In a decision last week, the
Case Background
Plaintiff in Briskin is a
Shopify is a Canadian corporation with its headquarters in
Plaintiff filed a putative class action in
Overview of General vs. Specific Jurisdiction
Federal courts have limited jurisdiction, and generally may not exercise judicial power over defendants that do not reside in the forum. In any case, the plaintiff bears the burden of establishing personal jurisdiction over a defendant.
Consistent with Supreme Court precedent, a court's power to exercise personal jurisdiction manifests in two basic ways: general or all-purpose jurisdiction, and specific or case-linked jurisdiction. For a corporation, the paradigm forum for the exercise of general jurisdiction is one in which the corporation is fairly regarded as at home—which encompasses the corporation's place of incorporation and its principal place of business. By contrast, specific jurisdiction is narrower. It covers defendants less intimately connected with a State, but only as to a narrower class of claims. There are three requirements for a court to exercise specific jurisdiction over a defendant in a litigation. First, the defendant must have "purposefully availed" itself of "the benefits and protections of the forum's laws."
The Ninth Circuit's Ruling on Personal Jurisdiction
Plaintiff in this case did not argue that there was general jurisdiction over Shopify or its subsidiaries named as Defendants. Instead, the issue before the Ninth Circuit was whether the District Court had correctly dismissed the case for lack of specific jurisdiction on the basis that the Shopify "expressly aimed" its activities at the forum state so as to satisfy the second prong required for the exercise of specific jurisdiction in the litigation.
In addressing this issue, the Court noted that "[f]or specific jurisdiction to exist over Shopify, [Plaintiff's] claim "must be one which arises out of or relates to the defendant's forum-related activities." (citation omitted). As such, "[t]his is a claim-tailored inquiry that requires [the Court] to examine the plaintiff's specific injury and its connection to the forum-related activities in question." On this basis, the Court held that the central jurisdictional inquiry boiled down to the question of causation, finding that [Plaintiff's] claims do not "arise out of" Shopify's broader forum-related activities in the state (its contracts with
As such, the Court determined that "[t]here is no such causal relationship between Shopify's broader
[Plaintiff] would have suffered the same injury regardless of whether he purchased items from a
(emphasis supplied).
Other Principles Set Forth by the Ninth Circuit to Guide Other Cases
The Ninth Circuit framed the core issue presented in this question was a novel one, concerning "whether Shopify, which provides web-based payment processing services to online merchants throughout the nation (and the world), thereby expressly aimed its conduct toward
Because Shopify operates a web-based platform, the Court found (and the parties agreed) that Ninth Circuit personal jurisdiction cases involving interactive websites should govern the jurisdictional inquiry as to Shopify and litigations other involving a broadly accessible back-end web platform. The Court stated the core principles governing the personal jurisdiction inquiry were the following:
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"First, the fact that a broadly accessible web platform knowingly profits from consumers in the forum state is not sufficient to show that the defendant is expressly aiming its intentional conduct there." (emphasis supplied).
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"Second, to establish the 'something more' needed to demonstrate express aiming in suits against internet platforms, the plaintiff must allege that the defendant platform has a forum-specific focus." In the alternative, "the plaintiff must allege that the defendant is specifically 'appeal[ing] to ... an audience in a particular state' or 'actively target[ing]'" the forum state (citations omitted). The Court explained that what is needed in either instance, however, is "differentiation of the forum state from other locations . . . which permits the conclusion that the defendant's suit-related conduct 'create[s] a substantial connection" with the forum.'" (citations omitted).
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"Third, the specific nature and structure of the defendant's business matters." The Court explained that "how the defendant operates and organizes its web-based platform" and how the defendant interacts with relevant third parties all affect the "something more" analysis.
Conclusion
In ruling that Shopify was not subject to specific jurisdiction for Plaintiff's claims, the Court cautioned that it was not suggested "that the extraction and retention of consumer data can never qualify as express aiming" for purposes of establishing specific jurisdiction over a defendant. The Court noted that because "the nature and structure of a defendant's business can affect the personal jurisdiction analysis," personal jurisdiction in all instances depends on a "fact-intensive" assessment. Therefore, the Court's ruling in this case was based on an application to the facts as alleged in Plaintiff's Complaint. However, the principles set forth in the decision will undoubtably guide consumer privacy litigations in the Ninth Circuit going forward, and will be persuasive authority to defendants in other cases. For more, stay tuned.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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