint, as clarified by a subsequent affidavit stipulation, did limit the amount in controversy to less than the jurisdictional amount. Here, by contrast, Plaintiff's complaint does not limit the amount in controversy to below $75,000. Therefore, Defendants' burden here is preponderance of the evidence on any disputed factual matters, and remand is warranted only if it appears to a legal certainty that the amount in controversy does not exceed $75,000.
Defendant Nissan in its Notice for Removal alleges that “Plaintiffs' requests for actual damages, compensatory damages, and/or restitution are attempts to recover their vehicles' purchase prices” (Doc. 1, ¶19). Thus, in light of the Plaintiffs' request for treble damages, Defendants assert that the amount in controversy is satisfied for each of the named Plaintiffs by tripling the purchase price of their vehicles. (Id., ¶26). Defendants also note that adding punitive damages and attorney's fees demonstrates that the amount in controversy exceeds $75,000. (Id., ¶'s 27-29).
Plaintiffs, on the other hand, argue that their vehicles' purchase prices should not be the baseline for determining the amount in controversy. (Doc. 15, at 9-11). Rather, they contend, the compensatory relief sought in their complaint consisted only of “the value of the benefits that were conferred under the Set for Life Program.” (Doc. 15, at 10).
In assessing the amount in controversy based on a “reasonable reading” of the complaint, the Third Circuit in Werwinski v. Ford Motor Co., 286 F.3d 661, 667 (3d Cir. 2002), abrogated on other grounds, concluded that the plaintiffs' complaint had left “the door open” for a demand of the purchase price of their vehicles in a UTPCPL claim because its “Prayer for Relief” requested an order declaring that Ford was financially responsible for the sums they paid for their vehicles and demanded disgorgement of Ford's “ill-gotten profits” received from the vehicles' sale. Thus, the lower court did not err in estimating the amount in controversy based on the purchase prices. Id.
In Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002), the Third Circuit also interpreted Pennsylvania's economic loss doctrine. Recently, the Third Circuit decided Earl v. NVR, Inc., 990 F.3d 310 (3d Cir. 2021), and abrogated Werwinski to the extent it held that plaintiff's fraud claims were barred by Pennsylvania's economic loss doctrine.
Plaintiffs' original complaint includes among the injuries suffered that Plaintiffs “would not have purchased the vehicles” if not for Defendants' “misleading representation, ” and declares that Plaintiffs relied upon Defendants' representations about the Set for Life Program “as an inducement for their agreement to purchase vehicles from Defendant, Dealerships.” (Doc. 1-2, ¶¶ 58, 60). The complaint further alleges that Defendants “reaped enormous, ill-gotten profits from the sale of the Manufacturers' vehicles to Plaintiffs and Class members” and demands that Defendants “disgorge their unjustly acquired profits.” (Id., ¶¶ 68, 71).
Plaintiffs argue that unlike the complaint's prayer for relief in Werwinski, the prayer for relief here does not include any request for purchase prices. While this may be true, the prayer for relief does not request any specific amounts; rather, it generally requests damages “pursuant to” the various counts detailed earlier in the complaint. Plaintiffs' logic would also lead the court to ignore their requests for the value of the Set For Life Program benefits, as those too are not specifically mentioned in the prayer for relief. Surely, Plaintiffs would agree that such a result misconstrues their complaint; thus, the absence of specific requests in their prayer for relief belies this argument regarding their attempt to distinguish Werwinski.
Because the prayer for relief refers to the counts set forth earlier in the complaint, the court looks to those in assessing what a reasonable reading of the complaint would indicate as the amount in controversy. Like the complaint in Werwinski, the complaint here connects Plaintiffs' purchase of the vehicles to Defendants' misrepresentations by alleging that Plaintiffs would not have purchased the vehicles but for the Set for Life Program representations. Thus, because the complaint seeks damages for these alleged misrepresentations and demands disgorgement of the profits gained by sale of the vehicles, a “reasonable reading” of Plaintiffs' complaint would allow the conclusion that relief in the amount of the vehicles' purchase price is sought.
Plaintiffs also attempt to distinguish the cases offered by Defendants for the proposition that the vehicle's purchase price is the amount in controversy in a UTPCPL suit by noting that the plaintiffs in those cases alleged that their vehicles were defective. The thrust of the claims in Werwinski and O'Keefe v. Mercedez-Benz USA, 214 F.R.D. 266, 287 (E.D. Pa. 2003), however, was that the defendants fraudulently misrepresented the condition of vehicles, and in such induced purchase of those vehicles. Similarly here, Plaintiffs claim that they were induced into purchasing their vehicles by Defendants' misrepresentations. Like the plaintiffs in Werwinski and O'Keefe, who were left unaware of the defects in the vehicles they purchased, Plaintiffs here indicate that they were left unaware of the defects in the vehicle-and-benefits-program packages they purchased-namely, that those benefits would terminate prematurely. In sum, the court concludes that comparison to these cases is apt, and that the vehicles' purchase prices are appropriately considered in assessing the amount in controversy.
As this is a class action, the court considers each Plaintiff's separate and distinct claim individually, and asks whether any of the Plaintiff's claims, by itself, exceeds $75,000. As Defendants explain, trebling the purchase price for each of the several vehicles alone would result in an amount in controversy exceeding $75,000. Moreover, the complaint alleges that Plaintiffs suffered losses in the form of denied benefits from the Set for Life Program. Adding the value of these lost benefits, as well as punitive damages and attorney's fees as requested by the complaint, pushes the estimated amount in controversy for each of the named Plaintiffs' claims, by themselves, even further over the jurisdictional threshold.
Additionally, Plaintiffs in their motion to remand assert that jurisdictional discovery is necessary to determine the citizenship of the Defendant LLC dealerships. Plaintiffs specifically contest Defendants' representation that the only members of the Defendant LLC's are Defendants Saporito, Pierce, and Armstead, none of whom are citizens of Pennsylvania. However, this argument was excluded from Plaintiffs' brief in support of their instant motion. (Doc. 15). Middle District practice requires substantive legal arguments to be contained in the briefs supporting motions. Sapa Extrusions, Inc., v. Liberty Mut. Ins. Co., 2018 WL 2091622, at *2 (M.D. Pa. 2018); see also Local Rule 7.5. Because Plaintiffs' diversity of citizenship argument is absent from their brief, it is considered abandoned. Consequently, Defendants' representations that no Defendants are citizens of Pennsylvania and that all Plaintiffs are citizens of Pennsylvania, (Doc. 1 at 3-5), are uncontested, and the court concludes that the complete diversity required by 28 U.S.C. §1332(a)(1) exists.
Since the court finds that diversity jurisdiction under §1332(a) exists in this case and that removal was appropriate, it need not address Defendant manufacturers' alternative assertion of federal jurisdiction pursuant to the federal Class Action Fairness Act (“CAFA”), 28 U.S.C. §§1332(d) and 1453, (see Doc. 1 at 10), and Plaintiffs' contention that the exception under §1332(d)(4)(A), known as the Local Controversy Exception, applies here.
V. Conclusion
Because the court finds that it has original jurisdiction over this matter pursuant 28 U.S.C. §1332(a), Plaintiffs' Motion to Remand, (Doc. 6), will be DENIED. Defendant manufacturers' motion for leave of court to file a sur-reply brief, (Doc. 45), will be GRANTED. An appropriate Order will follow.