Johnson v. Blue Nile, Inc.

Background

Blue Nile sells jewelry through its website. It used FullStory software called “Session Replay” to record and analyze visitors’ website activity, including keystrokes, mouse clicks, and page scrolling. FullStory stored the information on its servers, and Blue Nile could review a live or recorded session.

Susan Johnson, a California resident, visited Blue Nile’s website monthly from January through May 2020 to browse jewelry but did not buy anything. She alleged that FullStory captured information about her visits, including the date and time, visit duration, internet protocol address, location, browser type, operating system, and information entered into purchase forms. The proposed class consisted of California residents whose electronic communications were intercepted or recorded by FullStory.

Claims and Arguments

Johnson’s amended complaint asserted three claims: (1) wiretapping under California Penal Code section 631(a); (2) sale of eavesdropping software under section 635(a); and (3) invasion of privacy under the California Constitution. She withdrew the third claim.

The defendants moved to dismiss. They argued, among other things, that FullStory was Blue Nile’s software-services vendor and therefore was a party to the communications rather than a third-party eavesdropper. They also argued that the court lacked specific personal jurisdiction, meaning a sufficient connection between the defendants’ conduct and California for the court to exercise authority over them.

Analysis

The court followed the reasoning in a prior related proceeding involving similar issues. For the section 631(a) claim, it held that Johnson did not plausibly allege that FullStory was a third-party eavesdropper. Because there was no underlying wiretapping by FullStory, Blue Nile could not be liable for helping that alleged wrongdoing. The court also held that information such as internet protocol addresses, locations, browser types, and operating systems was not communication content, and dismissed the claim to the extent it relied on that information. The court did not treat Blue Nile’s privacy policy as a separate ground for dismissal because its holding that there was no wiretapping made the policy and consent issues unnecessary to decide.

For the section 635(a) claim, the court held that Johnson had no private right to bring the claim and lacked standing under Article III of the Constitution. Because of those conclusions, the court did not address the defendants’ other arguments about that claim.

The court also held that Johnson did not establish specific personal jurisdiction over FullStory. The allegations showed only that FullStory sold software services to Blue Nile; they did not plausibly show that FullStory wiretapped website users. As to Blue Nile, the court explained that selling goods to California customers could potentially support jurisdiction if Blue Nile had committed wiretapping, but wiretapping was the only alleged basis for jurisdiction and the complaint did not plausibly plead it. The court therefore found no specific personal jurisdiction over either defendant.

Disposition

The court dismissed the complaint with leave to amend within 21 days. It dismissed Johnson’s withdrawn third claim with prejudice. The court also required any amended complaint to include a blackline comparison with the current complaint.