Ninth Circuit Panel Holds Attorneys' Fees May Be Included In The Magnuson-Moss Warranty Act's Amount In Controversy When Available To Prevailing Plaintiffs

• Published date: 09 June 2022
• Subject Matter: Consumer Protection, Litigation, Mediation & Arbitration, Class Actions, Dodd-Frank, Consumer Protection Act
• Law Firm: Foley & Lardner
• Author: Mr Jaikaran Singh and Jessica N. Walker

In Shoner v. Carrier Corporation, No. 20-56327 (9th Cir. Apr. 14, 2022), the Ninth Circuit recently held awardable attorneys' fees can be counted toward the minimum amount in controversy required by the Magnuson-Moss Warranty Act (MMWA) for federal court jurisdiction to exist.

The plaintiff, Nicholas Shoner, brought a putative class action asserting express and implied state law warranty claims, along with a federal MMWA claim based on his allegation that the purchased air conditioner was defective. In a separate memorandum disposition, the Ninth Circuit had previously affirmed the district court's dismissal of Shoner's state law claims, over which the district court properly had jurisdiction pursuant to the Class Action Fairness Act (CAFA). But in dismissing all of the plaintiff's state law claims, the district court did not address whether it had subject matter jurisdiction over the remaining MMWA claim. Following the district court's dismissal of all of Shoner's claims, a different panel of the Ninth Circuit clarified, in Floyd v. Am. Honda Motor Co., 966 F.3d 1027, 1034 (9th Cir. 2020), that a plaintiff asserting an MMWA class claim must name 100 class members in the complaint. On appeal, in his reply brief, Shoner admitted the district court therefore lacked jurisdiction over the MMWA class claim but argued the district court still had federal question jurisdiction over his individual MMWA claim.

Although the MMWA is a federal law, federal courts do not have jurisdiction over an MMWA claim if the amount in controversy is less than $50,000. The MMWA provides that federal jurisdiction is not available under certain circumstances, including "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 this suit." 15 U.S.C. ' 2310(d)(3) (emphasis added).

Here Shoner alleged he paid $1,266 for his allegedly defective air conditioner and argued his awardable attorneys' fees could provide the remaining $48,000 required. The panel in Shoner therefore was presented with the narrow question of whether attorneys' fees are considered "costs" and thus do or do not count toward the MMWA's amount in controversy requirement, an issue that had not yet been addressed in the Ninth Circuit.

Four circuits have held attorneys' fees are "costs" under the MMWA and are therefore excluded from the amount in controversy calculation. The Fourth Circuit first analyzed this issue...