Jia v. Weee! Inc.

Background

Helen Jia, Tingting Ding, Haoquan Liang, and Xiaofang Mei brought a proposed class action against Weee! Inc. on behalf of themselves and customers whose personally identifiable information was compromised in Weee’s February 2023 data breach. The complaint asserted 13 claims under the California Constitution, California statutes, and other California law.

Weee disclosed that information for customers who placed orders during a specified period may have been leaked, including names, addresses, email addresses, phone numbers, order numbers, and order notes. The plaintiffs alleged that Jia and Mei experienced increased spam calls and text messages. Ding alleged that $57,000 was wrongfully taken from his bank account. The plaintiffs also alleged that Weee stored payment information and that it was exposed in the breach.

Weee moved to dismiss the amended complaint for lack of standing and failure to state a claim. The court first considered whether it had subject-matter jurisdiction, even though the parties had not briefed that issue.

Federal-question jurisdiction

The court held that the complaint did not establish federal-question jurisdiction. All 13 claims were based on California law and did not invoke federal law as the source of the claims.

One California negligence claim alleged that Weee’s conduct violated Section 5 of the Federal Trade Commission Act. The court concluded that this reference did not create federal jurisdiction. It reasoned that the alleged federal issue was not important to the federal system as a whole, and that allowing the state-law claims to proceed in federal court would improperly shift responsibility from state courts. The court also noted that the Federal Trade Commission Act does not provide a private right of action for individuals to sue for violations of the Act.

Diversity jurisdiction

The court also held that the complaint did not establish diversity jurisdiction. Jia, Ding, and Mei were alleged to be California citizens, and Weee’s principal place of business was alleged to be in California. Because complete diversity requires every plaintiff to be a citizen of a different state from every defendant, the citizenship of Liang—whose citizenship the complaint did not allege—could not cure the problem.

The court separately found that the complaint did not allege more than $75,000 in damages, another requirement for ordinary diversity jurisdiction. The court also stated that the complaint did not plead facts supporting jurisdiction under the Class Action Fairness Act.

Disposition

The court concluded that it lacked subject-matter jurisdiction under both federal-question and diversity jurisdiction. It therefore dismissed the case on its own under Federal Rule of Civil Procedure 12(b)(1). The dismissal was without prejudice to the plaintiffs’ right to refile the action or bring a new one consistent with jurisdictional requirements. The court denied Weee’s motions to dismiss on other grounds as moot, directed the clerk to terminate the pending motions, and closed the case.