                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-3611
DONALD SCHIMMER,
                                               Plaintiff-Appellant,
                                 v.

JAGUAR CARS, INC.,
                                              Defendant-Appellee.

                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
              No. 03 C 1884—Amy J. St. Eve, Judge.
                          ____________
   ARGUED APRIL 6, 2004—DECIDED SEPTEMBER 14, 2004
                     ____________




  Before RIPPLE, KANNE and ROVNER, Circuit Judges.
  KANNE, Circuit Judge.


                           I. History
  On January 15, 2000, Donald Schimmer bought a new
2000 Jaguar XK8, manufactured by Jaguar Cars, Inc., from
Towne & Countree Auto Sales, Inc. Schimmer paid the
$69,513.00 purchase price in cash.
  Jaguar provided a limited written manufacturer’s war-
ranty to repair or replace any nonconformities or defects in
2                                               No. 03-3611

material or workmanship for three years or thirty-six
thousand miles. Schimmer encountered various problems
with the XK8 and took the car to authorized Jaguar deal-
erships for repairs under the manufacturer’s warranty on
numerous occasions.
  After the dealers were unable to repair the XK8 to
Schimmer’s satisfaction, Schimmer’s lawyer notified Jaguar,
in a letter dated November 6, 2001, that Schimmer had re-
voked his acceptance of the vehicle. Jaguar refused to accept
Schimmer’s revocation. Subsequent to the purported revo-
cation, the XK8 has remained in storage.
  On February 13, 2003, Schimmer filed a four-count com-
plaint in Illinois state court, alleging violations of the
Magnuson-Moss Warranty Act of 1975, 15 U.S.C. §§ 2301,
et seq. (“Magnuson-Moss Act”) and the Illinois New Vehicle
Buyer Protection Act, 815 Ill. Comp. Stat. 380/1, et seq.
(“Illinois Lemon Law”). Counts I, II, and III alleged breach
of written warranty, breach of implied warranty, and revo-
cation of acceptance, respectively, pursuant to the Magnuson-
Moss Act. Count IV alleged a violation of the Illinois Lemon
Law. For each of the four counts, Schimmer’s complaint
demanded the return of all money paid, reimbursement for
diminution in value of the vehicle, incidental and con-
sequential damages, attorneys’ fees, and any further relief
that the court found appropriate. Schimmer also averred
that to the best of his knowledge, the amount in controversy
exceeded $50,000.00.
  Jaguar filed a timely notice of removal to federal district
court on March 17, 2003, asserting that the court had
federal subject-matter jurisdiction under the Magnuson-
Moss Act. Once in federal court, Jaguar moved to dismiss
Counts II and III of the complaint—Schimmer’s breach of
implied warranty and revocation claims under the Magnuson-
Moss Act—as well as Count IV, the state law claim. In its
No. 03-3611                                                 3

Memorandum Opinion and Order ruling on the motion to
dismiss, the district court, without discussion, noted that
because Schimmer’s complaint alleged damages in excess of
$69,513.00 (the purchase price of the car) the Magnuson-Moss
Act’s $50,000 amount in controversy requirement was
satisfied and thus federal subject-matter jurisdiction ex-
isted over the Magnuson-Moss Act claims. Schimmer v.
Jaguar Cars, Inc., No. 03 C 1884, 2003 U.S. Dist. LEXIS
11226, at *6 (N.D. Ill. Jul. 1, 2003). The district court also
found that it had supplemental jurisdiction under 28 U.S.C.
§ 1367 to hear Schimmer’s Illinois Lemon Law claim. Id.
The court then granted Jaguar’s motion on Counts II, id. at
*8-9, and IV, id. at *13, but denied dismissal of Count III,
id. at *10-11.
   A jury trial ensued on Schimmer’s remaining claims for
breach of written warranty (Count I) and revocation of ac-
ceptance (Count III). The jury returned a verdict in favor of
Jaguar, and on September 17, 2003, final judgment was
entered against Schimmer. Schimmer filed a timely notice
of appeal on September 30, 2003. On appeal, Schimmer
argues that the district court did not have jurisdiction over
the Magnuson-Moss Act claims because the amount in
controversy did not meet the $50,000 threshold required by
the Act, rendering Jaguar’s removal improper and necessi-
tating remand to the state court. In the alternative,
Schimmer argues that the district court’s dismissal of his
Illinois Lemon Law claim was in error.


