Alam v. BMW of N. Am., LLC

• Decision Date: 29 July 2020
• Docket Number: 1:19-CV-22-LY
• Parties: MOHAMMED ALAM v. BMW OF NORTH AMERICA, LLC
• Court: U.S. District Court — Western District of Texas

MOHAMMED ALAM v. BMW OF NORTH AMERICA, LLC

1:19-CV-22-LY

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION

July 29, 2020

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

TO: THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE

Before the Court are Defendant BMW of North America, LLC's Motion to Dismiss Pursuant to Rules 12(b)(1) and 12(b)(6) (ECF 35), Plaintiff's Opposition (ECF 40), and BMW's Reply (ECF 41). The District Court referred the above motion to the undersigned Magistrate Judge for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(A), FED. R. CIV. P. 72, and Rule 1(c) of Appendix C of the Local Rules.

I. GENERAL BACKGROUND

Plaintiff Mohammed Alam brings this case alleging express and implied warranty claims under the Magnuson-Moss Warranty Act ("the MMWA") and the Texas Business and Commerce Code, and violations of Texas Deceptive Trade Practices Act ("DTPA"). The suit was originally filed in conjunction with similar claims made by seven others, but the cases were ordered severed on the recommendation of the undersigned, leading to the filing of Alam's Second Amended Complaint (ECF 33), the live pleading in this case. In that complaint, Alam alleges that in 2014 he purchased a 2012 BMW 7 Series 750 Li from BMW of Austin as a "certified pre-owned vehicle," paying either just under $59,000 or slightly more than $62,000.¹ After purchase, he alleges heexperienced problems with the engine consuming an excessive amount of oil, and ultimately discovered that the engine in this car—the "N63" BMW engine—is allegedly defective, in that it consumes excessive engine oil. In January 2019 he filed this lawsuit, through which he seeks damages, revocation of the sales transaction, a refund of the purchase price, the repair or replacement of the vehicle, incidental damages, treble damages under the DTPA, punitive damages, and attorney's fees. See ECF 33 at 25.

In the present motion, BMW asks the Court to dismiss Alam's suit for lack of jurisdiction, or, alternatively, to dismiss some or all of the claims under Rule 12(b)(6). The Second Amended Complaint alleges the Court has federal question jurisdiction over the case as a result of the MMWA claim, and pendent jurisdiction over the remaining claims. ECF 33 at 2 ¶ 7. In the motion to dismiss, BMW argues that: (1) Alam has failed to meet the amount in controversy requirement of $50,000 under the MMWA, and the Court therefore lacks subject matter jurisdiction; (2) the statute of limitations bars Plaintiffs' claims; and (3) Alam failed to allege essential elements of his claims.

II. STANDARDS OF REVIEW

A. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) allows a party to assert lack of subject-matter jurisdiction as a defense to suit. Federal district courts are courts of limited jurisdiction, and may only exercise such jurisdiction as is expressly conferred by the Constitution and federal statutes. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A federal court properly dismisses a case for lack of subject matter jurisdiction when it lacks the statutory or constitutional power to adjudicate the case. Home Builders Assn. of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). "The burden of proof for a Rule 12(b)(1) motion to dismiss is on the partyasserting jurisdiction." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied, 536 U.S. 960 (2002). "Accordingly, the plaintiff constantly bears the burden of proof that jurisdiction does in fact exist." Id. In ruling on a Rule 12(b)(1) motion, the court may consider any one of the following: (1) the complaint alone; (2) the complaint plus undisputed facts evidenced in the record; or (3) the complaint, undisputed facts, and the court's resolution of disputed facts. Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008). Where a defendant attacks jurisdiction based solely on the allegations of the complaint, as here, the plaintiff's factual allegations are presumed to be true. O'Rourke v. United States, 298 F.Supp.2d 531, 534 (E.D. Tex. 2004). Dismissal for lack of subject matter jurisdiction is appropriate when the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief. Warnock v. Pecos County, Tex., 88 F.3d 341, 343 (5th Cir. 1996). When a Rule 12(b)(1) motion is filed with a Rule 12(b)(6) motion, the court should consider the jurisdictional attack before addressing the 12(b)(6) motion. Rodriguez v. Texas Comm'n on the Arts, 992 F.Supp. 876, 879 (N.D. Tex. 1998), aff'd, 199 F.3d 279 (5th Cir. 2000).

