Ninth Circuit Limits Jurisdiction Over Web-Based Platforms

In a recent decision, Briskin v. Shopify, Inc., 2023 WL 8225346 (9th Cir. Nov. 28, 2023), the Ninth Circuit held that a Canadian-based company, Shopify, which provides a web-based payment processing platform to merchants nationwide, could not be subjected to personal jurisdiction in California because it did not expressly direct its actions to the state.

There, the plaintiff alleged that Shopify violated California privacy and consumer protection laws by collecting and processing his confidential personal information when he made a purchase on a California-based retailer's website. The district court in the Northern District of California dismissed the action, concluding that it lacked personal jurisdiction over Shopify.

The Ninth Circuit affirmed, holding that Shopify's actions were not purposefully directed at California. The court noted that, while Shopify indisputably had contacts with California—including contracts with California merchants, an office in Los Angeles that promoted merchant relations, and a California fulfillment center, among other things—none of the contacts established that Shopify had a "forum-specific focus" or was specifically "appeal[ing] to . . . an audience in a particular state," or "actively target[ing] the forum state." Instead, the court concluded, "[the plaintiff's] injuries are based on Shopify's extraction and processing of his personal information. His claims have nothing to do with Shopify's brick-and-mortar operations in the state. Nor do they relate to Shopify's contracts with merchants in California. [The plaintiff] would have suffered the same injury regardless of whether he purchased items from a California merchant or was physically present in California when he did so." The court also rejected the plaintiff's intimation that "Shopify's broader business actions in California set the wheels in motion for Shopify to eventually inflict privacy-related harm on him in California," concluding that "such a butterfly effect theory of specific jurisdiction would be far too expansive to satisfy due process."

At bottom, the Ninth Circuit recognized that subjecting web-based platforms to specific jurisdiction in any forum from which they are accessible (particularly if that accessibility is based on the actions of third parties such as merchants) would lead to "the eventual demise of all restrictions on personal jurisdiction." This decision is particularly relevant for foreign defendants that provide back-end services to third parties operating in the United States.

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