                       II. Analysis
  The first question presented on appeal is whether re-
moval to federal court was appropriate. “Removal is proper
over any action that could have originally been filed in fed-
eral court.” Chase v. Shop ‘N Save Warehouse Foods, Inc.,
110 F.3d 424, 427 (7th Cir. 1997) (citing 28 U.S.C. § 1441).
Federal subject-matter jurisdiction exists when a claim arises
4                                                No. 03-3611

under federal law. See 28 U.S.C. § 1331. The Magnuson-
Moss Act allows a plaintiff to sue in federal court for breach
of warranty, 15 U.S.C. § 2310(d)(1), provided that certain
jurisdictional thresholds are met. Among other jurisdic-
tional restrictions not applicable here, claims under the
Magnuson-Moss Act may only be brought in federal court if
the amount in controversy reaches “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[.]”
§ 2310(d)(3)(B).
  When a defendant removes a case from state to federal
court, the defendant must demonstrate to a “reasonable
probability” that subject-matter jurisdiction exists. Chase,
110 F.3d at 427; Shaw v. Dow Brands, Inc., 994 F.2d 364,
366 (7th Cir. 1993) (citing Wilson v. Republic Iron & Steel
Co., 257 U.S. 92, 97 (1921)). Hence, to justify removal under
the Magnuson-Moss Act, Jaguar needed to show that, at the
time the case was removed, it was reasonably probable that
the amount in controversy exceeded $50,000. See Uhl v.
Thoroughbred Tech. & Telecomms., Inc., 309 F.3d 978, 983
(7th Cir. 2002) (the amount in controversy “is determined by
an evaluation of the controversy described in the plaintiff’s
complaint and the record as a whole”); BEM I, L.L.C. v.
Anthropologie, Inc., 301 F.3d 548, 552 (7th Cir. 2002)
(amount in controversy determined as of the date of re-
moval). Based on the relief available under the Magnuson-
Moss Act for the causes of action pled in Schimmer’s
complaint, we conclude that no such showing is possible,
and hence, removal was improper.
  Schimmer alleged three different counts under the
Magnuson-Moss Act, all of which pray for the same broad
relief, including a full refund of the $69,513.00 purchase
price. Jaguar argues that, by itself, the $69,513.00 refund
request satisfies the Magnuson-Moss Act’s amount in
No. 03-3611                                                    5

controversy requirement.1 Jaguar’s proposed analysis is too
simplistic. Merely to accept the amount claimed in the
complaint as the amount in controversy sidesteps the “rea-
sonable probability” analysis.
  The Magnuson-Moss Act “allows a ‘consumer’ to bring a
suit where he claims 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.” Voelker v. Porsche
Cars N. Am., Inc., 353 F.3d 516, 525 (7th Cir. 2003) (quot-
ing 15 U.S.C. § 2310(d)(1)). There are two types of written
warranties under the Act: full warranties and limited
warranties. See 15 U.S.C. § 2303(a).
  Section 2304 of the Act imposes minimum federal warranty
standards for “full warranties” and provides remedies for
their breach, including either a full refund of the purchase
price or a replacement of the product if the warrantor
cannot remedy defects or malfunctions after reasonable
attempts to do so. Id. Yet, as pled in the complaint, the
XK8’s warranty is a “limited” one not subject to § 2304 and
thus not subject to the Act’s substantive remedies, including
a refund of the $69,513 purchase price. See 15 U.S.C.
§ 2303(a); Mackenzie v. Chrysler Corp., 607 F.2d 1162, 1166
& n.7 (5th Cir. 1979).
  The Act also, however, allows consumers to enforce written
and implied warranties in federal court, borrowing state
law causes of action. Gardynski-Leschuck v. Ford Motor Co.,


1
   We note that Schimmer’s complaint demanded attorneys’ fees,
incidental and consequential damages, and any further relief that
the court found necessary. Because Jaguar, carrying the burden
of proof as the removing party, presented no evidence attempting
to quantify these damages, nor even pressed that these damages
should be included in the amount in controversy, we need not
consider them.
6                                               No. 03-3611

