District Court (Cal.) Says What Plaintiff Can Recover under Song-Beverly in Order to Decide Amount in Controversy; Says Amount in Controversy Must Be Reduced by “Negative Equity” and Mileage Offset

In Canesco v. Ford Motor Co., No. 3:21-cv-00425-BEN-RBB, 2021 U.S. Dist. LEXIS 213644, at *32-33 (S.D. Cal. Nov. 4, 2021), Judge Benitez engaged in a thorough analysis of Song-Beverly’s remedies in order to determine whether the amount in controversy required for federal jurisdiction was satisfied.

The Court finds that this purchase price must be reduced by both the amount of the Optional Service Contract, which is not a manufacturer-installed item, as well as Plaintiff’s negative equity. Where a consumer has negative equity on a vehicle, as was the case here, “[c]ommon sense dictates that providing Plaintiffs with restitution—’status quo’—should again leave them with the [Vehicle] debt.” Rivera, 2020 U.S. Dist. LEXIS 60566, 2020 WL 1652534, at *4-5 (noting [*33] that “[r]equiring Ford to pay off Plaintiffs’ old debt [more than $4,000 on their old PT Cruiser] would result in a windfall because Plaintiffs would receive damages beyond the purchase price of the new motor vehicle”) (internal quotations omitted). Negative equity is not part of the “new motor vehicle” price, so the manufacturer should not be required to reimburse the buyer for their cost. 2020 U.S. Dist. LEXIS 60566, [WL] at *5 (stating that “negative equity stems from a loan on a different vehicle made by a different manufacturer; it is not a component of the ‘new motor vehicle’ price and therefore need not be reimbursed”).