Unreported / Non-Citable
Background
Vitalina Montes-Mendoza bought a 2021 Chevrolet Silverado 1500 manufactured by General Motors in November 2023. She alleged the vehicle developed engine and differential defects during the warranty period that GM could not repair after a reasonable number of opportunities. She sued in Los Angeles County Superior Court, asserting violations of California’s Song-Beverly Consumer Warranty Act (the state lemon law), the federal Magnuson-Moss Warranty Act, and California’s Uniform Commercial Code and Consumer Legal Remedies Act. She sought actual damages, restitution, civil penalties up to two times her actual damages for a willful violation, and attorney’s fees.
GM removed to federal court under the diversity statute, 28 U.S.C. § 1332. Montes-Mendoza did not contest diversity but moved to remand on the ground that GM had not shown the amount in controversy exceeded $75,000.
The Court’s Holding
The court denied remand. Walking through the Ninth Circuit’s framework for amount-in-controversy disputes, it explained that a notice of removal needs only “plausible” allegations, but once the plaintiff contests them the defendant must prove the figure by a preponderance using reasonable assumptions grounded in the record.
On actual damages, GM showed the Silverado’s sale price was $80,955.28 (from the sales agreement), then deducted a mileage offset based on Plaintiff’s 8,350 miles of use, statutory offsets for service contracts, and unpaid loan financing. That brought the actual-damages estimate to roughly $38,995, well short of $75,000 standing alone.
The decision turned on civil penalties. The court joined a line of California district court decisions holding that the Song-Beverly Act’s civil penalty — up to two times actual damages where the manufacturer’s violation was “willful” — counts toward the amount in controversy when the complaint specifically alleges willfulness and demands the maximum penalty. Plaintiff’s complaint did exactly that. Including the maximum two-times penalty raised the figure to about $116,985, comfortably above the $75,000 threshold.
The court rejected Plaintiff’s argument that GM had to prove willfulness with evidence to invoke the civil penalty calculation. As several California decisions have observed, requiring a defendant to prove the case against itself just to remove would be “absurd.” The plaintiff’s own willfulness allegations and her demand for the maximum penalty are enough. Because the actual damages plus the civil penalty already exceeded the threshold, the court did not need to decide whether GM’s anticipated attorney-fee estimate was adequately supported.
Key Takeaways
- A notice of removal need only plausibly allege the amount in controversy; preponderance proof is required only when the plaintiff contests the figure.
- The Song-Beverly Act’s civil penalty (up to twice actual damages for a willful violation) is included in the amount-in-controversy calculation when the complaint alleges willfulness and seeks the maximum penalty.
- A manufacturer is not required to come forward with evidence of its own willfulness to invoke the civil penalty multiplier.
- Courts use vehicle sale price, statutory mileage offsets, service-contract and rebate deductions, and outstanding loan financing to estimate actual damages.
- Attorney’s fees may also be added under MMWA and Song-Beverly when state law authorizes them, but courts often need not reach the fee question once damages plus civil penalties exceed $75,000.
Why It Matters
California’s lemon-law plaintiffs frequently move to remand removed cases by arguing that civil penalties and fees are speculative. This decision, like a string of other Central District orders in late 2025 and early 2026, makes clear that as long as the complaint alleges willfulness and asks for the statutory maximum, the court will treat the two-times penalty as part of the amount in controversy without requiring proof that the violation actually was willful.
For consumer attorneys this is a significant tactical signal: pleading willfulness and the maximum civil penalty essentially locks the door to remand whenever the vehicle is moderately expensive. For manufacturers, the order endorses a removal playbook built on the sale agreement, mileage offsets, and the statutory penalty multiplier — without the awkward burden of proving their own bad conduct.