Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 1 of 9
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`BRANDON BRISKIN,
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`Plaintiff,
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`v.
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`SHOPIFY INC., et al.,
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`Case No. 21-cv-06269-PJH
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`ORDER OF DISMISSAL
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`Re: Dkt. Nos. 51, 52, 53
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`Defendants.
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`The three motions of defendants Shopify Inc., Shopify (USA) Inc., and Shopify
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`Payments (USA) Inc. to dismiss plaintiff’s second amended complaint (“SAC”) all came
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`on for hearing before this court on April 28, 2022. Plaintiff appeared through his counsel,
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`Kali Backer. Defendants appeared through their counsel, Aravind Swaminathan and
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`Thomas Fu. Having read the papers filed by the parties and carefully considered their
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`arguments and the relevant legal authority, and good cause appearing, the court hereby
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`rules as follows.
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`BACKGROUND
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`This putative class action for invasion of privacy concerns the collection of
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`consumer data over an online shopping platform. Plaintiff Brandon Briskin is an Internet
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`shopper and resident of Madera, California. SAC ¶ 8. Defendant Shopify Inc. is a
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`Canadian company headquartered in Ottawa, Canada. SAC ¶ 9. Defendant Shopify
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`(USA) Inc. (“Shopify USA”) is a Delaware company with its principal place of business in
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`Ottawa, Canada. SAC ¶ 14. Defendant Shopify Payments (USA) Inc. (“Shopify
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`Payments”) is a Delaware company with its principal place of business in Wilmington,
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`Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 2 of 9
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`Delaware. SAC ¶ 15. Both Shopify USA and Shopify Payments are wholly owned
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`subsidiaries of Shopify Inc. Plaintiff refers to the three defendants repeatedly and
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`collectively throughout the SAC as “Shopify.”
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`A.
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`Allegations of defendants’ conduct with consumer data
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`Defendants run an e-commerce platform that provides payment processing
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`services to millions of merchants across the Internet. SAC ¶ 24. Defendants host
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`merchants’ websites in addition to facilitating and verifying customers’ payment
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`information. SAC ¶ 24. Plaintiff alleges that when a consumer begins the checkout
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`process with one of Shopify’s merchant customers, the software makes it appear that the
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`consumer communicates directly with the merchant, but in reality, the consumer does not
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`send any information to the merchant. SAC ¶¶ 1-2, 4, 25-35, 82. Rather, Shopify’s
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`software generates the payment form and collects all information entered into it. Id.
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`Plaintiff complains that Shopify also installs cookies on users’ browsers to track
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`consumers’ transactions across the Shopify merchant network. SAC ¶¶ 5, 38-41.
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`In June 2019, plaintiff purchased fitness apparel from IABMFG, a Shopify Inc.
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`merchant, through IABMFG’s website. SAC ¶ 57. Plaintiff alleges that he, like other
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`consumers, was uninformed of defendants’ conduct, and without consent, defendants
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`collected sensitive private information, including consumers’ full names, addresses, email
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`addresses, credit card numbers, IP addresses, the items purchased, and geolocation.
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`SAC ¶¶ 2-3, 40, 81. In defendants’ course of collecting the data, they can decipher what
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`data emanates from California because they have consumers’ billing addresses and
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`geolocations. Id. Defendants take additional steps to use consumer data and make it
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`profitable for themselves and their merchants by compiling the data into individualized
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`profiles. SAC ¶¶ 6, 42-45. Defendants share information within the profiles of
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`consumers with their merchants. Id. The information is valuable to the merchants
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`because they provide insights into consumers’ creditworthiness before the transaction is
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`final. Id.
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`Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 3 of 9
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`When a consumer makes a purchase, defendants use the consumer’s data to
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`provide their merchants with an “analysis” of the order that cross-references the details of
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`the new transaction with the consumer’s purchase history to identify potential areas of
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`fraud. SAC ¶ 43. In addition to building profiles and analyzing their data, defendants
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`share consumer data with other non-merchant third-parties, such as Stripe and MaxMind,
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`who, in turn, use the data to feed their own profiles on consumers. SAC ¶¶ 15-16, 46-47.
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`B.
