X Corp. v. Bright Data Ltd.

Background

X Corp. owns and operates the social media platform X, formerly known as Twitter. The opinion states that X Corp. is organized under Nevada law and has its principal place of business in California. Bright Data Ltd. sells data scraped from websites and social media platforms, along with tools and services that help customers collect data automatically. Bright Data is incorporated in Israel, where its principal place of business is located, and it maintained and advertised a sales office in San Francisco.

X alleged that Bright Data scraped and sold millions of records from X in violation of X’s Terms of Service. X also alleged that Bright Data encouraged other X users to violate their agreements with X by selling tools and services aimed at collecting data from X. X asserted claims for breach of contract, tortious interference with contract, unjust enrichment, trespass to chattels, violation of California Business and Professions Code Section 17200, and misappropriation.

Bright Data moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss X’s tort claims, counts II through VI, for lack of personal jurisdiction. It also moved under Rule 12(b)(6) for failure to state a claim. This order addressed only the personal-jurisdiction argument; the court stated that an order on the remaining arguments would follow.

Personal Jurisdiction Analysis

Personal jurisdiction is a court’s authority to exercise power over a defendant in a case. Because Bright Data presented a written, facial challenge rather than requesting an evidentiary hearing, X needed to make a prima facie showing—an initial showing based on its pleadings—that jurisdiction was proper. The court treated X’s uncontested factual allegations as true for this purpose.

The court applied the three-part test for specific personal jurisdiction over a nonresident defendant in tort cases: the defendant must purposefully direct activities at the state or one of its residents; the claims must arise from or relate to those activities; and exercising jurisdiction must be consistent with fair play and substantial justice. The court found that all three requirements were met.

For purposeful direction, the court found that Bright Data had taken intentional actions, including selling scraped data, scraping tools, and Internet Protocol address proxies that could help customers evade anti-scraping measures. The court also relied on allegations that Bright Data directed potential customers to its San Francisco sales office, located business-development and sales personnel in the Bay Area, advertised and sold California Internet Protocol address proxies, and marketed products specifically for scraping X’s platform.

The court further found that Bright Data knew its activities could harm X Corp. in California. Bright Data’s website advertised an ability to bypass X Corp.’s technological safeguards. The court stated that whether those activities actually created liability or caused legally compensable harm were questions for a later stage, but that harm to X Corp. in California was foreseeable for the jurisdictional analysis.

The court concluded that X’s tort and contract claims arose from Bright Data’s sales of scraped data, scraping tools, and Internet Protocol address proxies, including sales directed to California residents. It also found that it was reasonable for a company whose business involved scraping data from California companies and making sales to California consumers to be sued in California.

Ruling

The court denied Bright Data’s motion to dismiss X Corp.’s tort claims for lack of personal jurisdiction. The ruling did not decide whether Bright Data is liable, whether its conduct violated X’s rights, or whether X adequately stated its tort claims under Rule 12(b)(6). The court stated that the remaining arguments in the motion to dismiss would be addressed in a later order.