• by Wendy Davis  @wendyndavis, July 3, 2024

Attorneys general in 30 states and the District of Columbia are urging a federal appeals court to rule that the ecommerce platform Shopify -- which is headquartered in Canada and has two U.S. divisions based in Delaware -- can be sued in California over alleged privacy violations.

In a friend-of-the-court brief filed Tuesday with the 9th Circuit Court of Appeals, the law enforcement officials argue that internet companies that aim conduct at residents of a particular state can be sued in that state.

Otherwise, the coalition argues, attorneys general who want to bring enforcement actions against online companies would have to either sue out of state, or attempt to raise federal claims that could be litigated in federal court located in the attorneys general's home state.

“Such an extreme result could potentially operate to immunize these companies from ever facing enforcement actions from state attorneys general seeking to protect their states’ citizens,” Mississippi Attorney General Lynn Fitch and Nebraska Attorney General Aaron Ford write in a brief joined by 29 other attorneys general.

They are weighing in on a dispute dating to August 2021, when California resident Brandon Briskin alleged in a class-action complaint that Shopify surreptitiously collected his personal data when he made a purchase from the online retailer IABMFG (iambecoming.com).

Briskin alleged that the checkout page linked to Shopify code that enabled it 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 was then provided to other merchants.

The complaint included claims that Shopify violated a California wiretap law that prohibits the interception of electronic communications without both parties' consent.

U.S. District Court Judge Phyllis Hamilton in the Northern District of California dismissed the case in May 2022, ruling that the allegations, even if proven true, wouldn't show that Shopify was subject to the jurisdiction of California courts. Instead, she said, the allegations could establish only that Shopify was a vendor for the retailer IABMFG.

A three-judge panel of the 9th Circuit initially upheld that ruling, writing in an opinion issued in November that Shopify didn't specifically direct its activity toward California residents.

In May, the 9th Circuit withdrew that opinion and said it would reconsider whether Shopify would have to face suit in a California court.

The appellate court is expected to hear arguments in the case the week of September 23, in San Francisco.