Shah v. Fandom, Inc.

Background

Vishal Shah and Jayden Kim sued Fandom, Inc. individually and on behalf of a proposed California class. Their First Amended Complaint alleges that Fandom violated section 638.51(a) of the California Invasion of Privacy Act by collecting internet-protocol addresses through trackers from people who accessed the website in California.

The complaint invokes the Class Action Fairness Act, which can provide federal jurisdiction over certain class actions. The complaint alleges that the proposed class has more than 100 members. The court focused on whether the complaint alleged “minimal diversity”—meaning that at least one class member is a citizen of a different state from the defendant.

Jurisdictional concerns

The complaint alleges that Fandom is incorporated in Delaware and has its principal place of business in California. The named plaintiffs are alleged to be California residents, and the proposed class consists of California residents who accessed the website in California and had their internet-protocol addresses collected. Because a corporation is a citizen of both its state of incorporation and the state of its principal place of business, the court concluded that the complaint did not appear to allege that any class member was a citizen of a state different from Fandom.

The court also stated that the case did not appear to qualify for federal-question jurisdiction because the complaint alleges no federal claim. It likewise did not appear to qualify for traditional diversity jurisdiction because the named plaintiffs and Fandom were alleged to be citizens of the same state.

Order

The court ordered the plaintiffs to show cause—meaning to explain—why the case should not be dismissed for lack of subject-matter jurisdiction. The plaintiffs may submit a written response of no more than five pages by September 26, 2024, or file a Second Amended Complaint that adequately alleges jurisdiction. The court stated that the amended complaint may not add new causes of action or parties without permission or the parties’ agreement under Federal Rule of Civil Procedure 15.

The court stated that if Shah does not submit briefing establishing jurisdiction or file an amended complaint curing the jurisdictional defect by that date, it may dismiss the case without further notice. The court vacated the September 10, 2024 hearing on Fandom’s motion to dismiss and said the hearing would be reset if subject-matter jurisdiction is established. This order did not itself dismiss the case.