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2 3 4 5 6 7 8 United States District Court 9 Central District of California 10 Western Division 11 12 JOHN A LAPALM, CV 24-09674 TJH (PDx)

13 Plaintiff, 14 v. Order 15 FCA US, LLC, 16 Defendant. 17 18 19 The Court has considered Plaintiff John A Lapalm’s motion to remand [dkt. # 20 20], together with the moving and opposing papers. 21 On September 24, 2023, Lapalm purchased a certified pre-owned 2021 Jeep 22 Compass Trailhawk [“the Vehicle”]. The Vehicle, allegedly, had a transmission defect 23 that was known to Defendant FCA US, LLC [“FCA”]. And, FCA, allegedly, refused 24 to replace or repurchase the Vehicle. 25 On September 18, 2024, Lapalm filed this case in the Los Angeles County 26 Superior Court against FCA, alleging: (1) Claims for breach of implied and express 27 warranties in violation of California’s Song-Beverly Consumer Warranty Act, Cal. Civ. 28 Code §§ 1790, et seq. [“Song-Beverly”]; and (2) A claim for fraudulent inducement 1 to purchase the Vehicle. Lapalm alleged that his damages were at least $35,001.00, 2 with no details as to how he calculated that amount. The Song-Beverly claims are 3 based on FCA’s alleged failure to honor its warranty obligations after the Vehicle was 4 purchased The fraudulent inducement claim is based on FCA’s alleged concealment of 5 the transmission defect before Lapalm purchased the Vehicle. 6 On November 8, 2024, FCA removed based on diversity jurisdiction. In its notice 7 of removal, FCA asserted that Lapalm is a citizen of California, that FCA is 8 incorporated in the Netherlands and has its principal place of business in the United 9 Kingdom, and that the amount in controversy exceeded $75,000.00. Lapalm, now, moves to remand based on the amount in controversy. 10 11 Partial Settlement 12 On October 14, 2025, after the motion to remand was fully briefed, the parties 13 filed a notice of settlement, which stated that Lapalm accepted FCA’s Offer of 14 Judgment. However, the parties have not yet reached a settlement as to Lapalm’s right 15 to recover attorneys’ fees, costs and expenses under Song-Beverly. The parties stated 16 that if they are unable to reach an agreement as to fees, costs and expenses, Lapalm 17 will file a motion for fees, costs and expenses. Thus, this case has not been completely 18 settled. Consequently, the Court will, now, consider the motion to remand. 19 Subject Matter Jurisdiction 20 The Court is a court of limited jurisdiction, Kokkonen v. Guardian Life Ins. Co. 21 of America, 511 U.S. 375, 377 (1994), and has an independent obligation to ensure that 22 it has subject matter jurisdiction over the cases before it, Henderson ex rel. Henderson 23 v. Shinseki, 562 U.S. 428, 434 (2011). Subject matter jurisdiction cannot be waived 24 by the parties. Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986). 25 Further, a removed case must be remanded if the Court lacks subject matter 26 jurisdiction. 28 U.S.C. § 1441(a). 27 Thus, despite the partial settlement reached by the parties, the Court must 28 determine whether it has subject matter jurisdiction over this case. 1 Diversity Jurisdiction 2 FCA removed based on diversity jurisdiction. Diversity jurisdiction requires an 3 amount in controversy that exceeds $75,000.00. 28 U.S.C. § 1332. The amount in 4 controversy is the maximum amount that a plaintiff could reasonably recover if 5 successful on all alleged claims. Arias v. Residence Inn by Marriott, 936 F.3d 920, 6 927 (9th Cir. 2019). 7 As the removing party, FCA bears the burden, here, of establishing that the 8 Court has subject matter jurisdiction. See Kokkonen, 511 U.S. at 377. Any doubt 9 must be resolved in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 10 1992). 