States, cities, others weigh in: Can online platforms be sued everywhere?

Amicus curiae briefs have poured in for both sides of a key question that will be considered next month by a 9th U.S. Circuit Court of Appeals en banc panel: Where can online businesses be sued for alleged violations of privacy and unfair competition laws?

In November 2023, a three-judge panel affirmed the dismissal of a California man's class action against a Canadian e-commerce platform, Shopify Inc., for allegedly extracting his personal data when he was purchasing clothing at a retailer that used the company's services.

"When a company operates a nationally available e-commerce payment platform and is indifferent to the location of end users, the extraction and retention of consumer data, without more, does not subject the defendant to specific jurisdiction in the forum where the online purchase was made," wrote 9th Circuit Judge Daniel A. Bress, an appointee of President Donald Trump.

But in May, the full 9th Circuit - minus Judge John B. Owens, an appointee of President Barack Obama, and Judge Kenneth K. Lee, a Trump appointee, who did not vote on whether to take the case en banc - vacated the three-judge panel ruling and scheduled an en banc hearing for Sept. 26. Briskin v. Shopify Inc. et al., 22-15815 (9th Circ., filed June 2, 2022).

Bress' decision had affirmed a lower court ruling dismissing plaintiff Brandon Briskin's class action. Hueston Hennigan LLP partner Moez M. Kaba, who represents Shopify, prevailed in the panel ruling and referred comment on the matter to Shopify.

"As we have consistently argued, no court has adopted the theory Briskin advances," a Shopify representative wrote in an email Wednesday. "To do so would be to impose unreasonable and untenable burdens on internet-based business, large and small, which runs counter to both due process and precedent. Just because a site is accessible anywhere does not mean it should be subject to jurisdiction everywhere."

But consumer advocacy groups, privacy rights organizations, a bipartisan coalition of state attorneys general including California Attorney General Rob Bonta, and several city attorneys in the state argued in amicus curiae briefs that Bress' rule is too limiting.

Nevada Chief Deputy Solicitor General Jeffrey M. Conner, writing for the attorneys general, wrote that "requiring a state to rely on federal law to bring a claim against a foreign internet-based defendant would undermine the plenary power of the state to define its own law, independent of the federal government."

San Francisco Deputy City Attorney Karun A. Tilak agreed on behalf of the three California cities. "When a business uses the Internet to harm a state's residents, the state has a strong interest in exercising jurisdiction over that business to redress consumer harms and enforce the state's consumer protection laws," she wrote.

Business groups, however, say Bress got it right. Stephanie A. Joyce, chief of staff and senior vice president of the Computer and Communications Industry Association, said in a phone interview Wednesday that court precedent, including that of the 9th Circuit, requires direct contact with the state.

Noting that Shopify's U.S. operations are incorporated in Delaware, Joyce said Briskin must sue there - not in the Northern District of California. "It's unconstitutional to do what he's trying to do," she said, maintaining that doing so would violate the due process clause of the Constitution.

"Instead, for nearly three decades, consistent with Supreme Court precedent, this Court has required the plaintiff to show 'something more' connecting the defendant and the forum than the general availability of an online service," she wrote in an amicus curiae brief, citing a 1997 9th Circuit decision. Cybersell Inc. v. Cybersell Inc., 130 F.3d 414, 418 (9th Circ., filed Nov. 7, 1996).

"This 'something more' requirement is critical because, without it, the defendant would be subject to jurisdiction in any state where the plaintiff was located or from where he chose to access a website," Joyce added.

Nicolas Sansone, an attorney with Public Citizen Litigation Group who represents Briskin, countered in a phone interview Wednesday that "online platforms can be subject to personal jurisdiction wherever they exploit the platform."