142 F.3d 955 (7th Cir. 1998), 97-3483, Gardynski-Leschuck v. Ford Motor Co.

Docket Nº:97-3483.
Citation:142 F.3d 955
Party Name:Catherine GARDYNSKI-LESCHUCK, Plaintiff-Appellant, v. FORD MOTOR COMPANY, Defendant-Appellee.
Case Date:April 02, 1998
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 955

142 F.3d 955 (7th Cir. 1998)

Catherine GARDYNSKI-LESCHUCK, Plaintiff-Appellant,


FORD MOTOR COMPANY, Defendant-Appellee.

No. 97-3483.

United States Court of Appeals, Seventh Circuit

April 2, 1998

Argued Feb. 23, 1998.

Page 956

Adam J. Krohn (argued), Krohn & Moss, Chicago, IL, for Plaintiff-Appellant.

Mitchell Ware, Cathy A. Pilkington, Jones, Ware & Grenard, Chicago, IL, Michael J. O'Reilly (argued), Dearborn, MI, Defendant-Appellee.

Before EASTERBROOK, RIPPLE, and KANNE, Circuit Judges.

EASTERBROOK, Circuit Judge.

Frustrated that Ford Motor Company and its dealers could not repair her car to her satisfaction, Catherine Gardynski-Leschuck filed this suit under the Magnuson-Moss Warranty Act of 1975, 15 U.S.C. §§ 2301-12. The unusual jurisdictional clause in this Act, 15 U.S.C. § 2310(d)(1), permits suit by a person claiming to be "damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this [Act], or under a written warranty, implied warranty, or service contract" (emphasis added). In other words, an aggrieved customer may sue on state-law claims in federal court, whether or not the parties are of diverse citizenship. Gardynski-Leschuck has elected to do just that; her claims rest on Illinois law, which the parties agree governs the enforcement of her warranty. The case was tried to a jury, which decided in Ford's favor. Contending that the instructions were defective, Gardynski-Leschuck asks us to give her a new trial. But there is an antecedent question: subject-matter jurisdiction. The Act contains this proviso:

No claim shall be cognizable in a suit brought [in federal court]--(A) if the amount in controversy of any individual claim is less than the sum or value of $25; (B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests [sic] and costs) computed on the basis of all claims to be determined in this suit; or (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.

15 U.S.C. § 2310(d)(3). This allows 100 or more small claims to be litigated in one case, without regard to the anti-aggregation rules in litigation under 28 U.S.C. § 1332. Although the supplemental jurisdiction statute, 28 U.S.C. § 1367, now makes it possible to add class members with small stakes if any party's claim meets the jurisdictional minimum, see Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928 (7th Cir.1996), § 2310(d) cuts out the need for that single large claim. Even when there is just one plaintiff, the $50,000 minimum in § 2310(d)(3) is easier to satisfy than the current minimum in § 1332(a). Gardynski-Leschuck filed her suit just before the jurisdictional minimum in § 1332 was raised from $50,000 to $75,000, and the parties are of diverse citizenship. It therefore turns out not to matter whether § 2310(d) or § 1332 governs, and we have no occasion to inquire whether Article III permits Congress to dispense with all aspects of the diversity requirement in a case resting on state law, as § 2310(d)(1) does. Cf. State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). Under either § 1332 or § 2310, unless the plaintiff has a bona fide claim for the jurisdictional minimum, the case must be dismissed. Gardynski-Leschuck does not have such a claim, and her suit does not come within federal jurisdiction.

Gardynski-Leschuck leased a Ford Mustang in February 1996. The car had a purchase price of some $18,500, and this is the figure that matters for jurisdictional purposes. The lease was a financing arrangement, a substantial part of the monthly payment represented interest, and § 2310 (d)(3) requires the exclusion of "interests and costs" from the jurisdictional calculus. (Suber v. Chrysler Corp., 104 F.3d 578, 585 (3d

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Cir.1997), counts finance charges toward the jurisdictional minimum in a warranty case but does not attempt to reconcile this with the statutory exclusion of "interest". We need not decide whether reconciliation is possible, because Gardynski-Leschuck does not argue that finance charges should be counted.) Between February 1996 and July 1997 Gardynski-Leschuck took the car in for service 16 times; it spent approximately 4 months under repair. Let us suppose that the car was a lemon that could not be fixed and therefore had to be replaced or the purchase price refunded. (Ford contends that Gardynski-Leschuck abused the car by using it for racing, a defense the jury may have accepted, but this does not matter for jurisdictional purposes.) The standard remedy under state law for delivery of a defective and useless product is "cover"--the purchase of a conforming product in the market, with damages equal to the price difference. See § 2-712(1) of the Uniform Commercial Code, which Illinois has enacted at 810 ILCS 5/2-712(1). But the cost of cover would be the maximum award. Gardynski-Leschuck had the car for 17 months. Four of these it spent in the shop; the other 13 it was available for use. So one would think that the maximum award is the price of a new Mustang, less credit for the used car returned to Ford and the value of 13 months' use. Gardynski-Leschuck tells us that she revoked her acceptance in November 1996, so perhaps the deduction for use should be smaller, but no matter. However the calculation is run, the total is under $20,000 (and likely short of $5,000), leading us to question the existence of subject-matter jurisdiction.

In response to our request for supplemental briefs, Gardynski-Leschuck submitted this calculation of recoverable damages:

  1. Cost of Vehicle $18,491.99 2. Loss of Use $2,770.00 3. Aggravation/Inconvenience $750.00 4. Reasonable Attorneys' Fees $28,020.00 __________ Total $50,031.99

This barely makes the statutory floor. If...

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