Shopify Secures Dismissal of Online Shopper’s Data Privacy Class Action

An opinion by Judge Phyllis J. Hamilton issued late last week dismissed, with prejudice, an action brought by a California consumer against three entities: Shopify Inc., a Canadian company, and two United States subsidiaries. The court ruled that the plaintiff neither provided the defendants with notice of the claims and moreover, failed to persuade the court that it had personal jurisdiction over any of the entities.

The ruling explained that the defendants “run an e-commerce platform that provides payment processing services to millions of merchants across the Internet.” The case argues that Shopify illegally and surreptitiously tracks and collects details about consumers’ financial transactions when online shoppers transact through an online shop that uses Shopify as a vendor. 

In addition, the plaintiff made allegations about Shopify’s installation of cookies on users’ browsers to track shoppers’ transactions across the Shopify merchant network. The initial complaint, filed in August 2021, stated claims for invasion of privacy and violation of a California computer fraud law, among others.

In three separate motions, the Shopify entities moved to dismiss the complaint. The consumer subsequently opposed.

Judge Hamilton’s opinion focused on threshold issues that she ruled ultimately barred the plaintiff’s case. The second amended complaint failed to satisfy the pleading requirements of Federal Rule of Civil Procedure 8, the court said, first pointing out that the “plaintiff admittedly alleges all claims against all three defendants without distinguishing the conduct of any single entity, referring collectively to ‘Shopify.’” 

Judge Hamilton said that contrary to the plaintiff’s assertion, the defendants were not sufficiently related to put them on notice of the claims leveled against them. “The complaint does not allege plaintiff’s particular claims against any specific defendant, and rather generally alleges all claims against all defendants without identifying which defendant is responsible for his alleged injuries,” the court reasoned.

The latter half of the nine-page opinion analyzed whether the court had specific personal jurisdiction over the defendants. Judge Hamilton reviewed Supreme Court jurisprudence specifying the kind of connectivity a corporate defendant must have with a forum in order for the court to exercise jurisdiction over it. Ultimately, the plaintiff’s allegations mustered only “passive conduct that does not represent an intentional act directed at California residents,” the ruling said.

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