142 F.3d 955, 956 (7th Cir. 1998). When the plaintiff relies
on state law causes of action to bring a claim under the
Magnuson-Moss Act, the $50,000 amount in controversy
still must be met. Id. In such a case, we then look to state
law to determine the remedies available, which in turn
informs the potential amount in controversy. Id.; see also
Boyd v. Homes of Legend, Inc., 188 F.3d 1294, 1298 (11th
Cir. 1999) (applying Alabama law to determine whether
punitive damages were available for breach of warranty
claim); Mackenzie, 607 F.2d at 1166-67 (for breach of
limited written warranty, “resort to state law is proper in
determining the applicable measure of damages under the
Act”). We agree with the parties and the district judge that
Illinois law applies in this case.
  Jaguar insists that the $50,000 amount in controversy
requirement is met because Illinois law entitles Schimmer
to revoke acceptance and thus claim entitlement to a refund
of the purchase price of the car. See, e.g., 810 Ill. Comp.
Stat. 5/2-608, 5/2-711(1). But even if Illinois law allows a
refund of the $69,513.00 purchase price under the facts of
this case, the amount in controversy, that is, Schimmer’s
true damages, could not exceed $50,000.
  If the district court were to determine that Schimmer
could revoke his acceptance of the car and receive a refund
of the purchase price, then Jaguar would also be entitled to
re-take possession of the car (now worth only $54,013.00, as
explained below). In addition, Jaguar would also be entitled
to a credit for the value Schimmer received from his use of
the car while it was in his possession. Hence, Schimmer’s
true money damages—and concomitantly, the true amount
in controversy—would equal only the difference between
the price of the new car and the worth of the allegedly
defective car, reduced by his beneficial use of the defective
car. Jaguar could not lose $69,513, any more than
Schimmer could gain that amount. We so held in a similar
Magnuson-Moss case and calculated damages using the
No. 03-3611                                                    7

following formula: the price of a replacement vehicle, minus
both the present value of the allegedly defective car and the
value that the plaintiff received from the use of the alleg-
edly defective car. Gardynski-Leschuck, 142 F.3d at 957; see
also Voelker, 353 F.3d at 521. This formula also works to
calculate cover damages, “[t]he standard remedy under state
law for delivery of a defective and useless product[.]”
Gardynski-Leschuck, 142 F.3d at 957 (citing 810 Ill. Comp.
Stat. 5/2-712(1)).
  Here, the complaint and the record before us are suffi-
cient to determine that the amount in controversy could not
have exceeded $50,000 at the time Jaguar removed the
case. Jaguar argues that only information contained in the
complaint may be used to determine the amount in contro-
versy. Yet, as explained earlier, we are not bound to accept
at face value Schimmer’s demand for a refund, or any af-
fidavit asserting that damages claimed exceeded $50,000,
when he is not entitled at law to recover such damages. The
amount in controversy “is determined by an evaluation of the
controversy described in the plaintiff’s complaint and the
record as a whole, as of the time the case was filed.” Uhl,
309 F.3d at 983.
   We know from Schimmer’s complaint that the purchase
price of a replacement XK8 is $69,513.00 because that is
what he paid for the allegedly defective vehicle. Prior to
filing the present suit, Schimmer hired an expert to inspect
the XK8 and opine as to its diminished value based on its
alleged defects. According to the expert’s inspection of the
XK8, the car was worth $54,013.00 when Jaguar removed
the case.2 Applying the numbers to the Gardynski-



2
  The expert conducted his inspection on December 10, 2001,
which was after Schimmer placed the XK8 into storage and more
than a year prior to the filing of this suit. Assuming that any
                                                   (continued...)
8                                                 No. 03-3611

Leschuck formula, the cost of a replacement vehicle
($69,513.00) minus the present value of the defective car
($54,013.00) yields $15,500.00. To complete the formula,
this $15,500.00 figure must be further reduced by the value
that Schimmer obtained from his use of the XK8. Although
we have no way of knowing what this figure might be, even
if it is $0.00, the maximum Schimmer could recover (and
the maximum loss to Jaguar) under Illinois law would be
$15,500.00. As this figure is well below the $50,000 amount
in controversy requirement necessary to establish subject-
matter jurisdiction under the Magnuson-Moss Act, we find
that this case was improperly removed from state court and
must be dismissed for lack of subject-matter jurisdiction.


                      III. Conclusion
  Because the amount in controversy cannot exceed $50,000
to any legal probability, there is no federal subject-matter
jurisdiction for Schimmer’s claims under the Magnuson-
Moss Act. Without federal subject-matter jurisdiction, there
can be no supplemental jurisdiction to consider the district
court’s interpretation of the Illinois Lemon Law. We VACATE
the district court’s decision and REMAND with instructions
to dismiss for lack of subject-matter jurisdiction.




2
  (...continued)
further diminishment in value would not be due to any defect of
the XK8, we can infer that the diminished value on the date of
removal was the same.
No. 03-3611                                          9

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit




               USCA-02-C-0072—9-14-04
