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Ninth Circuit En Banc Review of Personal Jurisdiction Over Internet-Based Businesses: the “Expressly Aimed” Requirement
George C. Harris and Emily Kirk, The Norton Law Firm PC
The Ninth Circuit’s requirement that internet-based business be “expressly aimed” at a state to confer specific personal jurisdiction could be called into question or clarified when the court rehears Briskin v. Shopify, Inc., 87 F.4th 404 (9th Cir. 2023) en banc, in September. While the panel opinion characterized its holding as a matter of first impression, the order for en banc review identified prior precedent as possible targets for reconsideration. The en banc court’s decision in this case may have particular significance for personal jurisdiction by U.S. courts over claims by U.S. plaintiffs against web-based platforms that operate in the U.S but that are headquartered elsewhere.
I. Briskin v. Shopify, 87 F.4th 404 (9th Cir. 2023) (panel opinion)
In August 2021, Brandon Briskin, a California resident, filed a putative class action against Shopify and two of its subsidiaries in the United States District Court for the Northern District of California. Shopify is a company that provides a web-based e-commerce platform used by online merchants throughout the U.S. and the world. As part of its business, Shopify collects, analyzes, and shares the information of consumers who complete transactions on Shopify’s merchant-customers’ websites. Shopify also shares this information with its payment processor, Stripe, Inc., installs tracking cookies on the consumer’s browser, and connects the consumer’s browser to its network. Consumers do not interact with Shopify directly, and no branding or disclosure on Shopify’s platform indicates to the consumer that Shopify is involved in the transaction. Briskin’s complaint alleges that Shopify collected his personal information without his knowledge or consent while he purchased fitness apparel from Shopify’s customer, a California-based online merchant. Briskin claimed Shopify violated multiple California privacy and unfair competition laws by deliberately concealing its involvement in consumers’ transactions with online merchants who use Shopify’s services.
Shopify, a Canadian company with Delaware and New York subsidiaries, moved to dismiss Briskin’s complaint for lack of personal jurisdiction. Briskin opposed, arguing that Shopify’s contacts with California are sufficient to confer specific personal jurisdiction over the company as to his claims: Shopify reaches into California to collect consumers’ data (including Briskin’s), it directly contracts with California merchants and vendors, and Shopify and its subsidiaries generally do a lot of business in California. The district court disagreed, finding Shopify was not subject to the court’s personal jurisdiction and dismissing Briskin’s second amended complaint without leave to amend.
On November 28, 2023, a Ninth Circuit panel affirmed the district court’s holding. The panel applied the “effects test” from Calder v. Jones, 465 U.S. 783 (1984), which asks whether the effects of a defendant’s actions were felt in the forum state. Under the Calder test, to find specific personal jurisdiction, “the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Briskin v. Shopify, Inc., 87 F.4th 404, 412 (9th Cir. 2023) (vacated panel decision).
The Ninth Circuit panel found Shopify clearly committed an intentional act under the first prong of the Calder test, and that it caused privacy-related harm it knew was likely to be suffered in California under the third prong. Id. The court’s holding hinged on the second Calder prong: whether Shopify had “expressly aimed” its conduct at California. Finding that no circuit court had previously analyzed this personal jurisdiction question as it applies to an online payment platform, it focused on personal jurisdiction precedent involving interactive websites, including AMA Multimedia, LLC v. Wanat, 970 F.3d 1201 (9th Cir. 2020), as the closest analogy. Based on its analysis of those cases, it held that knowingly profiting from consumers in the forum state is not sufficient to show the defendant is expressly aiming its conduct there. “Something more” is needed that shows a prioritization of or focused dedication to the forum state that differentiates it from other locations. Id. at 417-20.
Applying those principles, the Ninth Circuit panel found that the act that caused Briskin’s harm—Shopify’s extraction and retention of Briskin’s data—was not expressly aimed at California. Shopify’s platform does not have a California-specific focus, and Shopify was not specifically appealing to a California audience nor actively targeting California as opposed to other states with its business. Rather, the Shopify platform is “accessible across the United States and . . . is indifferent to the location of either the merchant or the consumer.” Id. at 422-23. For these reasons, the Ninth Circuit panel agreed with the lower court that Shopify was not subject to specific personal jurisdiction in California. Id. at 423.
II. Rehearing en banc and supplemental briefing
On May 14, 2024, the Ninth Circuit granted Briskin’s motion for en banc review, and vacated the November 28, 2023, panel decision. Oral argument for the rehearing is scheduled for the week of September 23, 2024, in San Francisco. In requesting further briefing on three issues, the court signaled that it may reconsider circuit precedent concerning personal jurisdiction over web-based platforms, including the requirement for “express aiming”:
- What rule or standard should govern our evaluation of whether there is specific personal jurisdiction over a defendant for a claim arising out of conduct on the internet;
- Whether and how the original meaning of the Fourteenth Amendment’s Due Process Clause should inform our consideration of the issues in this case.
- Whether we should revisit our prior holdings that a defendant’s aiming of its internet-related conduct at a jurisdiction must exceed its aiming at other jurisdictions to constitute “express aiming” at that jurisdiction. See Doe v. WebGroup Czech Republic, a.s., 93 F.4th 442, 452-56 (9th Cir. 2024); AMA Multimedia, LLC v. Wanat, 970 F.3d 1201, 1209-12 (9th Cir. 2020).
