Unreported / Non-Citable
Background
Yvonne Powell and Sherri Freitas bought a used 2021 Chevrolet Tahoe in December 2023 manufactured by GM. They alleged the Tahoe developed defects covered by the warranty that GM could not repair after multiple visits, in violation of California’s Song-Beverly Consumer Warranty Act (the state lemon law). Their state-court complaint sought actual, consequential, and incidental damages, the maximum civil penalty under Song-Beverly, and attorney’s fees and costs but specified no dollar amounts.
GM removed about five months later under diversity jurisdiction. Plaintiffs moved to remand, arguing both that the removal was untimely under § 1446(b)(1) and that GM had not shown the amount in controversy exceeded $75,000.
The Court’s Holding
The court denied remand. On timeliness, it held that the complaint did not affirmatively reveal removability because it pleaded only Plaintiff’s residence (not citizenship) and contained no dollar figures. The cover-sheet box for state-court “unlimited jurisdiction” did not establish the federal $75,000 threshold. Pre-suit communications between the parties cannot count as “other paper” under § 1446(b)(3). And the MMWA claim was treated the same way because the federal warranty statute carries its own $50,000 floor that was not facially alleged.
On the amount in controversy, GM met its burden by a preponderance using Kelly Blue Book estimates for the used Tahoe’s value ($58,933.20), repair-history mileage (16,130), and statutory offsets to arrive at approximately $33,332 in actual damages. The Song-Beverly Act permits a civil penalty of up to two times actual damages for a willful violation, and the court joined a line of California decisions treating that penalty like punitive damages for amount-in-controversy purposes whenever the complaint pleads willfulness and demands the maximum penalty. Including the 2x penalty brought the total to $99,995.58 — comfortably above $75,000, even before attorney’s fees.
The court rejected Plaintiffs’ insistence that GM had to prove the willful-violation element to invoke the civil-penalty multiplier; “it would be absurd to suggest a defendant must offer evidence showing it willfully failed to comply with the Song-Beverly Act” to remove. Plaintiffs’ own willfulness allegations and demand for the maximum penalty are enough.
Key Takeaways
- For used vehicles, manufacturers can satisfy the amount-in-controversy requirement using Kelly Blue Book pricing combined with statutory mileage and other offsets — sale-contract pricing is not the only acceptable evidence.
- The Song-Beverly civil penalty (up to two times actual damages for a willful violation) counts toward the amount in controversy when the complaint alleges willfulness and seeks the maximum penalty.
- A defendant need not prove its own willful violation to invoke the civil-penalty multiplier for removal purposes.
- State civil cover sheets, MMWA claims pleaded without dollar amounts, and pre-suit correspondence do not trigger the 30-day removal clock under § 1446(b).
Why It Matters
This decision tracks Judge Kim’s parallel order in Holmes v. GM and shows how the Central District is consistently allowing manufacturers to remove Song-Beverly suits over moderately priced vehicles by relying on the civil-penalty multiplier. Plaintiffs’ counsel cannot avoid removal simply by omitting dollar figures and then demanding the maximum penalty; that combination almost always satisfies the federal threshold once the manufacturer plugs in the vehicle price.
The Powell order is also notable for endorsing Kelly Blue Book pricing for used vehicles, which gives manufacturers an easy reference point for amount-in-controversy showings even when the original sales contract is unavailable.