District Court (Cal.) Confirms that Automobile Negative Equity Sum Should Be Included in Determining Removal Jurisdiction

In Selinger v. Ford Motor Co., No. 2:22-CV-08883-SPG-KS, 2023 U.S. Dist. LEXIS 61254, at *35-37 (C.D. Cal. Apr. 5, 2023), Judge Garnett confirmed federal jurisdiction by adding in negative equity at issue in a RISC.

Finally, in its supplemental memorandum, Plaintiff argues that remand is appropriate because Defendant “also . . . remain[s] notably silent on whether it would be seeking to deduct the $2,000 (listed on the [RISC] as a ‘Manufacturer’s Rebate’) from [Plaintiff’s recovery,” (Supp. at 3), and whether Defendant would claim “a further deduction for the negative equity—of $5,200.000 (listed on the [RISC] as ‘Total Net Trade-in (Indicate if negative number)’)—which was rolled into the financing for the Subject Vehicle.” Of course, even if the Court were to assume the validity of these arguments, a deduction of $7,200.00 would not cause the amount-in-controversy to slip below the $75,000.01 threshold for purposes of this Motion. Nevertheless, the Court concludes that these arguments also fail as a matter of law.  As previously discussed, the “amount in controversy is established by what the plaintiff demands, not by any reductions that a defendant might achieve through its defenses.” Becker v. Ford Motor Co. (In re Ford Motor Co. DPS6 Powershift Transmission Prods. Liab. Litig.), 2018 U.S. Dist. LEXIS 232980, 2018 WL 5905942, at *4; Becker, 2018 U.S. Dist. LEXIS 232980, at *17. For this reason, multiple courts have held that the amount-in-controversy should neither be reduced by a manufacturer’s rebate nor negative equity. See, e.g., Carillo, 546 F. Supp. 3d 995, 2021 WL 2711138, at *4 (refusing to reduce actual damages by manufacturer’s rebate and noting that courts “routinely calculate the amount of restitution a plaintiff may be entitled to recover under the Song-Beverly Act without applying any reduction for manufacturers’ rebates” and collecting cases reaching the same conclusion); Becker, 2018 U.S. Dist. LEXIS 232980, at *17-18. Thus, the Court finds that Defendant did not err when it did not account for the manufacturer’s rebate or negative equity when calculating the amount-in-controversy.  Therefore, the Court concludes that [*37] Defendant has shown, through a preponderance of the evidence, that the amount-in-controversy requirement is satisfied. With both requirements for diversity jurisdiction shown, the Court finds remand inappropriate.