The parties recently completed their supplemental briefing. In response to the issues raised by the en banc court, the parties seemed to agree that (1) existing personal jurisdiction standards are sufficient to determine whether there is jurisdiction over claims arising from internet-related conduct, and (2) “express aiming” should not require that conduct aimed at one jurisdiction exceed that aimed at other jurisdictions. They disagreed, however, as to how those principles apply to the facts of the case and the implications of the original meaning of the Due Process Clause.
In his supplemental brief, Plaintiff-Appellant Briskin argued that:
- There is no need for a new specific personal jurisdiction standard for the virtual world. The Ninth Circuit’s general rule, that a state may take specific personal jurisdiction over a defendant on claims arising out of or related to activities that the defendant deliberately and systematically extends into the forum state as long as the exercise of jurisdiction is otherwise reasonable, is sufficient to advance states’ sovereign interests while still safeguarding the rights of defendants.
- There is no basis to hold that “express aiming” requires internet conduct directed at a jurisdiction that exceeds that directed at other jurisdictions. The court should make clear that there is no forum-prioritization requirement and disapprove any holdings to the contrary. “The proposition that nationally accessible online platforms are purposely directed nowhere because they are purposely directed everywhere . . . risks shielding online tortfeasors from accountability in jurisdictions where their international operations cause foreseeable harm.”
- Shopify’s extensive operations in California are sufficient to have subjected it to general personal jurisdiction in California at the time the Fourteenth Amendment was ratified, so subjecting it to specific personal jurisdiction in California on Briskin’s claims is fair.
The Shopify Defendants-Appellees responded that:
- Whether there is specific jurisdiction over a defendant for claims arising out of conduct on the internet should be guided by the Supreme Court’s minimum contacts precedent. To confer specific personal jurisdiction under that precedent, the defendant’s contacts must be the defendant’s own choice and not “random, isolated, or fortuitous,” and must establish that the defendant deliberately “reached out beyond” its home forum.
- The Ninth Circuit’s framework in Doe and AMA,that “something more” than the general availability of an online service is required to show that the defendant purposefully directed activity to the forum state, complies with due process and ensures the jurisdiction analysis is focused on the defendant’s contacts. The “something more” analysis does not require that contacts directed at the forum state exceed those directed at other fora. Even if the court eliminated the “something more” requirement, there would be no personal jurisdiction over the Shopify defendants, because Shopify offers services to merchants, not consumers who transact with those merchants. Shopify’s connection with California here results only from decisions made by Shopify’s customers and Briskin, not Shopify, so there is no “express aiming.”
- Allowing a state to exercise jurisdiction over every back-end internet service provider whose customers transact online with consumers there would go beyond the longstanding jurisdictional principles of sovereignty and territoriality constitutionalized in the Due Process Clause. At the time of the ratification of the Fourteenth Amendment, a state’s authority to enter binding judgments was limited to people and things physically present within its boundaries.
The court’s order requesting additional briefing prior to the en banc hearing generated interest from amici supporting both sides. In support of Plaintiff-Appellant Briskin, briefs were filed by the State of Nevada joined by thirty other states and Washington D.C.; the San Francisco, San Diego, and Oakland City Attorneys’ Offices; the Electronic Frontier Foundation and UC Berkeley Center for Consumer Law & Economic Justice; Professor Alan B. Morrison; Professor Paul Schiff Berman; and Professors Patrick J. Borchers and Peter Hay. In support of the Shopify Defendants-Appellees, briefs were filed by Computer & Communications Industry Association; BSA | The Software Alliance, ACT | The App Association, Interactive Advertising Bureau, and Financial Technology Association; Chamber of Commerce of the United States of America; Bright Data Ltd.; Professors Alan Trammell and Derek Bambauer; Handker Bandanas, Gather Here, Panda Motorworks, Sarah Healey Sleep, The Matt Butler, LLC d/b/a Pretty Alright Goods, and Vedazzling Accessories; and NetChoice and Chamber of Progress.
III. Practical Significance of a New Decision on “Express Aiming”
The Ninth Circuit’s en banc decision in Briskin could have significant implications for personal jurisdiction in U.S. courts over web-based platforms that operate in the U.S. but are headquartered elsewhere. Affirming the panel decision on the grounds that a defendant’s “express aiming” of its internet-related conduct at a jurisdiction must exceed its aiming at other jurisdictions would mean that plaintiffs asserting harm in the U.S. as a result of web-based platforms operated by foreign entities in all U.S. states or internationally, without particular focus on any U.S. jurisdiction, may have no recourse in U.S. courts. Over-ruling that decision could open web-based platforms—both foreign and domestic—to the risks of litigation in multiple U.S. jurisdictions.
Instead, the en banc court could opt to render a narrow, fact-specific opinion that avoids creating new precedent on “express aiming.” It might affirm the district court decision on the ground that consumers’ direct contacts are with Shopify’s merchant customers and not with Shopify, leaving clarification of the “express aiming” rule for another day.