Shopify Must Face Privacy Suit, 9th Circuit Rules
E-commerce company Shopify will face a data privacy lawsuit, the 9th U.S. Court of Appeals ruled Monday, overturning the lower court's dismissal on the grounds that plaintiff Brandon Briskin could bring the suit in the state of California.
Sign up for a free preview to unlock the rest of this article
"The en banc court concluded that Shopify is subject to specific personal jurisdiction in California because Shopify’s allegedly tortious actions deliberately targeted Briskin in California," said Judge Kim McLane Wardlaw. "The en banc court also held that the district court erred in dismissing Briskin’s complaint on vagueness grounds."
Judges Daniel Collins and Patrick Bumatay concurred with Wardlaw's decision, while Judge Consuelo Callahan dissented "because Shopify’s allegedly tortious conduct was not 'expressly aimed' at California."
Case 22-15815, on appeal from the U.S. District Court for Northern California, alleged that while making a purchase through Shopify's platforms, the e-commerce company extracted from Briskin sensitive personal information, including financial data, without his knowledge or consent, in violation of California privacy laws. The district court granted Shopify's motion to dismiss in May 2022 for failure to prove jurisdiction, since the company is based out of Canada and Delaware.
The 9th Circuit vacated the panel decision and granted a petition for a rehearing en banc in May 2024, according to Public Citizen, which represented Briskin on appeal. "The court held that jurisdiction was proper because Shopify’s intentional activities constitute express aiming toward California and its consumers to obtain and use their personal data for its own commercial gain," the group said after Monday's ruling.
Stephanie Joyce, Computer and Communications Industry Association (CCIA) senior vice president and chief of staff, said this decision will have ramifications for a majority of e-commerce transactions. CCIA had previously filed an amicus brief in support of Shopify. “This decision opens the entire internet ecosystem to crippling litigation exposure, and could force companies to cease providing their valuable, innovative services to the companies on which users rely for efficient, cost-saving purchases," Joyce said in am emailed press release following the decision. "Online commerce has just been put in grave peril.”