11 Initially, FCA was entitled to rely on the assertions it made in its notice of 12 removal to establish diversity jurisdiction. See Dart Cherokee Basin Operating Co., 13 LLC, v. Owens, 574 U.S. 81, 88 (2014). Because the Complaint did not allege that the 14 amount in controversy exceeded $75,000.00, FCA, now, has the burden to prove, with 15 evidence, and by a preponderance of that evidence, that the minimum amount in 16 controversy requirement is satisfied, here. See Urbino v. Orkin Servs. of Cal., Inc., 17 726 F.3d 1118, 1121–22 (9th Cir. 2013). The amount in controversy may include 18 compensatory and punitive damages, as well as attorneys' fees awardable under Song- 19 Beverly. See Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648–49 (9th 20 Cir. 2016). 21 FCA calculated the amount in controversy, here, based on the sum of: (1) The 22 actual damages permitted under Song-Beverly; (2) The civil penalty permitted under 23 Song-Beverly, which is up to two times the actual damages; (3) Punitive damages of 24 four times the actual damages for the fraudulent inducement claim; and (4) Attorneys’ 25 fees likely to be incurred by Lapalm. 26 Actual Damages 27 If Lapalm prevails on his Song-Beverly claims, he will be entitled to recover, as 28 his actual damages, the full purchase price of the Vehicle, less a reduction in value 1 based on the number of miles he drove before he took the Vehicle to an FCA dealer for 2 the first attempted repair [“the Mileage Offset”]. Cal. Civ. Code § 1793.2(d)(2)(B)- 3 (C). 4 FCA did not provide any new evidence in support of its opposition to the motion 5 to remand. However, FCA’s opposition referred to the declaration of James A. 6 Sheridan, its Senior Staff Counsel, that was previously filed in support of FCA’s notice 7 of removal. 8 Sheridan declared that the manufacturer’s suggested retail price [“MSRP”] for 9 the Vehicle was $29,527.00. Sheridan’s declaration was silent as to the Vehicle’s 10 actual purchase price. FCA assumed that the MSRP was a reasonable estimate of 11 Lapalm’s actual damages. However, FCA failed to provide any authority to support 12 its argument that the MSRP is an acceptable substitution for a vehicle’s actual purchase 13 price. FCA, further, argued, that Lapalm did not dispute its use of the MSRP. 14 Nevertheless, subject matter jurisdiction cannot be decided by a party. Bender v. 15 Williamsport Area School Dist., 475 U.S. 534, 541 (1986). 16 Further, FCA failed to provide any evidence as to the number of miles driven 17 by Lapalm before he first took the Vehicle in for repairs. The Mileage Offset is based 18 on a statutory formula that is calculated as a percentage of the actual price paid; the 19 actual price paid is multiplied by the actual number of miles driven divided by 120,000 20 miles. Cal. Civ. Code § 1793.2(d)(2)(C). Because FCA failed to provide any 21 evidence as to the number of miles driven, the Mileage Offset cannot be calculated. 22 The Complaint did not allege Lapalm’s actual damages for his Song-Beverly 23 claims, the actual purchase price for the Vehicle, the amount of the Mileage Offset, or 24 the number of miles driven by Lapalm before he took the Vehicle in for the first repair 25 attempt. Likewise, the Complaint did not allege Lapalm’s damages for his fraudulent 26 inducement claim. 27 Consequently, with no evidence as to the actual price paid and the Mileage 28 Offset, FCA failed to establish, by a preponderance of the evidence, Lapalm’s actual 1 damages for his Song-Beverly claims. The Court cannot speculate as to the amount of 2 those damages. See Chavez v. FCA US, LLC, CV 19-06003-ODW-GJSx, 2020 WL 3 468909, *2 (C.D. Cal. Jan. 27, 2020). Therefore, the Court cannot include Lapalm’s 4 Song-Beverly actual damages or his fraudulent inducement general damages in the 5 amount in controversy. See Edwards v. Ford Motor Co., CV 16-05852-BRO-PLAx, 6 2016 WL 6583585 *4 (C.D. Cal. Nov. 4, 2016). 7 Civil Penalty 8 If FCA willfully failed to comply with its obligations under Song-Beverly, 9 Lapalm can recover a civil penalty of up to twice the amount of his actual damages. 10 Cal. Cal. Civ. Code § 1794(c). FCA calculated the maximum civil penalty, here, by 11 multiplying the Vehicle’s MSRP by two, rather than by multiplying Lapalm’s actual 12 damages by two. As discussed above, Lapalm’s actual damages are unknown. 13 Therefore, the Court cannot include Lapalm’s potential civil penalty in the amount in 14 controversy because the potential civil penalty has not been accurately established by 15 FCA. See Edwards. 