Judge Eumi K. Lee of the Northern District of California dismissed a privacy class action challenging website technology against an out-of-state corporate defendant for lack of personal jurisdiction. The defendant, a Delaware-incorporated parent company with its principal place of business in Virginia, did not have sufficient contacts with California.
The court reiterated the three-prong test for specific jurisdiction: (1) the defendant must purposefully avail itself of or direct activities toward the forum state; (2) the claim must arise out of or relate to those activities; and (3) the exercise of jurisdiction must be fair and reasonable. The burden is on the plaintiff to establish the first two prongs.
Plaintiffs argued that the defendant’s operation of a global website allowing users to shop for and book hotel rooms in California constituted purposeful availment. The court rejected this argument, noting that the parent company did not itself operate hotels or lease rooms in California, and that the complaint lacked allegations tying the parent company’s business activities directly to California. General website accessibility and the ability to make reservations were deemed insufficient to establish regular business activity in the state.
The plaintiffs also pointed to the company’s privacy policy, which referenced the collection and potential sale of user data, including data from California residents. The court found these allegations lacking, distinguishing the case from recent precedent where a defendant directly targeted California consumers and used their data for marketing to California businesses. Here, the data collection was performed by third parties via the website, and there was no evidence the parent company specifically targeted or marketed to California consumers.
The court further held that the presence of a privacy statement on a globally accessible website, even one referencing California law, does not by itself establish personal jurisdiction. Accepting such an argument would subject companies to jurisdiction in any state where their website is accessible, undermining the principles of specific jurisdiction.
Shah, et al. v. Hilton Worldwide Holdings Inc., 5:25-cv-01018-EKL (June 11, 2025 N.D. Cal.).
