9th Circuit Revives Privacy Lawsuit Against Shopify Over Data Tracking

A federal appeals court has breathed new life into a proposed class-action lawsuit targeting Shopify over alleged privacy violations, in a move that could widen the legal exposure of digital companies operating across state lines.

According to Reuters, the 9th U.S. Circuit Court of Appeals ruled on Monday that the Canadian e-commerce giant can be sued in California for allegedly collecting personal data from consumers who make purchases through California-based online retailers. The decision, reached in a 10-1 vote by the full appellate court in San Francisco, reverses earlier rulings by both a district court and a three-judge panel of the same circuit.

At the center of the case is Brandon Briskin, a California resident who claims Shopify secretly placed tracking cookies on his iPhone without his consent when he shopped on the website of I Am Becoming, a fitness apparel retailer. Briskin alleges the data gathered was used to build a profile for Shopify to monetize by selling to third-party merchants.

Shopify, headquartered in Ottawa, argued it should not face litigation in California, maintaining that its operations are nationwide in scope and not directed specifically at the state. The company suggested the lawsuit would be more appropriately handled in Delaware, New York, or even Canada. However, the appellate court disagreed, asserting that Shopify’s conduct had clear connections to California.

Per Reuters, Circuit Judge Kim McLane Wardlaw, writing for the majority, said Shopify’s alleged actions were far from incidental. “Shopify deliberately reached out … by knowingly installing tracking software onto unsuspecting Californians’ phones so that it could later sell the data it obtained, in a manner that was neither random, isolated, or fortuitous,” she wrote.

The case has broader implications for how internet-based services can be held accountable in the jurisdictions where their digital tools are used. Thirty states and Washington, D.C., filed a joint brief in support of Briskin, emphasizing the need for states to enforce consumer protection laws against tech companies engaging in local commerce via the internet.

Meanwhile, the U.S. Chamber of Commerce sided with Shopify, warning that the ruling could open the floodgates for lawsuits against software providers whose products are utilized globally, according to Reuters.

In a dissenting opinion, Circuit Judge Consuelo Callahan criticized the majority for establishing what she termed a “traveling cookie rule,” arguing it effectively enables jurisdiction anywhere a plaintiff happens to use a device, potentially stretching constitutional limits.

Neither Briskin’s legal team nor Shopify immediately offered public comments following the court’s decision.

Source: Reuters