A notable decision from the Ninth Circuit Court of Appeals has significant ramifications for companies defending against Telephone Consumer Protection Act (“TCPA”) claims. Below, we discuss the Court’s decision and its implications for future TCPA claims.
Defending Against TCPA Claims Gets More Complicated
Briskin v. Shopify, Inc. involved a putative class action in which Plaintiff alleged that Shopify installed tracking cookies on his phone after he purchased clothing from a California merchant’s website. Plaintiff alleged that these tracking cookies allowed Shopify, an e-commerce platform, to gather personal data, including his location, and to process his payment information without his knowledge or consent. Shopify purportedly compiled consumer profiles from the data it collected and sold them to third parties, in violation of California privacy and consumer protection laws. The district court dismissed the Complaint on two grounds, one of which was for lack of specific personal jurisdiction over Shopify. Plaintiff appealed and the three-judge panel at the Ninth Circuit affirmed the district court’s ruling. A majority of active judges voted for the case to be reheard en banc, vacating the three-judge panel’s opinion affirming the district court’s dismissal. After rehearing, the Ninth Circuit reversed the district court’s dismissal, finding that Plaintiff plausibly alleged that Shopify purposefully directed its conduct toward California residents. In so ruling, the Ninth Circuit found that Shopify was subject to specific personal jurisdiction.
Specifically, the Court found that Shopify deliberately targeted Plaintiff in California because: (1) Shopify conceded that its geolocation technology allowed it to know that Plaintiff’s device was located in California; and (2) it was alleged that Shopify used the data gathered by its cookies to compile consumer profiles and then sold them without the consumer’s knowledge or consent. The Court rejected Shopify’s argument that it lacked specific personal jurisdiction because its business was not expressly aimed at California residents. By rejecting this argument, the Court overruled Ninth Circuit precedent requiring that specific personal jurisdiction be demonstrated through a “forum-specific focus” or “differential targeting.” The Court held that “an interactive platform ‘expressly aims’ its wrongful conduct toward a forum state when its contacts are its own choice and not random, isolated, or fortuitous, even if that platform cultivates a nationwide audience for commercial gain.”
What Does This Decision Mean for Future TCPA Claims?
This decision is notable because lack of personal jurisdiction is a common defense often raised in response to TCPA claims. This Ninth Circuit decision overrules prior precedent by redefining that companies expressly aim their conduct at residents in a subject forum where their contacts are not random, but rather, of their own choosing. In so doing, the Ninth Circuit has opened the door for businesses, even those that operate nationwide, to be hauled into court in jurisdictions in which they largely do not operate. Businesses should not be discouraged, however, as numerous other defenses to TCPA claims exist. The attorneys at Klein Moynihan Turco (“KMT”) have successfully defended countless companies against a variety of TCPA claims. In addition, KMT’s attorneys have extensive experience with advising companies on how to comply with the TCPA, along with various federal and state marketing laws, rules, and regulations.
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