The Ecommerce Innovation Alliance is closely monitoring recent legal developments that shape the future of our dynamic industry. A significant ruling has emerged from the Ninth Circuit Court of Appeals in the case of Brandon Briskin v. Shopify, Inc., offering important insights into the application of personal jurisdiction in the context of online commerce.

This landmark decision reverses the district court’s dismissal of a case brought against Shopify, a leading ecommerce platform, for alleged privacy-related torts. The central issue revolved around whether California courts have personal jurisdiction over Shopify, a Canadian corporation with U.S. subsidiaries, based on the actions of a California resident, Brandon Briskin, who purchased goods online through a merchant utilizing the Shopify platform.  According to that complaint, the merchant’s privacy policy failed to notify the consumer that Shopify cookies would be installed on his device when he visited the store or that Shopify would collect and store data about the consumer’s browsing and purchase history beyond that merchant’s site.

A Closer Look at the Court’s Findings:

The appellate court concluded that specific personal jurisdiction over Shopify in California is indeed proper, accepting the allegations in the complaint as truthful for purposes of its analysis. This determination rested on several key allegations (which have yet to be proven):

• Deliberate Targeting: The court found that Shopify’s alleged tortious actions, specifically the collection and potential sale of consumer data through cookies, deliberately targeted Mr. Briskin in California.
• Geolocation Technology: Shopify reportedly conceded that its technology allowed it to identify that Mr. Briskin’s device was located in California when cookies were installed.
• Data Practices: The complaint alleges that Shopify used the data gathered to compile consumer profiles and then sold them without consent, impacting California consumers.
• Overruling “Differential Targeting”: In a significant move, the en banc court overruled prior precedent that required defendants to show “differential targeting” of a specific forum to establish personal jurisdiction there. This suggests a broader interpretation of what constitutes targeting in the digital space.

This ruling is procedural in nature, it makes no findings regarding the truthfulness of the allegations or Shopify’s liability.  However, it underscores the importance of understanding how online activities and data handling practices can establish jurisdiction over businesses in courts where they are not located. The court emphasized that traditional personal jurisdiction principles are applicable to the evolving world of e-commerce.

Implications for Ecommerce Innovation:

For the Ecommerce Innovation Alliance and its members, this decision highlights several crucial considerations:

• Data Privacy and Compliance: The ruling reinforces the need for ecommerce platforms and online merchants to be acutely aware of data privacy regulations and consumer rights in the jurisdictions where their users reside. Practices related to data collection, the use of cookies, and the sharing of personal information are under increased scrutiny.
• Understanding Jurisdictional Reach: The overturning of the “differential targeting” requirement suggests that engaging in business activities that knowingly impact consumers in a particular state can lead to jurisdiction in that state, even without specifically prioritizing that forum over others.
• Transparency and Disclosure: The case touches upon allegations that consumers were unaware their data was being submitted to and used by Shopify. This underscores the importance of clear and comprehensive privacy policies and disclosures regarding data handling practices.
• National Audience Considerations: The court referenced prior cases involving websites with national viewership, suggesting that platforms cultivating a nationwide audience for commercial gain can be seen as “expressly aiming” at individual states within that audience.

Moving Forward:

The ruling in Briskin v. Shopify serves as a reminder of the evolving legal landscape surrounding digital commerce and the critical need for businesses to stay informed and adapt their practices accordingly. We encourage our members to review their data handling policies and jurisdictional considerations in light of this decision. The EIA will continue to provide resources and facilitate discussions to help the ecommerce industry navigate these important developments and ensure a future where innovation and consumer protection go hand in hand.