Shopify Moves to Dismiss Consumer Data Privacy Complaint

In three separate motions to dismiss, Shopify Inc. and two affiliates argued that a class action complaint stating that it secretly tracks consumer behavior is without merit. In the case of Shopify Payments (USA) Inc., the entity contended that it was belatedly added to the plaintiffs’ second amended pleading in a series of allegations that fail to provide it notice and suffer from other fatal pleading flaws.

As previously reported, the suit dates back to August 2021 when a California consumer took aim at the e-commerce platform, which helps merchants to sell their products and services online through a suite of offerings.

The plaintiff argued that Shopify surreptitiously collects, stores, and evaluates sensitive shopper communications and information in violation of consumer rights protected by the California Constitution and state and common law. The complaint specified that Shopify’s conduct violates the reasonable expectation of privacy a consumer has when using merchant websites because a consumer expects to communicate directly with the merchant and the merchant alone.

The complaint was amended twice, the second time during dismissal briefing after the court permitted the plaintiffs to replead their allegations. “If the SAC is truly as defective as defendants assert, they will face little difficulty in updating and refiling their briefs to seek dismissal,” the court commented.

This week’s dismissal motion by Shopify Payments argues, as the other two entities’ motions did, that the complaint wrongly accuses it of “committing crimes and torts for processing [] purchase information and utilizing routine cookies in exactly the manner [its] disclosures said it would.” As such, the complaint fails to plead facts sufficient to establish the requisite lack of consent for each of its claims, the defendants contend.

The motion dedicates several pages to explaining the difference between Shopify Payments and the other two defendants, specifying that the former “provides payment account boarding, payment underwriting, and payment data transmission services that help merchants integrate with a payment processor, so that the payment processor can accept and process credit card, debit card, and other types of payments for the merchant’s sales.”

However, Shopify Payments says the complaint fails to distinguish between the entities, referring to them collectively as a “Shopify,” a “fictitious single entity.” The jumbled labeling fails to put Shopify Payments on notice of the misconduct of which it is accused, the motion says. 

It also claims that the Northern District of California court has no jurisdiction over Shopify Payments, as the payment arm lacks the requisite ties to the plaintiff’s selected forum.

The plaintiff is represented by Gutride Safier LLP and the Shopify entities by Orrick, Herrington & Sutcliffe LLP.