16 Punitive Damages 17 FCA asserted in its notice of removal that Lapalm could potentially recover 18 punitive damages of no less than four times the MSRP. The Complaint did not specify 19 the amount of punitive damages that Lapalm is seeking, here. 20 If punitive damages are recoverable, FCA can include them in the amount in 21 controversy. See Gibson v Chrysler Corp., 261 F.3d 927, 945-46 (9th Cir. 2001). 22 Punitive damages are, potentially, recoverable, here, for Lapalm’s fraudulent 23 inducement claim. See Anderson v. Ford Motor Co., 74 Cal. App. 5th 946, 971 24 (2022). Moreover, both punitive damages for the fraudulent inducement claim and a 25 civil penalty for the Song-Beverly claims may be recovered because the conduct that 26 gave rise to each of those claims took place at different times. Anderson, 74 Cal. App. 27 5th at 966-67. 28 When determining the amount of punitive damages, the Court must consider 1 three guideposts: (1) The reprehensibility of the defendant’s conduct; (2) The 2 proportionality between the actual or potential harm and the punitive damages; and (3) 3 The difference between the punitive damages and any civil penalty that is awardable. 4 Riley v. Volkswagen, 51 F.4th 896, 900 (9th Cir. 2022). The reprehensibility of the 5 defendant’s alleged conduct is the most important of the three guideposts. Riley. 6 To determine the degree of the reprehensibility, the Court must consider whether 7 Lapalm’s harm was physical or economic; whether FCA’s conduct was the result of an 8 indifference or a reckless disregard; whether Lapalm was financially vulnerable; 9 whether FCA’s alleged conduct involved repeated actions or was an isolated incident; 10 and whether the harm was the result of intentional malice, trickery, or deceit. See State 11 Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 409 (2003). 12 Generally, the Ninth Circuit has limited punitive damages to no more than four 13 times the amount of actual damages where there are significant economic damages but 14 the misconduct is not particularly egregious. Riley, 51 F.4th at 902. Where there are 15 significant economic damages and very egregious misconduct, the Ninth Circuit permits 16 a single digit multiplier larger than four. Riley. In sum, there is no bright line rule for 17 the amount of punitive damages because they are very fact dependant. Riley. 18 Here, FCA failed to provide evidence that would allow the Court to evaluate the 19 degree of FCA’s reprehensibility. There is no evidence, or allegations, here, 20 regarding, inter alia, Lapalm’s financial vulnerability, whether FCA directly made any 21 misstatements, whether FCA’s alleged actions were isolated or repeated acts, or 22 whether Lapalm’s damages were the result of FCA’s intentional malice, trickery, or 23 deceit. 24 Nevertheless, the Court can consider verdicts in analogous cases – those that are 25 factually similar – to reach a reasonable approximation of the amount of punitive 26 damages that might be awarded, here. See Woolsey v. State Farm General Ins. Co., 27 672 F. Supp. 3d 1018, 1027-28 (C.D. Cal. 2023). FCA cited to two fraudulent 28 concealment cases – Riley and Cieslikowski v. Chrysler, CV 17-562-MRW, 2020 WL 1 7868128, *4 (C.D. Cal. Dec. 21, 2020). However, FCA failed to explain why either 2 of those two cases are factually analogous to this case, and the Court could not 3 determine whether those cases are, indeed, factually analogous because of the 4 threadbare facts, here. 5 Finally, FCA calculated Lapalm’s anticipated punitive damages by multiplying 6 the Vehicle’s MSRP by four. Like what FCA did for Lapalm’s anticipated Song- 7 Beverly actual damages, FCA assumed that the Vehicle’s MSRP, rather than the actual 8 purchase price, would be Lapalm’s general damages for his fraudulent inducement 9 claim. Multiplying the MSRP by four would result in an inaccurate punitive damages 10 estimate. See Edwards. 11 Consequently, the Court cannot include FCA’s inaccurate and unsubstantiated 12 punitive damages estimate in the amount in controversy, here. See Edwards. 