In an opinion issued today, the Seventh Circuit held that both it and the district court lacked subject-matter jurisdiction in a putative class action that was filed against Best Buy's Geek Squad Protection Plan (GSPP). 

      The case began when a couple purchased an expensive television set from Best Buy that utilized the now-abandoned plasma technology. Best Buy urged them to purchase the GSPP as an extended warranty and offered a discount on the television set if they did. The couple purchased the GSPP. When the television set failed, Best Buy was unable to repair it, offering instead a refund of the depreciated value of the television or a much cheaper replacement, informing the couple that the GSPP is a service plan, not a warranty as their advertising states.

      The district court dismissed the action, holding that under federal regulations, a warranty cannot require extra payment, and the purchase of the GSPP prevented it from being considered a warranty under the Magnuson-Moss Warranty Act. On appeal, CCL argued for the couple that the regulation had no basis in the statute and allowed Best Buy to misrepresent its service contract as a warranty, precisely the evil that the Magnuson-Moss Act was designed to prevent.

      The Seventh Circuit's decision in Ware v. Best Buy did not address the substance of the arguments, but found that subject-matter jurisdiction was lacking, even though neither party nor the lower court raised the issue. Under Magnuson-Moss, jurisdiction lies in federal court only if a purported class action actually names 100 individual plaintiffs. That was lacking in the complaint. Recognizing the possibility of dismissal on jurisdictional grounds, CCL filed a supplemental brief for the plaintiffs, suggesting both other ways that jurisdiction could be asserted, as well as a request that the adverse district court decision be vacated so the Wares could refile in state courts. The Seventh Circuit took the latter approach.