Argued: October 27, 2016
plaintiff-appellant, Maya Pyskaty, purchased a
''certified pre-owned'' BMW for $51, 195 from
defendant-appellee Wide World of Cars, LLC, located in Spring
Valley, New York. After the vehicle allegedly presented
problems serious enough to prevent her from driving it
regularly, Pyskaty brought this action in the United States
District Court for the Southern District of New York alleging
claims under the Magnuson-Moss Warranty-Federal Trade
Commission Improvement Act, 15 U.S.C. § 2301 et
seq., and New York State law. The primary issue on
appeal is whether there is federal subject-matter
jurisdiction over Pyskaty's claims under the Act, which
requires an amount in controversy of at least $50, 000.
See 15 U.S.C. § 2310(d)(3)(B). The district
court (Judith C. McCarthy, Magistrate Judge)
dismissed the action for lack of subject-matter jurisdiction
on the grounds that Pyskaty's claims under the Act did
not satisfy the amount-in-controversy requirement, and that
Pyskaty could neither add punitive damages under the Act nor
rely on the value of her state-law claims to meet the
jurisdictional threshold. We conclude that the first of these
determinations was erroneous because the value of
Pyskaty's rescission claim under the Act exceeds $50,
000. The judgment of the district court is therefore:
A. Schlanger, Kakalec & Schlanger, LLP, New York, NY, for
V. LaRose, LaRose & LaRose, Poughkeepsie, NY, for
Defendant-Appellee Wide World of Cars, LLC.
Before: Sack, Raggi, and Chin, Circuit Judges.
Maya Pyskaty appeals from the district court's dismissal
of her amended complaint against defendants-appellees Wide
World of Cars, LLC ("WWC") and BMW Bank of North
America ("BMW Bank"), alleging violations of the
Magnuson-Moss Warranty-Federal Trade Commission Act
("MMWA" or "the Act"), 15 U.S.C. §
2301 et seq, and New York State law. In October
2013, Pyskaty purchased a "certified pre-owned" BMW
from WWC, which she financed in part through a loan from BMW
Bank. When the vehicle allegedly proved to be incurably
defective, Pyskaty brought this lawsuit in the United States
District Court for the Southern District of New York,
asserting claims for (1) breach of express and implied
warranties under the MMWA; and (2) deceptive acts and
practices, breach of express and implied warranties, and
fraud under New York State law. In connection with her MMWA
claims, Pyskaty principally sought actual damages or, in the
alternative, cancellation and rescission of the purchase
agreement. In connection with her state-law claims, Pyskaty
sought, inter alia, actual damages, capped treble
damages, and punitive damages.
moved to dismiss the amended complaint for lack of
subject-matter jurisdiction, arguing that Pyskaty did not
satisfy the MMWA's $50, 000 minimum-amount-in-controversy
requirement. See 15 U.S.C. § 2310(d)(3)(B). The
district court (Judith C. McCarthy, Magistrate
Judge) granted the motion, agreeing with WWC that the
value of Pyskaty's MMWA claims did not amount to $50, 000
and that Pyskaty could neither amend her complaint to add a
claim for punitive damages under the MMWA, nor rely on the
value of her state-law claims, to meet the jurisdictional
we conclude that the value of Pyskaty's MMWA claims, as
pled, exceeds $50, 000, we reverse the district court's
decision and remand for further proceedings.
October 31, 2013, Pyskaty visited WWC, an automobile
dealership located in Spring Valley, New York, seeking to
purchase a "certified pre-owned"
("CPO') BMW for her personal use. Amended
Complaint ("Compl.") ¶¶ 10, 13. She
inquired about the history of a 2010 BMW 750LXI (the
"Vehicle") tagged "CPO, " and asked
specifically whether it had ever been in an accident.
Id. ¶¶ 20-21. According to Pyskaty, the
WWC salesman responded that the Vehicle had no accident
history, was ''perfect, '' and had a
''clean'' CARFAX report. Id. ¶
22. The salesman then showed Pyskaty a
purportedly clean CARFAX report dated October 31, 2013, and
affirmed that the Vehicle had passed the mandatory inspection
for CPO BMWs. Id. ¶¶ 24-25. Allegedly
relying on these representations, Pyskaty
agreed to purchase the Vehicle for $51, 195. Id.
