Vedder Thinking | Articles Challenging Personal Jurisdiction In Online Conduct Cases
March 27, 2017
As published on March 27, 2017 in Law360.
Last month, Judge Edmond Chang of the Northern District of Illinois rejected Google’s arguments that application of the Illinois Biometric Information Privacy Act (BIPA) to facial geometry scanning by Google Photos is, on its face, an improper extraterritorial application of Illinois law. See Rivera v. Google Inc., 2017 U.S. Dist. LEXIS 27276 (N.D. Ill. Feb. 27, 2017). Faced with Google’s arguments that the claims would require extraterritorial application of the statute and/or would violate the dormant commerce clause by reaching beyond state boundaries, the court essentially punted, saying that “[d]iscovery is needed to determine whether there are legitimate extraterritoriality concerns.” Id. at *28. The court also rejected Google’s argument that BIPA does not cover facial geometry scans pulled from photographs. Id. at *22.
But conspicuously absent from the opinion or any of the briefing is a discussion of personal jurisdiction. As we wrote about last year, Facebook (one of the few online companies that could even attempt to rival Google in terms of online popularity and global reach) was able to duck a similar lawsuit under BIPA when the court held that the Northern District of Illinois lacked specific personal jurisdiction over Facebook. See Gullen v. Facebook.com Inc. It is, of course, much easier to be an armchair quarterback in situations like this — particularly when not burdened by knowledge of facts that might undermine the argument — but it would seem that Google could have argued, like Facebook did, that because the plaintiffs do not allege (and could not allege) that Google “targets its alleged biometric collection activities at Illinois residents,” there is no specific personal jurisdiction over Google in this instance. As we said last year, if a site like Facebook with “millions” of in-state contacts is not subject to personal jurisdiction, many other internet companies could successfully challenge personal jurisdiction based on the rationale laid out in Gullen and the authorities that it relied on.
The Gullen decision is firmly rooted in recent U.S. Supreme Court and Seventh Circuit precedent. In Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014), the U.S. Supreme Court held that in order to create specific personal jurisdiction, “the relationship must arise out of contacts that the ‘defendant himself’ creates with the forum state ... [O]ur ‘minimum contacts’ analysis looks to the defendant’s contacts with the forum state itself, not the defendant’s contacts with persons who reside there.” (Emphasis in original). The reasoning is that individuals, like the plaintiffs in Rivera, who initiated the contacts with Google in such a way that Google had no control over where the information was coming from, cannot create personal jurisdiction by virtue of their minimum contacts with the defendant. Rather, to establish personal jurisdiction — or even to adequately plead personal jurisdiction — the plaintiffs would need to allege some sort of affirmative contact by Google with the state of Illinois.
The Seventh Circuit interpreted Walden in just such a fashion in Advanced Tactical Ordnance Systems LLC v. Real Action Paintball Inc., 751 F.3d 796, 801-02 (7th Cir. 2014). The court held that a website’s impact on plaintiffs with connections to the state of Illinois was not enough to create personal jurisdiction. “The ‘mere fact that [the defendant’s] conduct affected the plaintiffs with connections to the forum state does not suffice to authorize jurisdiction.’ ... [A]fter Walden there can be no doubt that ‘the plaintiff cannot be the only link between the defendant and the forum.’” Id. (internal citations omitted). The court further held that “the operation of an interactive website does not show that the defendant has formed a contact with the forum state. And, without the defendant’s creating a sufficient connection (or ‘minimum contacts’) with the forum state itself, personal jurisdiction is not proper.” Id. Again, without being burdened by the underlying facts, it would seem that a company like Google could rely on Walden and Advanced Tactical to dispute personal jurisdiction when there are no contacts between the defendant and the forum state, other than those created by the plaintiffs.
An additional consideration in this analysis is whether any connections the defendant may have to the state are actually related to the underlying action. One reasonable interpretation of Walden and other related cases is that even if the defendant has limited contacts with the forum state, those contacts are not sufficient to create specific personal jurisdiction unless those facts relate to the underlying dispute. This reasoning is demonstrated in the Missouri Supreme Court’s recent personal jurisdiction decision in State ex rel. Norfolk Southern Railway. v. Dolan, 2017 Mo. LEXIS 66 (Mo. Feb. 28, 2017). There, the court found that although a company was registered to do business in the state of Missouri and, in fact, regularly conducted business in the state of Missouri, the court lacked personal jurisdiction because “jurisdiction would exist only over claims that are related to those contacts.” Id. at *13. “Unrelated suits can be brought in the forum only when the forum has general jurisdiction.” Id. Thus, bringing this reasoning back to the case study at hand, Google may have been able to argue that because the facial geometry scanning was done on a nationwide basis, with no consideration for which states were at issue, the court lacked personal jurisdiction over disputes related to facial geometry scanning.
Whether this is the right interpretation of Walden should soon be settled by the Supreme Court, which recently granted certiorari to review the decision of the California Supreme Court in Bristol-Myers Squibb Company v. Superior Court, 1 Cal. 5th 783 (Cal. 2016). This case is expected to decide whether it is necessary for there to be a the causal nexus between a defendant’s conduct alleged to constitute forum contacts and the plaintiff’s alleged injuries.
In light of the Gullen, Walden, Advanced Tactical and other decisions, defendants in cases arising from alleged online conduct should carefully consider challenging personal jurisdiction. This is particularly true because, as the Google case highlights, even meritorious arguments may not be enough to achieve dismissal without incurring the costs of discovery.