B. Rule 12(b)(6)

Rule 12(b)(6) allows a party to move to dismiss an action for failure to state a claim upon which relief can be granted. In deciding a Rule 12(b)(6) motion "[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the [nonmovant]." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks omitted), cert. denied, 552 U.S. 1182 (2008). The Supreme Court has explained that a complaint must contain sufficient factual matter "to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the [nonmovant] pleads factual content that allows the court to draw the reasonable inference that the [movant] is liable for the misconduct alleged." Id. The court's review is limited to the complaint, any documents attached to the complaint, and any documents attached to themotion to dismiss that are central to the claim and referenced by the complaint. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).

III. DISCUSSION

A. Subject Matter Jurisdiction

As noted, Alam contends the Court has jurisdiction over this case as a result of the federal question raised by his MMWA claim, along with pendent jurisdiction over the remaining claims. The MMWA grants "consumers" a right to sue for a violation of the provisions of the Act itself, as well as breach of a written or implied warranty. Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1062-63 (5th Cir. 1984). With regard to warranty claims, the MMWS does not create a separate statutory warranty claim, "but instead provides a federal cause of action for state law express and implied warranty claims." Taliaferro v. Samsung Telecomms. Am., LLC, 2012 WL 169704 at *10 (N.D. Tex. Jan. 19, 2012). It also contains its own "amount in controversy" requirement, providing that "if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in th[e] suit," the federal courts lack jurisdiction. 15 U.S.C. § 2310(d)(3)(B)). See also Scarlott v. Nissan N.A., Inc., 771 F.3d 883, 887 (5th Cir. 2014). In Scarlott, the Fifth Circuit has noted that there are

several limitations in calculating the amount in controversy under the MMWA. First, personal injury damages for breach of warranty, which are not recoverable under the MMWA, may not be counted to satisfy the jurisdictional amount. Second, attorneys fees may not be used to satisfy the jurisdictional amount, because the MMWA requires that the amount in controversy be calculated "exclusive of interests and costs." Last, damages for any pendent state-law claims should not be included to satisfy the jurisdictional amount.

Id. at 887-88 (citations omitted). For jurisdiction to be lacking, "[i]t must appear to a legal certainty that the claim is really for less than the jurisdictional amount." De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995) (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)).

Alam argues that the Court must include the DTPA damages in the MMWA "amount in controversy" analysis, and disputes that the Fifth Circuit held to the contrary in Scarlott. ECF 40 at 8-9. His sole arguments that there is more than $50,000 at issue in this case rely either on trebling his damages under the Texas DTPA, or arguing he is entitled to a refund of the full purchase price of the car, also under the DTPA. Id. 5, 7-8. Alam reads Scarlott incorrectly; indeed, Scarlott is crystal clear in its statement that "damages for any pendent state-law claims should not be included to satisfy the jurisdictional amount" under the MMWA. Scarlott, 771 F.3d at 888. Thus, while the Court could consider treble damages under the DTPA if it were conducting a diversity jurisdiction analysis of the amount in controversy (such as that recently conducted by Judge Hightower in the BMW case Llort v. BMW of North America, No. 1:20-cv-0094 LY, Report & Recommendation (W.D. Tex June 2, 2020)), the Court may not do so when determining the amount in controversy in an MMWA claim. As mentioned earlier, Alam has invoked this Court's subject matter jurisdiction based only on federal question jurisdiction, and has explicitly not contended that the Court has jurisdiction based on diversity of citizenship, and thus the Court's analysis is so constrained.²

Because the Court does not look at the damages recoverable under the pendent state-law claims, the primary question presented here is whether Alam has demonstrated with his Second Amended Complaint that there is at least $50,000 in controversy on his MMWA warranty claims. In the Report and Recommendation on the motion to sever, the undersigned noted that the First Amended Complaint lacked specificity on the damages sought by the plaintiffs, and suggested thatthe Court warn Alam that he must remedy that in any amended complaint he filed after severance. ECF 20 at 6 n.1, 7. The district judge adopted that recommendation, and included in his order severing the cases the admonition that in repleading his case individually, Alam was to do so "with sufficient particularity to demonstrate the amount he contends is in...