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`Shopify’s Contacts with California
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`Plaintiff alleges that Shopify’s efforts to drive Internet-based sales in California go
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`beyond simply making its software available for use by California companies—Shopify
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`actively courts California merchants who it knows are doing business with California
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`consumers. For instance, in 2017, Shopify built Kylie Cosmetics, one of its largest online
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`merchants, a pop-up store in Los Angeles with the goal of learning more about its base of
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`consumers. SAC ¶ 10. Shopify sent members of its own team as well as hired an
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`agency to secure workers to run the store. Id. In 2018, Shopify deepened its ties with
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`California when it opened a physical store in Los Angeles to serve as a hub where its
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`merchants can learn about its products and receive “business advice” and “learn about
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`the company’s online platform.” SAC ¶¶ 11-12. As of 2018, California was home to over
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`80,000 Shopify merchants with 10,000 in Los Angeles alone. SAC ¶ 11-12.
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`C.
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`Plaintiff’s Claims
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`Plaintiff alleges that he never granted consent for defendants to collect and use his
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`data in the methods described above, and he seeks to represent a class of similarly
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`situated consumers. His proposed class definition is as follows: “All natural persons who,
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`between August 13, 2017 and the present, submitted payment information via Shopify’s
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`software while located in California.” SAC ¶ 68. The SAC brings the following claims on
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`behalf of plaintiff and the proposed class against all three defendants, all under California
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`law:
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`1. Violation of the California Invasion of Privacy Act, California Penal Code § 631;
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`2. Violation of the California Invasion of Privacy Act, California Penal Code § 635;
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`3. Invasion of Privacy Under California’s Constitution;
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`4. Intrusion Upon Seclusion;
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`5. Violation of the California Computer Data Access and Fraud Act, Cal. Penal
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`Code § 502; and
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`6. Violation of the California Unfair Competition Law, Cal. Bus. & Prof. Code
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`§ 17200, et seq.
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`D.
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`Procedural History
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`The original complaint was filed on August 13, 2021, naming only Shopify Inc. and
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`Shopify USA. Dkt. 1. Before defendants responded, plaintiff filed a first amended
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`complaint on October 29, 2021. Dkt. 17. Defendants filed separate motions to dismiss in
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`response on December 8, 2021. Dkt. 29 and 30. Rather than opposing the motions,
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`plaintiff sought leave of court to file a second amended complaint, which defendants
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`opposed. Dkt. 36-40. The court granted plaintiff leave to file, and plaintiff filed, the now-
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`operative second amended complaint, which added Shopify Payments and added some
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`allegations intended to address defects highlighted by defendants’ prior motions. Dkt. 43
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`and 44.
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`In response to the second amended complaint, the three defendants filed the
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`instant motions to dismiss. Dkt. 51, 52, and 53. All three defendants ask the court to
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`dismiss the complaint pursuant to Federal Rule of Civil Procedure 8(a)(2) for failure to
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`provide adequate notice of the claims against them, or in the alternative, pursuant to
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`Federal Rule 12(b)(2) for lack of personal jurisdiction, or in the further alternative,
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`pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon
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`which relief can be granted.
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`DISCUSSION
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`From the several grounds for dismissal offered in defendants’ moving papers, the
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`court focuses on only two grounds for dismissal: (1) whether the SAC comports with the
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`pleading requirements of Rule 8 and (2) whether the court may exercise jurisdiction over
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`the defendants.
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`Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 5 of 9
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`A.
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`Sufficiency of Pleading
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`1.
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`Legal Standard
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`A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the
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`legal sufficiency of the claims alleged in the complaint. Ileto v. Glock Inc., 349 F.3d 1191,
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`1199-1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, which requires that
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`a complaint include a “short and plain statement of the claim showing that the pleader is
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`entitled to relief,” Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule
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`12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficient
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`facts to support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th
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`Cir. 2013). “A complaint which lumps together multiple defendants in one broad
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`allegation fails to satisfy the notice requirement of Rule 8(a)(2).” Adobe Sys. Inc. v. Blue
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`Source Grp., Inc., 125 F. Supp. 3d 945, 964 (N.D. Cal. 2015) (cleaned up).
