Unreported / Non-Citable
Background
Miguel Sanchez leased a 2019 Chevrolet Volt in February 2019 (when the odometer read 11 miles) and later purchased it under the lease’s buyout option. After warranty defects allegedly went unrepaired, he sued General Motors in Los Angeles Superior Court under California’s Song-Beverly Consumer Warranty Act, the federal Magnuson-Moss Warranty Act (MMWA), and related state statutes. GM removed the case to federal court on diversity grounds.
Sanchez moved to remand, arguing GM could not establish either the $50,000 MMWA amount-in-controversy threshold or the $75,000 diversity threshold. The records showed Sanchez had paid $27,448.70 over the lease and $15,233.55 to buy the car out at the end of the lease — combined restitution of $42,682.25 before any offsets. The first repair attempt occurred when the odometer read 86,852, meaning Sanchez drove 86,841 miles before the first repair attempt.
The Court’s Holding
Judge Stephen V. Wilson granted the motion to remand. The court applied the Song-Beverly Act’s statutory mileage-offset formula: the use-offset multiplier equals miles driven before the first repair (86,841) divided by 120,000, which produced a multiplier of approximately 0.724. Multiplied by the $42,682.25 in restitutionary damages, the mileage-offset deduction came to $30,888.08, leaving net actual damages of $11,794.17.
On civil penalties, the court adhered to its prior rulings (Bastida v. Ford) declining to add Song-Beverly civil penalties to the amount-in-controversy when the complaint contains only conclusory allegations of willfulness. Plaintiff’s boilerplate willfulness allegation, with no supporting facts, was insufficient. On attorneys’ fees, GM’s suggested $5,000 estimate was inadequate; even if accepted, it would not bridge the gap to the $50,000 MMWA threshold (and certainly not the $75,000 diversity threshold). The court noted attorneys’ fees would have to exceed $38,215 just to meet the MMWA threshold, with no evidence supporting that amount. The case was remanded to Los Angeles Superior Court.
Key Takeaways
- For lease-then-purchase Song-Beverly cases, restitution is calculated as the sum of lease payments plus the buyout amount.
- The Song-Beverly mileage offset can be substantial: 86,841 miles before the first repair attempt produced a $30,888.08 deduction here, reducing $42,682 in damages to under $12,000.
- For removal jurisdiction in lemon-law cases, the mileage-offset deduction must be applied to the actual-damages calculation — courts cannot simply use sticker price.
- Conclusory willfulness allegations do not support including the Song-Beverly civil penalty in the amount-in-controversy calculation; defendants must point to specific factual allegations or comparable verdicts.
- Late-stage repairs (when the vehicle has been driven heavily before any defect manifests) make the MMWA $50,000 threshold particularly hard for defendants to clear.
Why It Matters
This is a follow-on to Lewis v. GM and other recent Central District remand orders implementing the same framework: actual damages reduced by mileage offset, conclusory civil-penalty allegations excluded, and skeptical treatment of low attorney-fee estimates. The pattern is now clear for lemon-law plaintiffs in this district: when the vehicle has been driven significantly before the first repair attempt, MMWA-based removal will likely fail because the mileage offset eats most of the restitution.
For consumer-side practitioners, the takeaway is that a leased-then-purchased vehicle with substantial mileage is a strong candidate for remand. For defense counsel, a credible willfulness fact pattern (or verdict comparables) is needed to keep these cases in federal court.