Unreported / Non-Citable
Background
Marco Antonio Orozco sued General Motors LLC in Fresno County Superior Court on June 16, 2026, under California's Song-Beverly Consumer Warranty Act. He alleged that a 2024 Chevrolet Silverado purchased for $86,530.65 was delivered with serious defects and asserted claims for breach of express warranty, breach of the implied warranty of merchantability, and violation of California Civil Code section 1793.2(b). He sought actual damages, restitution, a statutory civil penalty of up to twice actual damages, prejudgment interest, and reasonable attorney's fees and costs.
GM removed the action to the U.S. District Court for the Eastern District of California on July 24, 2026, in Case No. 1:26-cv-05797-EGC, invoking diversity jurisdiction. The parties did not dispute complete diversity, so the only issue became the amount in controversy. Orozco moved to remand on August 21, 2026. GM estimated $26,000 in deductions for a mileage offset, third-party service contracts, manufacturer rebates, and negative equity, leaving actual damages of $60,530.65. Orozco did not dispute that calculation but argued that GM had not competently established enough additional civil penalties or attorney's fees to exceed the $75,000 threshold. GM responded that the complaint's express double-damages request and reasonable prospective fees placed sufficient relief at stake. Magistrate Judge Erin Guy Castillo signed the order on November 3, 2026, and it was filed November 4, 2026.
The Court’s Holding
The court denied Orozco's motion to remand and retained diversity jurisdiction. It explained that the amount in controversy measures the maximum recovery a plaintiff could reasonably obtain if victorious, not the probable recovery. Once the amount is contested, both sides submit proof and the court decides by a preponderance of the evidence whether the requirement is satisfied. A removing defendant may rely on reasonable assumptions grounded in the complaint and need not prove its own willfulness or eliminate every potential statutory bar.
Applying that standard, the court held that GM reasonably included the maximum civil penalty because Orozco alleged willful Song-Beverly Act violations and expressly requested a penalty equal to twice his actual damages. The court distinguished that specific prayer from a vaguer request for no more than the statutory maximum. The resulting penalty was $121,061.30, which together with the $60,530.65 actual-damages estimate placed $181,591.95 in controversy. Because those categories alone exceeded $75,000, the court did not definitively resolve the parties' competing attorney's-fee estimates, though it noted that prospective statutory fees further reinforced the jurisdictional total.
Key Takeaways
- A complaint's express request for a civil penalty equal to twice actual damages can supply a reasonable basis for including that maximum penalty in the amount in controversy.
- The removing defendant did not have to prove willfulness or show that Orozco would ultimately recover the full penalty.
- The undisputed actual-damages estimate of $60,530.65 plus the requested $121,061.30 penalty totaled $181,591.95, independently satisfying the requirement that the amount exceed $75,000.
- The court left the specific attorney's-fee estimates unresolved because they were unnecessary to the jurisdictional result, while recognizing that statutory prospective fees reinforced the total.
- The order denied Orozco's motion to remand and kept the removed warranty action in federal court without deciding the merits of the underlying claims.
Why It Matters
The decision applies the relief-at-stake approach to a Song-Beverly Act complaint that expressly seeks double actual damages. It treats the pleaded maximum penalty as a reasonable component of the jurisdictional calculation rather than requiring proof of the ultimate award, and it distinguishes a specific two-times prayer from a less definite request for no more than the statutory maximum.
The ruling also shows how a court can resolve removal without deciding every disputed valuation issue. Actual damages and the requested civil penalty were sufficient here; attorney's fees provided additional support but did not require a definitive estimate. The order decides jurisdiction and remand only, not the merits of Orozco's warranty claims or his entitlement to penalties and fees.