Tawanna Ware v. Best Buy Stores, 6 F.4th 726

Background

In 2013 the Wares bought a Samsung 64" plasma TV and a Best Buy "Geek Squad Protection Plan" (five‑year extended plan); the TV failed after four years and Best Buy provided a gift card rather than repair or replace.
Plaintiffs sued Best Buy under the Magnuson‑Moss Warranty Act (MMWA) alleging the Plan was a “written warranty” and Best Buy’s gift‑card remedy deprived consumers of the MMWA’s required choice of remedy; they also sued Samsung under Illinois consumer‑fraud law (those state claims were dismissed and are not appealed).
Best Buy relied on a 1977 FTC regulation interpreting “part of the basis of the bargain” to exclude separately purchased extended warranties from the MMWA’s definition of “written warranty.”
The district court dismissed Best Buy under Rule 12(b)(6), deferring to the FTC regulation and ruling the Plan was not a “written warranty.”
On appeal the court questioned subject‑matter jurisdiction and the parties briefed §1331 (federal question/MMWA), §1367 (supplemental jurisdiction via diversity of the Samsung claims), and CAFA (§1332(d)).
The Seventh Circuit concluded there was no federal jurisdiction: the MMWA’s special jurisdictional limits (including the 100 named‑plaintiff class requirement and $50,000 threshold) prevented §1331 jurisdiction; plaintiffs also failed to plausibly plead the amount‑in‑controversy needed for supplemental jurisdiction or CAFA. The district court judgment was vacated and the case remanded with instructions to dismiss for lack of jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Geek Squad Protection Plan is a “written warranty” under the MMWA	Plan is an undertaking to repair/replace/refund and formed part of the basis of the bargain because plaintiffs relied on it in buying the TV	FTC regulation bars treating separately purchased extended plans as part of the basis of the bargain; thus Plan is not a "written warranty"	Not reached on merits — court found it lacked subject‑matter jurisdiction and vacated the district court judgment (merits unresolved on appeal)
Whether the FTC regulation interpreting “part of the basis of the bargain” is entitled to deference	Regulation conflicts with congressional intent and UCC‑style broad meaning of "part of the basis of the bargain"	Regulation is longstanding, administrable, and entitled to Skidmore weight	Not reached on merits due to lack of jurisdiction
Whether federal question jurisdiction (§1331) exists for the MMWA claim	Plaintiffs initially relied on §1331 because the MMWA is federal law	MMWA contains jurisdictional limits (e.g., $50,000 aggregate threshold and 100 named‑plaintiff requirement for class actions) that plaintiffs do not satisfy	No §1331 jurisdiction: plaintiffs lacked 100 named plaintiffs and cannot aggregate absent that requirement; appeal dismissed for lack of jurisdiction
Whether supplemental jurisdiction (§1367) or CAFA (§1332(d)) supplies federal jurisdiction	Plaintiffs invoked supplemental jurisdiction via their state‑law claim against Samsung and later invoked CAFA	Amount‑in‑controversy allegations are speculative and fail the plausibility/aggregation rules for §1367 and CAFA	No supplemental or CAFA jurisdiction: plaintiffs did not plausibly allege >$75,000 (diversity) or >$5 million (CAFA), so jurisdiction fails

Key Cases Cited

Skidmore v. Swift & Co., 323 U.S. 134 (agency interpretations receive weight based on persuasiveness)
Gardynski‑Leschuck v. Ford Motor Co., 142 F.3d 955 (7th Cir.) (MMWA contains special jurisdictional provisions)
Miller v. Herman, 600 F.3d 726 (7th Cir.) (applying Skidmore to FTC interpretation of MMWA)
Liberty Lincoln‑Mercury, Inc. v. Ford Motor Co., 171 F.3d 818 (3d Cir.) (broad, buyer‑friendly interpretation of “part of the basis of the bargain”)
Downie v. Abex Corp., 741 F.2d 1235 (10th Cir.) (reliance can make representations part of the basis of the bargain)
Schimmer v. Jaguar Cars, Inc., 384 F.3d 402 (7th Cir.) (amount‑in‑controversy must reflect actual warranty relief)
Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (plaintiff’s good‑faith pleading of amount controls unless legally impossible)
St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (amount alleged by plaintiff governs jurisdiction absent contrary law)
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (federal courts are courts of limited jurisdiction; burden on party asserting jurisdiction)
Spivey v. Vertrue, Inc., 528 F.3d 982 (7th Cir.) (plausibility requirement applies to facial jurisdictional challenges)