Introduction

The Ninth Circuit has recently decided a question of first impression with respect to personal jurisdiction as to businesses engaged in nationwide e-commerce operations in Briskin v. Shopify, Inc., holding that a court may not exercise specific personal jurisdiction over a company engaged in such operations when the defendant did not expressly aim its conduct towards the forum state.[1] More specifically, Briskin held that personal jurisdiction does not exist when a defendant engages in the allegedly unlawful extraction, retention, and sharing of the data of a consumer residing in the forum state.[2]

Circuit Judge Daniel A. Bress, joined by Circuit Judges Consuelo M. Callahan and Bridget S. Bade, wrote for a unanimous panel, affirming District Judge Phyllis J. Hamilton of the Northern District of California.

Facts

Briskin was filed as a putative class action in the Northern District of California alleging causes of action under various California state law privacy and consumer protection statutes.[3] The plaintiff and class representative was a resident of California, naming three defendants: Shopify, Inc. (“Shopify”), a Canadian company with its principal place of business in Canada, and its two subsidiaries, Shopify (USA) Inc. (“Shopify USA”), a Delaware corporation with its principal place of business in Canada, and Shopify Payments (USA) Inc. (“Shopify Payments”), a Delaware corporation with its principal place of business in Delaware.[4]

The plaintiff alleged he purchased fitness wear from a California-based online retailer, and unbeknownst to him at the time, Shopify provided backend sales processing services.[5] The plaintiff alleged Shopify wrongfully retained his personal and credit card information, and shared this data with its other commercial partners, thus violating state privacy and consumer protection laws.[6]

As for contacts with California, the plaintiff alleged Shopify (the parent company) reached into California to extract consumer data, and directly contracts with California merchants, including the retailer from which the plaintiff himself made a purchase.[7] Additionally, plaintiff alleged California-based merchants are some of Shopify’s largest customers, and had opened a physical location in Los Angeles to better service its over 80,000 merchant-customers in the state.[8] Shopify USA, a subprocessor of data, is registered to do business in California, previously had an office in San Francisco, has a significant number of employees in California, and provides services to thousands of California businesses.[9] Shopify Payments contracts with thousands of California businesses, and it contractual partner Stripe (another payment processor) has its principal place of business in California.[10]

On these facts, the district court granted the defendants’ motion to dismiss for lack of personal jurisdiction in California.[11]

Reasoning

Starting its analysis with a general overview of personal jurisdiction, Briskin explained the difference between general jurisdiction and specific jurisdiction, and noted general jurisdiction was not at issue in the case.[12] Rather, the plaintiff alleged the defendants were subject to specific jurisdiction—personal jurisdiction based on the relationship between the defendants’ forum contacts and the conduct at issue in the case at bar.[13]

Turning to apply the law of specific jurisdiction to the facts before it, the Briskin court “beg[a]n by narrowing Briskin’s allegations to the conduct relevant to the specific jurisdiction inquiry.”[14] So doing, the court explained the “most pertinent” feature of Shopify’s business for specific jurisdiction purposes were its “data extraction, retention, and processing that give rise to Briskin’s claims.”[15] Conversely, the extensive evidence of Shopify’s other contacts with California—such as the number of California merchants with which it does business, and its physical location in Los Angeles—had no relevance, as it was unrelated to the nature of the plaintiff’s claims.[16] As the court itself put it, there is no “…causal relationship between Shopify’s broader California business contacts and Briskin’s claims because these contacts did not cause Briskin’s harm.”[17]

Rather, the relevant harm at issue was “Shopify’s collection, retention, and use of consumer data obtained from persons who made online purchases while in California,” and thus the relevant question was “whether Shopify, which provides web-based payment processing services to online merchants throughout the nation (and the world), thereby expressly aimed its conduct toward California.”[18] The Briskin court believed this question to be one of first impression, never before considered by the Ninth Circuit, or any other circuit.[19]