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`As a general rule, “Plaintiffs’ failure to allege what role each Defendant played in
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`the alleged harm makes it exceedingly difficult, if not impossible, for individual
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`Defendants to respond to Plaintiffs’ allegations.” In re iPhone Application Litig., No. 11-
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`MD-02250-LHK, 2011 WL 4403963, at *8 (N.D. Cal. Sept. 20, 2011) (Koh, J.).
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`Accordingly, a complaint that lumps multiple defendants together in broad allegations
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`falls short of providing the necessary notice under Rule 8(a)(2). Gen-Probe, Inc. v.
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`Amoco Corp., 926 F. Supp. 948, 961 (S.D. Cal.1996). Put another way, a plaintiff’s
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`allegations must “provide sufficient notice to all of the Defendants as to the nature of the
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`claims being asserted against them,” including “what conduct is at issue.” Villalpando v.
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`Exel Direct Inc., No. 12-CV-04137 JCS, 2014 WL 1338297, at *5 (N.D. Cal. Mar. 28,
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`2014).
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`2.
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`Analysis
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`Here, plaintiff admittedly alleges all claims against all three defendants without
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`distinguishing the conduct of any single entity, referring collectively to “Shopify.” SAC
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`¶ 18. Plaintiff contends that the three related entities are sufficiently put on notice of the
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`claims alleged against them. Not so. The complaint does not allege plaintiff’s particular
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`Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 6 of 9
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`claims against any specific defendant, and rather generally alleges all claims against all
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`defendants without identifying which defendant is responsible for his alleged injuries. It
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`thus fails to put any of the three defendants fairly on notice of the claims against them,
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`and the SAC must be dismissed.
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`B.
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`Personal Jurisdiction
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`1.
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`Legal Standard
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`A federal court may dismiss an action under Federal Rule of Civil Procedure
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`12(b)(2) for lack of personal jurisdiction. When resolving a motion to dismiss under Rule
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`12(b)(2) on written materials, the court accepts uncontroverted facts in the complaint as
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`true and resolves conflicts in affidavits in the plaintiffs’ favor. Mavrix Photo, Inc. v. Brand
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`Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). The party seeking to invoke a federal
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`court’s jurisdiction bears the burden of demonstrating jurisdiction. Picot v. Weston, 780
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`F.3d 1206, 1211 (9th Cir. 2015). “Federal courts ordinarily follow state law in determining
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`the bounds of their jurisdiction over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125
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`(2014); see Fed. R. Civ. P. 4(k)(1)(a). California’s long arm statute permits exercise of
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`personal jurisdiction to the fullest extent permissible under the U.S. Constitution, and
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`therefore, the court’s inquiry “centers on whether exercising jurisdiction comports with
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`due process.” Picot, 780 F.3d at 1211; see Cal. Code Civ. Pro. § 410.10.
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`The Due Process Clause of the Fourteenth Amendment “limits the power of a
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`state’s courts to exercise jurisdiction over defendants who do not consent to jurisdiction.”
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`Martinez v. Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2014). Due process requires
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`that the defendant “have certain minimum contacts with it such that the maintenance of
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`the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe
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`Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). Under
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`the “minimum contacts” analysis, a court can exercise either “general or all-purpose
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`jurisdiction,” or “specific or conduct-linked jurisdiction.” Daimler, 571 U.S. at 121-22
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`(citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).
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`A court may exercise specific jurisdiction over a defendant if its less-substantial
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`contacts with the forum give rise to the claim or claims pending before the court—that is,
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`if the cause of action “arises out of” or has a substantial connection with that activity.
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`Hanson v. Denckla, 357 U.S. 235, 250-53 (1958); see also Goodyear, 564 U.S. at 924-
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`25. To determine whether a defendant’s contacts with the forum state are sufficient to
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`establish specific jurisdiction, the Ninth Circuit employs a three-part test:
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`(1) The non-resident defendant must purposefully direct his
`activities or consummate some transaction with the forum or
`resident thereof; or perform some act by which he purposefully
`avails himself of the privilege of conducting activities in the
`forum, thereby invoking the benefits and protections of its laws;
`(2) the claim must be one which arises out of or relates to the
`defendant’s forum-related activities; and
`(3) the exercise of jurisdiction must comport with fair play and
`substantial justice, i.e. it must be reasonable.
