Judge Andre Birotte, Jr., in the Central District of California, dismissed a class action involving artificial intelligence (AI) call analytics in customer communications. Defendant used AI-powered call recording and transcription services across its dealership entities in California. Plaintiffs alleged that their calls were recorded and analyzed without their consent or prior notice, and that the resulting data was used for marketing and service optimization.
Jurisdictional Challenge
Defendant moved to dismiss the complaint on several grounds, but the court focused on the threshold issue of personal jurisdiction. Under federal law, a court must have either general or specific jurisdiction over a defendant. General jurisdiction requires “continuous and systematic” contacts with the forum state, while specific jurisdiction requires that the alleged conduct be purposefully directed at the forum and give rise to the claims.
The court found that defendant, as a non-resident entity, did not have sufficient contacts with California to support general jurisdiction. The analysis then turned to specific jurisdiction, applying the Ninth Circuit’s three-prong test: (1) purposeful direction of activities at the forum, (2) claims arising out of those activities, and (3) reasonableness of exercising jurisdiction.
Plaintiffs argued that defendant’s substantial revenue from California and its ownership of California-based subsidiaries established the necessary forum contacts. However, the court held that mere revenue generation and subsidiary ownership do not amount to “express aiming” at the forum state for jurisdictional purposes. The court emphasized that the challenged conduct—contracting for and deploying call-recording technology—was implemented as a uniform, nationwide practice, not specifically targeted at California or its residents.
Additionally, the plaintiffs failed to allege that defendant exercised control over its subsidiaries’ day-to-day operations or adopted California-specific policies regarding call recording. The court cited precedent holding that parent company status alone does not confer jurisdiction based on subsidiary activities unless there is clear evidence of agency or control related to the alleged misconduct.
Mike Xavier, et al. v. AutoNation, Inc., No. 5:25−CV−00731−AB−DTB, 2026 WL 166909 (C.D. Cal. Jan. 14, 2026).
