U.S. Court Of Appeals For The Ninth Circuit Clarifies When Website Operators Are Subject To Personal Jurisdiction

• Published date: 02 April 2024
• Subject Matter: Litigation, Mediation & Arbitration, Media, Telecoms, IT, Entertainment, Trials & Appeals & Compensation, Advertising, Marketing & Branding
• Law Firm: Cahill Gordon & Reindel LLP
• Author: Mr Joel Kurtzberg, Adam S. Mintz, Sophia Slade-Ilaria and Ryan M. Maloney

Courts are increasingly being asked to decide when website operators are subject to personal jurisdiction, a potentially vexing problem, because websites generally lack a specific location and can be accessed from almost anywhere in the world. In two recent decisions, the United States Court of Appeals for the Ninth Circuit has provided guidance on when website operators are subject to jurisdiction and the relevant legal test that applies in such cases.

In July 2023, in Herbal Brands, Inc. v. Photoplaza, Inc., the Ninth Circuit held that selling a physical product from a website and causing the product to be delivered to the forum is sufficient to establish personal jurisdiction in the forum with regard to the sale of the product.¹ In doing so, the court joined the Second and Seventh Circuits, which have reached similar conclusions.² Several months later, in Briskin v. Shopify, the court held that extracting and retaining customer data and tracking online purchasers in a forum is not, by itself, a sufficient basis to establish personal jurisdiction in the forum.³

These two decisions by the Ninth Circuit were narrow and did not address other types of activities that would be sufficient to establish personal jurisdiction, including whether knowingly profiting from consumers in the forum state or having a certain threshold of sales and deliveries would confer jurisdiction, leaving those questions to be resolved in the future.

I. Background: Personal Jurisdiction Over Website Operators

To exercise personal jurisdiction over out-of-state defendants, courts typically must have specific jurisdiction or "case-linked" jurisdiction.⁴

In the internet context, courts have traditionally used the "interactivity" test first articulated in Zippo Mfg. Co. v. Zippo Dot Com, Inc.⁵ to determine whether a website operator is subject to personal jurisdiction for online activity. The Zippo interactivity test considers the degree of interaction between a website and its users.⁶ Under this test, a website that exchanges information with a user, such as payment information or some other transaction, is an "interactive website" and is more likely to be subject to the exercise of jurisdiction.⁷ A website that merely posts information accessible to viewers is a "passive" website and is less likely to be subject to personal jurisdiction in the forums where users access the site.⁸

In recent years, courts have moved away from the Zippo test. In 2014, the U.S. Supreme Court held in...