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`Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1142 (9th Cir. 2017). With respect to the first
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`prong, courts apply a “purposeful availment” analysis in suits sounding in contract and a
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`“purposeful direction” analysis (also known as the effects test) in suits sounding in tort.
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`Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The
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`purposeful direction test applies here because plaintiff’s claims sound in tort.
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`Under the Calder effects test, purposeful direction exists when a defendant
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`commits an act outside the forum that was intended to and does in fact cause injury in
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`the forum, meaning, the defendant must (1) commit an intentional act (2) expressly aimed
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`at the forum (3) that causes harm that the defendant knows is likely to be suffered in the
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`forum. Calder v. Jones, 465 U.S. 783, 788-89 (1984); Washington Shoe Co. v. A-Z
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`Sporting Goods Inc., 704 F.3d 668, 673 (9th Cir. 2012). The effects test focuses on “the
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`forum in which the defendant’s acts were felt, whether or not the actions themselves
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`occurred within the forum.” Mavrix, 647 F.3d at 1228. “However, referring to the Calder
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`test as an effects test can be misleading. For this reason, we have warned courts not to
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`focus too narrowly on the test's third prong—the effects prong—holding that ‘something
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`more’ is needed in addition to a mere foreseeable effect.” Pebble Beach Co. v. Caddy,
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`453 F.3d 1151, 1156 (9th Cir. 2006) (citation omitted).
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`2.
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`Analysis
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`Here, plaintiff offers no argument that any of the three defendants, based in either
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`Canada or Delaware, are subject to general jurisdiction in this court. The assessment
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`thus focuses on whether defendants’ conduct gives rise to specific jurisdiction.
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`Plaintiff’s allegations establish only that Shopify is IABMFG’s vendor for an online
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`sales platform. A vendor’s sale of a product to IABMFG — even if IABMFG has
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`substantial business here and the vendor knew it — does not establish specific personal
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`jurisdiction over the vendor. Further, as plaintiff alleges, “Shopify is an e-commerce
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`platform that enables merchants to sell products online.” SAC ¶ 24. Such passive
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`conduct does not represent an intentional act directed at California residents. Shopify
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`serves as an agent of IABMGF, providing hosting services for the latter’s website, which
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`falls far short of invoking the benefits and protections of California’s laws. Though
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`plaintiff makes much of Shopify’s Los Angeles-based storefront (SAC ¶¶ 10-12), even if
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`the court considered that to be purposeful availment of the benefits of this forum (it does
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`not), plaintiff still flatly fails to clarify how his Internet-based claims arise from or even
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`relate to those activities. The court does not have specific jurisdiction over Shopify Inc. or
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`Shopify USA based on these allegations.
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`Plaintiff additionally makes specific jurisdictional claims about the conduct of
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`Shopify Payments in this forum, namely, the entity’s contract with Stripe. “[T]he mere
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`existence of a contract with a party in the forum state does not constitute sufficient
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`minimum contacts for jurisdiction.” Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir.
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`1990). So too here. Shopify Payments’ contract with a forum resident is not sufficient to
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`show that the defendant expressly aimed acts at the forum state, as is necessary to fulfill
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`the express aiming prong of the purposeful direction test. See Speidel v. Markota, 2021
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`WL 3463895, at *4 (C.D. Cal. 2021). Therefore, the court lacks both general and specific
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`personal jurisdiction over these three defendants.
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`//
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`//
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`Case 4:21-cv-06269-PJH Document 66 Filed 05/05/22 Page 9 of 9
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`For the reasons stated above, the court GRANTS defendants’ motions to dismiss.
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`CONCLUSION
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`Dismissal for failure to give defendants notice of the claims alleged against each of them
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`would be with leave to amend. However, the court DISMISSES the action without leave
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`to amend because it does not have personal jurisdiction over any of the defendants.
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`IT IS SO ORDERED.
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`Dated: May 5, 2022
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`/s/ Phyllis J. Hamilton
`PHYLLIS J. HAMILTON
`United States District Judge
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