13 Attorneys’ Fees 14 If Lapalm prevails on his Song-Beverly claims, he may recover reasonable 15 attorneys’ fees and costs for those claims. See Cal. Civ. Code § 1794(d). FCA argued 16 that attorneys’ fees in Song-Beverly cases often exceed $25,000.00, and can, also, 17 exceed $50,000.00. 18 When considering the amount of attorneys’ fees to include in the amount in 19 controversy, the Court can consider fee awards in other cases that have similar 20 litigation strategies and timelines. Woolsey. The Court can, also, consider prevailing 21 rates for attorneys doing similar work and who have comparable skills, experience, and 22 reputations. Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). 23 In its opposition, FCA referred to Sheridan’s declaration and the three exhibits 24 to that declaration to support its assertion that attorneys’ fees in Song-Beverly cases 25 often exceed $25,000.00. Sheridan declared that, in his experience, similar cases 26 against FCA commonly resulted in plaintiff’s attorneys’ fees and costs in excess of 27 $50,000.00. 28 Exhibit 1 to Sheridan’s declaration is an unauthenticated motion for attorney fees 1 filed by a plaintiff in a Riverside Superior Court Song-Beverly case seeking attorneys’ 2 fees and costs of $58,471.07, with hourly rates between $350.00 and $500.00. 3 Escobar v. General Motors LLC, No. CVRI2200553 (Riverside Superior Court, July 4 19, 2023). 5 Exhibit 2 to Sheridan’s declaration is an unauthenticated copy the California 6 Court of Appeal’s opinion in Anderson, 74 Cal. App. 5th at 950 , which affirmed a San 7 Joaquin Superior Court’s attorneys’ fee award of $643,615.00. In Anderson, two 8 plaintiffs asserted six claims for: (1) Violation of Song-Beverly; (2) Fraud in the 9 inducement based on intentional misrepresentation; (3) Fraud in the inducements based 10 on concealment; (4) Negligent misrepresentation; (5) Fraud in the performance of a 11 contract based on intentional misrepresentation; and (6) Violation of the Consumer 12 Legal Remedies Act, Cal. Civ. Code §1750, et seq. [“CLRA”]. The jury awarded the 13 two plaintiffs Song-Beverly actual damages of $47,715.60, a Song-Beverly civil penalty 14 of $30,000.00, $47,715.60 for the fraud in the inducement based on concealment 15 claim, $47,715.60 for the CLRA claim, and punitive damages of $150,000.00. 16 Exhibit 3 to Sheridan’s declaration is an unauthenticated copy of the California 17 Court of Appeal’s opinion in Bowser v. Ford Motor Co., 78 Cal. App. 5th 587, 627 18 (2022), which affirmed the Riverside Superior Court’s attorneys’ fee award of 19 $836,528.12. In Bowser, two plaintiffs asserted claims under Song-Beverly and for 20 fraud based on intentional misrepresentation and fraudulent concealment against Ford 21 based on an engine defect. The jury awarded the two plaintiffs Song-Beverly actual 22 damages of $42,310.17, a Song-Beverly civil penalty of $84,620.34, $43,084.68 for 23 the fraud claim, and punitive damages of $253,861.02. Bowser, 78 Cal. App. 5th at 24 593-94. 25 Neither FCA nor Sheridan explained how Escobar, Anderson or Bowser were 26 factually or legally similar to the instant case, or whether and how those cases had 27 similar strategies and timelines that would, likewise, be expected for this case. See 28 Woolsey. 1 Moreover, many Song-Beverly cases settle early, but FCA provided no 2 || explanation as to whether this case might settle early or whether it might go all the way 3] to trial. See Vega v. FCA US, LLC, CV-05128-VAP-MRWx, 2021 WL 3771795 *3 4] (C.D. Cal. Aug. 25, 2021). 5 In sum, FCA’s estimate as to Lapalm’s attorneys’ fees is too speculative to 6 | include in the amount in controversy. See Edwards. 7 || Conclusion 8 FCA failed to meet its burden to show that the amount in controversy, here, 9 || exceeds $75,000.00. See Fritsch v. Swift Transportation Co. of Az., LLC, 899 F.3d 10 || 785, 795 (9th Cir. 2018). 11 12 Accordingly, 13 14 It is Orsered that the motion to remand be, and hereby is, ranted, 15 16 || Date: October 31, 2025 Otel fic 18 try J. Hatter7Jr. 19 Senior United States District Judge 20 21 22 23 24 25 26 27 28

Order — Page 9 of 9