TCPA Claim Defense Bites The Dust – Advertising, Marketing & Branding

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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