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Steen v. Mercedes-Benz USA, LLC

United States District Court, S.D. Mississippi, Southern Division

July 28, 2017




          BEFORE THE COURT is the Motion to Remand [6] filed by the plaintiffs Matthew Steen and David Lowry. The Motion has been fully briefed. After reviewing the submissions of the parties, the record in this matter, and the applicable law, the Court will order limited discovery related to the jurisdictional amount at the time of removal for each of Plaintiffs' claims.


         On March 21, 2017, Plaintiffs filed this lawsuit in the Circuit Court of the Second Judicial District of Harrison County, Mississippi, alleging that they leased a defective 2017 Mercedes Benz GLS450 (“GLS450”), manufactured by Defendant Mercedes-Benz USA. Mercedes-Benz of South MS (“Seller”), an authorized dealer for Mercedes, arranged for Plaintiffs to lease the vehicle from Daimler Trust C/O (“Lessor”). Plaintiffs will have paid $53, 431 at the conclusion of the lease.

         Lessor purchased the GLS450 from Mercedes for $86, 428.56. Mercedes provided warranties to Lessor including a four year or fifty thousand mile bumper to bumper coverage warranty. On December 29, 2016, Lessor assigned its rights in Mercedes' written warranties to Plaintiffs. Plaintiffs allege that after they took possession of the GLS450 they experienced defects with the engine and electrical system. As a result of these defects, the GLS450 would not start, and the check engine light would illuminate. Plaintiffs allege that Mercedes failed to repair the GLS450 after multiple attempts, thus causing Mercedes' warranties to fail. Plaintiffs further allege that they have been and will continue to be financially damaged due to Mercedes' failure to comply with the warranties.

         Plaintiffs assert the following claims against Mercedes: breach of written warranty pursuant to the Federal Magnuson-Moss Warranty Act, breach of implied warranty pursuant to that Act, and a state law claim for violation of the Mississippi Vehicle Warranty Enforcement Act. On May 25, 2017, Mercedes removed the case to this Court, asserting that this Court has federal question jurisdiction and diversity jurisdiction over Plaintiffs' claims. Plaintiffs filed this Motion to Remand. Plaintiffs do not dispute that diversity of citizenship exists, but argue that the amount in controversy is not satisfied for diversity jurisdiction or federal question jurisdiction based on caselaw from other jurisdictions concerning Magnuson-Moss Warranty Act claims.


         The party invoking federal jurisdiction bears the burden of establishing the amount in controversy by a preponderance of the evidence. Hartford Ins. Grp. v. Lou-Con, Inc., 293 F.3d 908, 910 (5th Cir. 2002) (citing St. Paul Reins. Co., Ltd. v. Greenberg, 134 F.3d 1250, 1252 (5th Cir. 1998)). There are two ways in which the defendant can satisfy this burden. First, the defendant may show that it is facially apparent from the complaint that the plaintiff's claims are likely to exceed the jurisdictional amount. Garcia v. Koch Oil Co. of Tex., 351 F.3d 636, 639 (5th Cir. 2003). If the amount in controversy is not facially apparent, the defendant “may support federal jurisdiction by setting forth the facts - [either] in the removal petition [or] by affidavit - that support a finding of the requisite amount.” Id. (quoting Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). In the remand context, “[d]iscovery by the parties should not be allowed except on a tight judicial tether, sharply tailored to the question at hand, and only after a showing of its necessity.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 574 (5th Cir. 2004). The jurisdictional facts supporting removal must be judged at the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000).

         Magnusson-Moss Claims

          The Magnuson-Moss Warranty Act confers federal question jurisdiction over breach of warranty claims where the amount in controversy exceeds $50, 000, exclusive of interest and costs. 15 U.S.C. § 2310(d)(3); see also Scarlott v. Nissan N. Am., Inc., 771 F.3d 883, 887 (5th Cir. 2014). “Generally, courts look to state law to determine the applicable measure of damages, which informs the amount in controversy under the [Act].” Scarlott, 771 F.3d at 888. However, attorney's fees cannot be included to establish the amount in controversy for claims asserted under the Act. Id. Under Mississippi law, “[t]he measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” Miss. Code Ann. § 75-2-714(2); see also MacKenzie v. Chrysler Corp., 607 F.2d 1162, 1166 (5th Cir. 1979). A buyer can also recover consequential or incidental damages for breach of warranty under Mississippi law. Miss. Code Ann. § 75-2-715(1).

         Pursuant to state court discovery rules, Mercedes sent requests for admissions to Plaintiffs asking Plaintiffs to admit that they would never seek damages in excess of $50, 000, exclusive of interests and costs, but Plaintiffs denied all such requests. (State Ct. Resp. to Def.'s First Set of Req. for Admis. 2, ECF No. 1-1). Nevertheless, in their Motion to Remand, Plaintiffs claim that they will not be able to recover more than $50, 000 under the Magnuson-Moss Warranty Act. Plaintiffs rely on cases from the Third, Sixth, and Seventh Circuits in which a cost of cover formula was adopted to determine the amount in controversy for Magnuson-Moss Warranty Act claims. See generally Golden v. Gorno Bros., Inc., 410 F.3d 879 (6th Cir. 2005); Samuel-Bassett v. Kia Motors Am., Inc., 357 F.3d 352 (3d Cir. 2003); Gardynski-Leschunk v. Ford Motor Co., 142 F.3d 955 (7th Cir. 1998).

         However, in those cases, the courts had information such as the cost of a replacement vehicle and the present value of the vehicle available to assist them in making the necessary calculations of damages under the Magnuson-Moss Warranty Act. See, e.g., Golden, 410 F.3d at 885. In the present case, Plaintiffs are asking the Court to calculate their damages even though the only information provided to the Court is the purchase price of the vehicle and vague citations to the Kelley Blue Book. Moreover, these calculations should have been performed by Plaintiffs prior to filing their Complaint to prevent confusion as to the amount in controversy in this lawsuit. Therefore, it is unclear at this time as to what the amount in controversy is for the Magnusson-Moss claims.

         State Law Claim

          28 U.S.C. § 1332 confers federal diversity jurisdiction over civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and the civil action is between citizens of different states. The Magnusson-Moss Warranty Act provides that Magnusson-Moss claims can be brought “in any court of competent jurisdiction in any State or District of Columbia” without regard to the amount in controversy. Barnes v. West, Inc.,249 F.Supp.2d 737, 739 (E.D. Va. 2003) (citing 15 U.S.C. ยง 2310(d)(1)(A)). Thus, if diversity jurisdiction can be established over the state law claim, the Court can exercise supplemental jurisdiction over the Magnusson-Moss ...

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