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Morano v. BMW of North America, LLC

United States District Court, D. New Jersey

June 11, 2015

JOHN J. MORANO, individually, and on behalf of all others similarly situated, Plaintiff,
v.
BMW OF NORTH AMERICA, LLC, Defendant.

OPINION

KEVIN McNULTY, District Judge.

While this motion was pending, boxing fans observed the 50th anniversary of the 1965 Ali/Liston fight. In an iconic photo, Muhammed Ali stands over a supine Sonny Liston, exhorting him to "Get up and fight."[1] Defendant, BMW of North America, LLC ("BMW"), finds itself in much the same position. The court, however, has no sporting interest in the continuation of this lawsuit, and will not force an unwilling plaintiff to pursue his federal claims. The motion of the plaintiff, John J. Morano, for voluntary dismissal of his complaint without prejudice, under Fed.R.Civ.P. 41(a)(2) (ECF No. 58), will be granted.

The background of the parties and claims has been fully laid out in an earlier opinion (ECF No. 32), and will only be briefly summarized here. Morano has brought a putative class action against BMW of North America, LLC ("BMW") for violations of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), breach of contract, breach of the covenant of good faith and fair dealing, breach of warranty, and punitive damages. On March 1, 2013, I denied BMW's motion to dismiss Morano's complaint. (ECF Nos. 32, 33) There has been no motion for class certification, and no class has been certified.

Allegedly, Morano leased a new BMW automobile and discovered that the vehicle's battery would not hold a charge. Morano requested that his BMW dealer replace the battery pursuant to BMW's maintenance program. The BMW dealer refused, determining that Morano's battery problems were excluded from coverage under BMW's warranty because they were caused by "unfavorable customer usage." Morano alleges that BMW wrongly denied warranty coverage and failed to clearly disclose the exclusion.

In his complaint, Morano seeks damages (essentially for his and similarly situated BMW owners' purchases of replacement batteries), as well as an injunction compelling BMW to change its warranty policy. Through discovery, however, Morano has discovered that BMW modified its policy in April 2011, about ten months before he filed his complaint. Under BMW's amended policy, Morano's repair would be covered. He concedes that his requested injunctive relief is therefore moot.

Morano does not wish to proceed with this federal action. He seeks to dismiss the action voluntarily and without prejudice, pursuant to Federal Rule of Civil Procedure 41(a)(2).

Rule 41(a)(1) allows a plaintiff to voluntarily dismiss an action as of right only if (1) the plaintiff provides "a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment"; or (2) "a stipulation of dismissal [is] signed by all parties who have appeared." Otherwise, as in this case, dismissal is by leave of the court: "Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." Fed.R.Civ.P. 41(a)(2). "Unless the order states otherwise, a dismissal under [Fed. R. Civ. P. 41(a)(2)] is without prejudice." Id.

Here, Morano moves for dismissal because he has discovered that this Court does not have, and never had, subject matter jurisdiction over his complaint. To attempt to proceed further in federal court, he believes, would be quixotic. In the end, it does not much matter whether Morano's reasons for wanting to dismiss his complaint are good ones. I nevertheless briefly discuss the jurisdictional issue.

Jurisdiction over this proposed class action is founded on diversity, pursuant to 28 U.S.C. § 1332, as supplemented and amended by the Class Action Fairness Act of 2005. To qualify, the claims of the proposed class must exceed $5 million in value. See 28 U.S.C. § 1332(d)(2).[2] Where damages are sought, the value of a claim may, of course, be measured by their dollar amount. Where injunctive relief is sought, the plaintiff may attempt to assign a dollar value to that claim in order to meet the diversity threshold.[3]

Jurisdiction is measured as of the date of filing of the complaint. It is not lost through changed circumstances (for example, a once-diverse party's change of state citizenship). A court will, however, find that there is no subject matter jurisdiction "if after the case is filed it is discovered that there was no jurisdiction at the outset." Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 807 (7th Cir. 2010) (citing Church of Scientology of California v. United States, 506 U.S. 9, 12 (1992); Rockwell Int'l Corp. v. United States, 549 U.S. 457, 473-74 (2007)). In particular, subject matter jurisdiction will be found lacking where, after the filing of a complaint, "subsequent revelations' [show] that, in fact, the required statutory amount was not in controversy at the commencement of the action." Huber v. Taylor, 532 F.3d 237, 244 (3d Cir. 2008) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 290 (1938)). The distinction is "between subsequent events that change the amount in controversy and subsequent revelations that, in fact, the required amount was or was not in controversy at the commencement of the action." Id. (quoting Jones v. Knox Exploration Corp., 2 F.3d 181, 183 (6th Cir. 1993) (emphasis added).

Morano says that discovery has revealed that the amount in controversy at the time of filing did not exceed $5 million.

Morano concedes that, because BMW changed its warranty policy in 2011, his request for injunctive relief is moot. He now knows that it was moot at the time he filed his complaint in 2012. The dollar value of the object of injunctive relief, then, is zero. BMW does not seem to disagree.

That leaves damages. Morano argues that discovery has revealed that the claims of the proposed class members could not possibly have added up to $5 million at the time of filing of the complaint; in fact, based on his calculations, potential damages total something less than $50, 000.

The number of vehicles sold or leased within the time period covered by the proposed class is about 115, 000, as the parties agree. (Welling Decl. ¶ 9; Def. Opp. 5) Morano cites to evidence produced by BMW, which shows that there are currently 4, 577 Florida owners of BMW 6 Series vehicles (the particular model Morano leased). ( Id. 6 (citing Welling Decl. Ex. 5 at 5)) BMW is aware of only two other consumers, apart from Morano, who were denied a replacement battery based on an "unfavorable driving profile." ( Id. (citing Welling Decl. Ex. 5 at 6)) Morano calculates that the number of BMW 6 series vehicle owners allegedly harmed by BMW's policy, then, is 3 out of 4, 577, or 0.00066%. ( Id. ) That percentage, applied to the total of 115, 000 vehicles sold or leased in the relevant period, implies that the proposed class consists of approximately 75 consumers. If each of those 75 paid $150 for a replacement battery, the total of compensatory damages would be $11, 250. Morano assumes attorneys' fees at a rate of 30%, which would yield a total of $3, 375. Because Florida limits punitive damages to three times compensatory ...


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