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Scarlott v. Nissan N. Am., Inc.

United States Court of Appeals, Fifth Circuit

November 10, 2014

APRIL SCARLOTT, Plaintiff - Appellant
v.
NISSAN NORTH AMERICA, INCORPORATED; HURRICANE GLASS; HURRICANE AUTO CARE & ACCESSORIES, INCORPORATED, Defendants - Appellees WEISBERG & MEYERS, L.L.C.; NOAH D. RADBIL, Appellants

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Appeals from the United States District Court for the Southern District of Texas

For APRIL SCARLOTT, Plaintiff - Appellant: Aaron D. Radbil, Miami, FL.

For WEISBERG & MEYERS, L.L.C., Appellant: Aaron D. Radbil, Miami, FL.

For NOAH D. RADBIL, Esq., Appellant: Raffi Melkonian, Wright & Close, L.L.P., Houston, TX; Aaron D. Radbil, Miami, FL.

For NISSAN NORTH AMERICA, INCORPORATED, Defendant - Appellee: Jeffrey Scott Patterson, Esq., Giovanna Tarantino Bingham, Hartline Dacus Barger Dreyer, L.L.P., Dallas, TX.

For HURRICANE AUTO CARE & ACCESSORIES, INCORPORATED, Defendant - Appellee: Leslie William Adams, Angelle Marie Adams, Leslie Wm. Adams & Associates, Houston, TX.

Before KING, GRAVES, and HIGGINSON, Circuit Judges. GRAVES, Circuit Judge, dissenting in part.

OPINION

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ON PETITION FOR REHEARING

HIGGINSON, Circuit Judge:

IT IS ORDERED that the petition for panel rehearing is GRANTED and the opinion previously filed in this case is WITHDRAWN. The following opinion is substituted therefore:

Plaintiff-Appellant April Scarlott and Appellants Weisberg & Meyers, L.L.C. and Noah Radbil appeal the district court's denial of Scarlott's motion to remand, grant of summary judgment in favor of Defendants-Appellees Nissan North American, Incorporated (" Nissan" ) and Hurricane Auto Care & Accessories, Incorporated

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(" Hurricane" ),[1] as well as the district court's final judgment and various management orders. Appellants contend that the district court lacked subject matter jurisdiction over this case. For the reasons below, we REVERSE and REMAND for proceedings consistent with this opinion.

FACTS AND PROCEEDINGS

In December 2006, Scarlott purchased a 2006 Murano from a Nissan dealership for $31,881, totaling $39,289 including all financing fees, warranties, taxes, and costs. For safety reasons, Scarlott wanted to purchase a car that had a HomeLink system built into the mirror, which would allow her to sync her car with her home lights, alarm system, and garage door. The salesman at the dealership assured Scarlott that the car she purchased had a HomeLink mirror; however, when she attempted to program the mirror that night, she realized that the car did not have the necessary system. The day after she purchased the car, she went back to the dealership intending to return the car. Instead, she agreed to bring the car to a local factory-authorized installation center to have the HomeLink system and mirror installed. The dealership arranged for Hurricane to perform this installation and gave Scarlott a voucher so that she would not have to pay for it.

Nine months later, in September 2007, the car began experiencing electrical problems, including difficulty starting. Scarlott took the car to the dealership, which replaced the car's battery. The car continued to experience intermittent electrical problems over the next two years, requiring Scarlott to take her car to the dealership on seven occasions. The dealership replaced the battery four times. In November 2009, the dealership monitored the car for almost thirty days and then diagnosed the electrical problems as being caused by the improper installation of the HomeLink mirror. The dealership contacted Hurricane, and Hurricane agreed to fix the problem.

On October 19, 2009, Scarlott filed suit in Texas state court against Nissan for breach of express warranty, breach of implied warranty, and violation of the Texas Deceptive Trade Practices Act. Scarlott later amended her complaint to add claims against the dealership, a Nissan distributor, and Hurricane. On December 6, 2010, the defendants removed the suit to federal court based on federal question and supplemental jurisdiction. The defendants asserted federal question jurisdiction under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (" MMWA" ), which allows litigants to bring breach-of-warranty claims in federal court if the amount in controversy is at least $50,000. See 15 U.S.C. § 2310(d)(3)(B).

Three months after removal, Scarlott raised the issue of subject matter jurisdiction at a conference with the district court, expressing concern that the amount in controversy did not meet the $50,000 threshold required by the MMWA. The district court indicated that it would be disinclined to dismiss the case for want of jurisdiction.

Scarlott subsequently dismissed her claims against the dealership and distributor, leaving only her claims against Nissan and Hurricane. On May 9, 2013, after the remaining parties had briefed a motion for

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summary judgment, Scarlott filed a motion to remand the suit to state court for lack of subject matter jurisdiction. Nissan and Hurricane opposed the remand. On August 28, 2013, the district court issued an order denying Scarlott's motion to remand, excluding Scarlott's expert report, and granting summary judgment in favor of Nissan and Hurricane. Scarlott timely appealed. On appeal, Scarlott raises several issues. Because we find that the district court erred in its decision not to remand the case to state court, we will only address the jurisdictional issue.

STANDARD

" Federal courts are courts of limited jurisdiction 'hav[ing] only the authority endowed by the Constitution and that conferred by Congress.'" United States v. Hazlewood, 526 F.3d 862, 864 (5th Cir. 2008) (alteration in original) (quoting Save the Bay, Inc. v. U.S. Army, 639 F.2d 1100, 1102 (5th Cir. 1981)). " If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). " The party seeking to remove bears the burden of showing that federal jurisdiction exists and that removal was proper." Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013). " Any ambiguities are construed against removal and in favor of remand to state court." Id. " In reviewing a district court's denial of a plaintiff's motion to remand a case from federal court to state court, the Court of Appeals applies a de novo standard of review." Sherrod v. Am. Airlines, Inc., 132 F.3d 1112, 1117 (5th Cir. 1998).

DISCUSSION

I. The Magnuson-Moss Warranty Act


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