Siding with Shopify, a federal appellate court has refused to revive an online shopper's claims that the e-commerce platform violated California privacy laws by collecting residents' personal information.
In a ruling issued Tuesday, a three-judge panel of the 9th Circuit Court of Appeals said courts in California lacked jurisdiction over the privacy claims against Shopify Inc., which is headquartered in Canada, or the company's two U.S. divisions, which are based in Delaware. The ruling upheld a decision issued by U.S. District Court Judge Phyllis Hamilton in the Northern District of California who dismissed the claims in May 2022.
The ruling stems from a lawsuit brought by California resident Brandon Briskin. He alleged in a class-action complaint filed in August 2021 that Shopify surreptitiously collected his personal data when he made a purchase from the online retailer IABMFG (iambecoming.com).
He alleged that the retailer's checkout page linked to Shopify code that enabled the platform to “intercept” his data. He also said Shopify analyzed and processed his data, and transmitted the information to the payment processor Stripe, which also analyzed and processed the information. Additionally, he alleged that Shopify used his data to create a profile of him that the company provided to other merchants.
His claimed in the complaint that Shopify violated various California privacy laws, including the state's wiretap law, which prohibits the interception of electronic communications without both parties' consent.
Hamilton ruled last year that the allegations, even if proven true, wouldn't show that Shopify was subject to the jurisdiction of California courts.
“Plaintiff’s allegations establish only that Shopify is IABMFG’s vendor for an online sales platform,” Hamilton wrote in her dismissal order. “A vendor’s sale of a product to IABMFG ... does not establish specific personal jurisdiction over the vendor.”
She added that Shopify's role in online sales is too passive to establish jurisdiction.
“Shopify serves as an agent of IABMGF, providing hosting services for the latter’s website, which falls far short of invoking the benefits and protections of California’s laws,” she wrote.
The 9th Circuit agreed that the court lacked jurisdiction over the platform, writing that Shopify didn't aim its activity toward California.
“Shopify’s platform is accessible across the United States, and the platform is indifferent to the location of either the merchant or the end consumer,” the judges wrote. “No one has alleged that Shopify alters its data collection activities based on the location of a given online purchaser. It did not prioritize consumers in California or specifically cultivate them.”