dotStrategy, Co. v. Twitter Inc

Background

William F. Doshier and dotStrategy, Co. filed a putative class action against Twitter, Inc. The complaint alleged violations of Arkansas statutes, breach of contract, and common-law fraud based on Twitter's alleged charging of advertisers for fake engagements with advertisements or promoted tweets. Twitter removed the case from Arkansas state court to the Eastern District of Arkansas.

Twitter moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) for improper venue or, alternatively, to transfer the case to the Northern District of California under 28 U.S.C. § 1404(a). Twitter argued that it was not a resident of Arkansas for venue purposes and that the events underlying the claims did not occur there. The plaintiffs opposed the motion.

Venue analysis

The court concluded that Twitter was not subject to general personal jurisdiction in Arkansas. Twitter is a Delaware corporation with its principal place of business in San Francisco, California. The court also concluded that specific personal jurisdiction was lacking. Although the plaintiffs lived in the Eastern District of Arkansas and felt harm there, the court explained that the defendant's own contacts with the forum—not the plaintiffs' unilateral activities—must connect the defendant to the forum.

The court determined that a substantial part of the events or omissions underlying the claims did not occur in the Eastern District of Arkansas. The plaintiffs' contracting with Twitter occurred electronically with Twitter's principal place of business in California; user engagements occurred wherever users interacted with the promoted tweets; and Twitter allegedly initiated the charges at its California headquarters. Twitter also represented that its advertising platform, systems for identifying fake users, website, and billing practices were developed or maintained in California.

Because the court found that the Northern District of California was a district where the case could be brought, it concluded that the alternative venue provision in 28 U.S.C. § 1391(b)(3) did not make venue proper in Arkansas.

Transfer decision

The court stated that when venue is improper, 28 U.S.C. § 1406(a) allows dismissal or, in the interest of justice, transfer to a district where the case could have been brought. The court also considered transfer under 28 U.S.C. § 1404(a), which permits transfer for the convenience of the parties and witnesses and in the interest of justice.

Twitter argued that its Terms of Service and Master Services Agreement contained provisions requiring disputes to be brought in San Francisco County, California, and governed by California law. The plaintiffs disputed whether those provisions applied and argued, among other things, that Twitter had breached any agreement first. The court concluded that transfer to the Northern District of California was warranted under § 1406(a), or alternatively under § 1404(a), based on the facts and circumstances presented.

Disposition

The court determined that venue in the Eastern District of Arkansas was improper as to Twitter and granted the motion to transfer venue. Even if venue had been proper there, the court determined that transfer was appropriate under § 1404(a). It directed the clerk to transfer the case immediately to the Northern District of California. The order did not resolve the merits of the plaintiffs' claims.