¶ 27. Pyskaty financed the purchase by putting down a
$2, 000 deposit, trading in her 2010 BMW M5, and obtaining a
loan from BMW Bank for the balance of the purchase
price. Id. ¶ 28; see also
id. ¶ 12.
a week after the purchase, Pyskaty allegedly began
experiencing problems while driving the Vehicle.
Specifically, she alleged that the Vehicle ''ran
rough, '' ''vibrated while driving,
'' and ''consumed large amounts of
oil.'' Id. ¶¶ 29, 32-34. The
Vehicle later presented additional, more worrisome issues,
including intermittent loss of power steering, lack of power
on acceleration, malfunctioning door locks, and engine
sluggishness while in reverse. Id. ¶¶ 42,
50, 59, 81, 83. Between November 2013 and May 2014, Pyskaty
visited multiple service centers and paid for several repairs
in an attempt to fix the Vehicle. See id.
¶¶ 35, 40, 42-45, 48, 51, 53-54, 57,
59-62. The problems persisted, however, and
in June 2014, Pyskaty returned to WWC seeking to
''revoke [her] acceptance of the [V]ehicle and
arrange for [a] return, rescission, and refund.''
Id. ¶¶ 73-74. WWC indicated that it would
accept the Vehicle only as a trade-in on another automobile
that Pyskaty would have to purchase, and that it would value
the Vehicle at $35, 000 for that purpose. Id.
¶¶ 75-76. Pyskaty declined this offer because, she
asserts, it would have left her with a substantial balance
owed to BMW Bank pursuant to the retail installment contract
by which she purchased her defective car. Id. ¶
thereafter, Pyskaty began to suspect that the Vehicle had
been damaged in an accident before she purchased it, contrary
to the CARFAX report that she was shown in October 2013.
Id. ¶ 78. On June 12, 2014, Pyskaty obtained an
AutoCheck report,  which confirmed that the Vehicle had
in fact sustained a rear-impact collision on August 24, 2012.
Compl. ¶¶ 79-80. Allegedly
''[f]eeling both unsafe and uncomfortable driving the
[V]ehicle given its numerous defects, [Pyskaty] took the
Vehicle off the road'' and parked it in a garage
where it has remained since. Id. ¶ 84.
March 4, 2015, Pyskaty filed this lawsuit against the
defendants in the United States District Court for the
Southern District of New York. The parties consented to have
a magistrate judge conduct all proceedings in the litigation,
including the entry of final judgment, in accordance with 28
U.S.C. § 636(c).
30, 2015, Pyskaty filed an amended complaint alleging that
the Vehicle she purchased for $51, 195 was in fact worth only
$20, 478 at the time of sale "in light of [its]
undisclosed defects and history." Id. ¶
94. Pyskaty further alleged that the Vehicle, which was
"unsafe to drive and inoperable on public streets,
" had a current value of approximately $14, 865.
Id. ¶¶ 93, 95. Finally, Pyskaty alleged
that WWC must have known at the time of sale that its
representations regarding the Vehicle's condition and
history were "materially false, " id.
¶ 89, because "[t]he Vehicle exhibited] a plethora
of traits that, although not apparent to the layperson, would
unequivocally inform a BMW dealership . . . that the
[V]ehicle had been in a major accident, " id.
on these allegations, Pyskaty asserted claims against the
defendants for: (1) breach of express and implied warranties
under the MMWA and New York Uniform Commercial Code
("N.Y. U.C.C.") §§ 2-313, 2-314; (2)
common law fraud; and (3) false advertising and deceptive
acts and practices under N.Y. Gen. Bus. Law §§ 349,
350. See id. ¶¶ 100-64. In connection with
her MMWA claims, Pyskaty sought actual damages (or,
alternatively, cancellation and rescission), attorney's
fees, costs, and a declaratory judgment. Id. ¶
165(a)-(b). In connection with her state-law claims, Pyskaty
sought actual damages, capped treble damages, punitive
damages, attorney's fees, costs, and injunctive and
declaratory relief. Id. ¶ 165(c)-(g).