As a preliminary matter, the court concluded the plaintiff’s physical presence in California when he made the underlying purchase was irrelevant, as the relevant inquiry focuses on conduct of the defendant, and not the plaintiff.[20]

Then, Briskin turned to the established rule that “a purely ‘passive’ website that merely hosts information ‘does not qualify as purposeful activity invoking the benefits and protections’ of the fora in which the website may be viewed.”[21] Rather, “something more” is needed, some manner of conduct expressly directed at the forum state.[22]

Briskin thus concluded that no “something more” was present with the facts before it—Shopify’s backend payment processing services were completely “indifferent to the location of either the merchant or the end consumer.”[23] Continuing, “[n]o one has alleged that Shopify alters its data collection activities based on the location of a given online purchaser [and Shopify] did not prioritize consumers in California or specifically cultivate them.”[24] Rather, the plaintiff “would have suffered the same injury regardless” of where the retailer at issue was located, or where he himself was located.[25]

Thus, Briskin concluded no personal jurisdiction was present, and affirmed the district court.[26]

Implications and Takeaways

As noted, Briskin itself recognized it was considering a nationwide issue of first impression. Thus, the probability of review by the U.S. Supreme Court is low, given the Court’s preference to permit multiple circuits to consider an issue before deciding to weigh in.

In more immediate terms, Briskin stands for a generally stringent standard of personal jurisdiction for internet companies. To assert jurisdiction under its rule, it is necessary for a defendant to specifically target the forum jurisdiction with respect to the actual harm at issue in a case, even in circumstances where seemingly most or all the actual acts underlying a claim appear to occur in the forum state itself. Future consideration of similar cases by other circuits will determine whether the rule of Briskin sees broad adoption.

Keep Reading

Cannabis Workers Allege Quota to Trim 4 Pounds a Day Violates the California Labor Code The Ninth Circuit Reminds Us: Every Word Matters NO WAY, PRO SE! The Consequences of Abusing the Judicial System as a Pro Se Litigant in Colorado Victim of Financial Mismanagement or Unlawful Retaliation? New Jersey City University Program Founder Claims School Retaliated After Reporting Alleged Sexual Harassment “Real Housewives” Gets a Reality Check Missing a Chapter: Insufficiency of Expert Deposition Testimony in Medical Malpractice Litigation Crash Course: Why Summary Judgment Misses the Mark in Illinois Multi-Cause Limousine Crash Collision Bitter Truths: Lead, Cadmium, and Defective Pleadings in California Chocolate Class Action The Law of Unintended Consequences: Including Insurance Brokers in Litigation Strategy Communication May Waive the Attorney-Client Privilege

More by this author

Ninth Circuit Decides Novel Question of Personal Jurisdiction in E-Commerce Cases US Supreme Court Creates Potential for Vast Expansion of General Personal Jurisdiction Supercharged Ninth Circuit Decision in Exploding Battery Case Provides Personal Jurisdiction Guidance Texas Two-Step Trips on Third Circuit Dance Floor Ninth Circuit Greenlights Insurer Intervention on Behalf of Defunct Insureds Keep It Moving: Can Defense Attorneys Use Venue Selection to Their Benefit?

Sources

[1] Briskin v. Shopify, Inc., 87 F.4th 404, 420 (9th Cir. Nov. 28, 2023).

[2] Id.

[3] Id. at 410.

[4] Id. at 409-10.

[5] Id. at 409.

[6] Id. at 410.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id. at 410-11.

[12] Id. at 411-12.

[13] Id.

[14] Id. at 413.

[15] Id.

[16] Id. at 413-14.

[17] Id. at 414.

[18] Id. at 415.

[19] Id.

[20] Id. at 415-16.

[21] Id. at 417, quoting Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 420 (9th Cir. 1997).

[22] Briskin, 87 F.4th at 417.

[23] Id. at 422.

[24] Id.

[25] Id. at 422-23.

[26] Id. at 423.