X Corp v. Center for Countering Digital Hate, Inc.

Background

X Corp. sued Center for Countering Digital Hate U.S., Center for Countering Digital Hate Ltd. (together, CCDH), Stichting European Climate Foundation (ECF), and unnamed defendants. The order concerns only ECF’s motion. X Corp. alleged that ECF shared Brandwatch login credentials with CCDH, allowing CCDH to access X Corp. data held through Brandwatch without authorization. X Corp. further alleged that CCDH used the data in reports and articles critical of X Corp., causing lost advertising revenue and other losses.

The amended complaint asserted four claims: breach of X Corp.’s terms of service against CCDH; violation of the Computer Fraud and Abuse Act against all defendants; intentional interference with contractual relations against all defendants; and inducing breach of contract against all defendants. ECF moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which addresses personal jurisdiction, and Rule 12(b)(6), which addresses failure to state a legally sufficient claim.

Failure to State a Claim

ECF joined CCDH’s arguments concerning the three claims brought against ECF. Based on the reasons stated in the court’s separate order addressing CCDH’s motion, the court granted dismissal under Rule 12(b)(6) and did not allow X Corp. to amend its complaint.

Personal Jurisdiction

The court also considered whether it could exercise specific personal jurisdiction over ECF. X Corp. argued that jurisdiction existed under Federal Rule of Civil Procedure 4(k)(2), which can allow a federal court to exercise nationwide jurisdiction over certain federal claims, and through ECF’s contacts with California.

For nationwide jurisdiction, the court concluded that X Corp. had shown an intentional act and foreseeable harm, but had not shown that ECF expressly aimed its conduct at the United States. The court reasoned that sharing Brandwatch login information, without targeting a particular U.S. server or forum, did not create a meaningful connection between ECF and the United States. The fact that some Brandwatch servers were in the United States, and the fact that X Corp. had its principal place of business in California, were not enough. The court also rejected the argument that ECF’s alleged targeting of X Corp. individually, or its receipt of donations from California, independently established jurisdiction.

The court further concluded that X Corp.’s claims did not arise out of or relate to ECF’s contacts with the United States. The evidence before the court showed that ECF shared login credentials with CCDH U.K., and the court found that the relevant conduct occurred in connection with a U.K. entity rather than through a sufficient contact with the United States. The court also determined that exercising jurisdiction would be unreasonable, considering the limited nature of ECF’s contacts, the burden on ECF of litigating in California, the location of evidence and witnesses in Europe, and the existence of an alternative forum in the United Kingdom or the Netherlands.

As to California-specific jurisdiction, the court found that X Corp.’s allegations about ECF’s solicitation of donations from California were too conclusory. It also held that the location of Brandwatch servers, including servers in California or elsewhere in the United States, did not by itself establish that ECF expressly aimed its conduct at California. The court therefore granted the motion to dismiss for lack of personal jurisdiction.

Jurisdictional Discovery and Disposition

X Corp. asked for discovery about ECF’s communications and relationship with CCDH, followed by an opportunity to amend. The court denied that request because the complaint failed to state a claim and because further discovery would not establish a sufficient basis for personal jurisdiction. The court granted ECF’s motion to dismiss based on failure to state a claim and lack of personal jurisdiction.