August 21, 2015, WWC moved to dismiss the complaint for lack
of subject-matter jurisdiction, arguing, inter alia,
that Pyskaty's claims did not meet the MMWA's $50,
000 amount-in-controversy requirement for federal
jurisdiction. See Mem. of Law in Support of Mot. to
Dismiss, Pyskaty v. Wide World of Cars, LLC, No.
15-cv-1600 (S.D.N.Y. Aug. 21, 2015), ECF No. 18, at
support, WWC argued that Pyskaty was not entitled to a refund
under the MMWA because WWC had issued only
"limited" warranties, which are "not subject
to the Act's extensive remedies including a refund of the
purchase price." Id. at 3. WWC further argued
that the maximum actual damages Pyskaty could recover under
the MMWA-calculated by subtracting the alleged true value of
the Vehicle from the purchase price-amounted to only $30,
717. Id. at 4; see also Affirmation of
Keith V. LaRose, Pyskaty v. Wide World of Cars, LLC,
No. 15-cv-1600 (S.D.N.Y. Aug. 21, 2015), ECF No. 17, at 9.
opposition, Pyskaty argued, inter alia, that the
amount in controversy under the MMWA is to be "computed
on the basis of all claims to be determined in this
suit, " including Pyskaty's state-law claims. Mem.
of Law in Opposition to Mot. to Dismiss, ECF No. 30, at 11
(emphasis partially omitted) (quoting 15 U.S.C. §
2310(d)(3)(B); see also id. at 12-13. Viewed in the
aggregate, Pyskaty contended, the value of all claims alleged
in the amended complaint "far exceed[ed] the
jurisdictional requirement of $50, 000." Id. at
13. Pyskaty also argued that she was entitled under the MMWA
to elect a remedy of revocation or rescission-either of
which, she asserted, would itself be worth more than $50,
000. Id. at 14-15. Finally, Pyskaty requested leave
to amend her complaint to seek punitive damages under the
MMWA, thereby augmenting the value of her MMWA claims.
Id. at 16-17 & n4.
February 23, 2016, the district court issued a decision
granting WWC's motion and closing the case. See
Pyskaty v. Wide World of Cars, LLC, No. 15-cv-1600
(JCM), 2016 WL 828135, 2016 U.S. Dist. LEXIS
21945 (S.D.N.Y. Feb. 23, 2016). The district court based its ruling on
three principal conclusions. First, the value of
Pyskaty's state-law claims could not be counted toward
the jurisdictional amount in controversy. Id. at *5,
2016 U.S. Dist. LEXIS 21945, at *14-16. Second, Pyskaty's
alleged actual damages under the MMWA amounted to only $30,
717,  and Pyskaty "could not use
[the] proposed punitive damages to meet the MMWA
minimum" because she was not entitled to recover such
damages under New York State law. Id. at
*7, 2016 U.S. Dist. LEXIS 21945, at *20-21. Third,
even if Pyskaty were entitled to revocation or rescission
under the MMWA, the value of those remedies, too, would fall
below the requisite $50, 000 threshold. Id. at
*7-9 & n.14, 2016 U.S. Dist. LEXIS 21945, at
*23-28 & n.14.
MMWA, also known as the federal ''lemon law,
'' is a remedial statute designed
''to improve the adequacy of information available to
consumers, prevent deception, and improve competition in the
marketing of consumer products.'' Motor Vehicle
Mfrs. Ass'n of U.S., Inc. v. Abrams, 899 F.2d 1315,
1317 (2d Cir. 1990) (quoting 15 U.S.C. § 2302(a)). To
achieve these goals, the Act permits ''a consumer who
is damaged by the failure of a supplier, warrantor, or
service contractor to comply with . . . a written warranty
[or] implied warranty . . . [to] bring suit for damages and
other legal and equitable relief.'' 15 U.S.C. §
2310(d)(1). The Act provides for federal jurisdiction,
however, only where specified requirements are satisfied.
Relevant here, the Act states that MMWA claims may be brought
in federal ...