The State of Texas v. YELP, Inc.

• Court: Court of Appeals of Texas
• Decided: January 16, 2025
• Docket: 15-24-00040-CV
• Status: Published

Opinion

ACCEPTED 15-24-00040-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 1/16/2025 9:02 AM CHRISTOPHER A. PRINE CLERK FILED IN 15th COURT OF APPEALS January 16, 2025 AUSTIN, TEXAS 1/16/2025 9:02:24 AM Via Electronic Filing and FedEx CHRISTOPHER A. PRINE Clerk Christopher A. Prine Clerk of Court Fifteenth Court of Appeals William P. Clements Building P.O. Box 12852 Austin, TX 78701

Re: State of Texas v. Yelp Inc., No. 15-24-00040-CV Third Notice of Supplemental Authority

Dear Mr. Prine:

Appellee Yelp Inc. (“Yelp”) submits this Third Notice of Supplemental Authority (“Notice”) concerning a recent case from the Thirteenth Court of Appeals involving similar facts and issues that arose at oral argument and that are included in the parties’ briefs.

Yelp respectfully requests that a copy of this Notice be provided to Chief Justice Scott Brister, Justice Scott Field and Justice April Farris.

I. Google LLC v. The State of Texas, No. 13-23-00114-CV, 2025 WL 52611 (Tex. App.— Corpus Christi–Edinburg Jan. 9, 2025, no pet. h.) (Ex. A)

In Google, the State of Texas (“State”) brought a Deceptive Trade Practices Act (“DTPA”) case against Google LLC (“Google”), a California-based company, for alleged representations and omissions made by Google on its “website and software that are accessible nationwide.” Id. at *1. More specifically, the State alleged that Google’s statements about location settings and private browsing features misled Texas users about how Google collected and used their data for a variety of purposes, including to sell targeted advertisements. Id. at *6–7.

The Thirteenth Court of Appeals reversed the trial court’s denial of Google’s Special Appearance, held that Texas lacked general and specific jurisdiction over Google, and dismissed the State’s claims. Id. at *8.

First, the Court of Appeals found that Google was not subject to general jurisdiction merely because it operated in Texas, employed more than 5,000 employees in Texas, and received approximately 8.9% of its U.S. revenue from Texas. Id. at *3–5. These contacts did not mean that Google is “essentially at home” in Texas, which is required for general jurisdiction. Id. at *3–4. The court opined that to find jurisdiction over Google would create a scenario where the company could face any and all claims against it in Texas, no matter where the claims may have come from, because doing business in Texas would equate to having its principal place of business in Texas.

Haynes and Boone, LLP 98 San Jacinto Ave.| Suite 1500 | Austin, TX 78701 T: 512.867.8400 | haynesboone.com January 16, 2025 Page 2

But a company “cannot be ‘essentially at home’ in every foreign jurisdiction where it operates.” Id. Here, Yelp has similarly argued that its limited contacts in Texas—far fewer than Google’s— do not render it “essentially at home” in Texas. Yelp’s Brief at 21–23, 25.

The Thirteenth Court of Appeals also rejected the State’s argument that Google consented to general jurisdiction because it registered to do business in Texas. See State’s Brief, 2023 WL 5048227 at *47–50 (citing Mallory v. Norfolk S. Ry. Co., 143 S. Ct. 2028, 2037 (2023); Acacia Pipeline Corp. v. Champlin Expl., Inc., 769 S.W.2d 719, 720 (Tex. App.—Houston [1st Dist.] 1989, no writ)). During oral argument, Google explained that the State did not plead consent jurisdiction and that its reliance on Mallory was wrong. The State did not push back against Google’s assertions and focused on specific jurisdiction during the argument. Yelp has similarly argued that the State did not plead consent jurisdiction and relied on an erroneous reading of Mallory. Yelp’s Brief at 24–36.

Second, the Court of Appeals found that Google was not subject to specific jurisdiction because the State did not specifically plead that the operative facts “arise out of or relate to” Google’s contacts with Texas. Id. at *7 (a plaintiff must show a “substantial connection” between the defendant’s contacts with Texas and the operative facts of the case). None of the alleged misrepresentations were made in Texas or by Texans. Instead, Google employees “directed the alleged misleading statements from” outside of Texas. Id. As a result, the Court held, “[w]e cannot conclude [the State] met its initial burden to show that [Google’s] allegedly tortious conduct occurring outside of Texas is sufficient to confer specific jurisdiction.” Id. In sum, the Court lacked specific jurisdiction over Google because the State failed to identify an “activity or occurrence” by Google that transpired in Texas. Id.

Yelp has similarly argued that the State did not plead that the operative facts “arise out of or relate to” Yelp’s contacts with Texas. Yelp’s Brief at 23–24. The State failed to show a “substantial connection” between Yelp’s contacts with Texas and the operative facts of the case. As it did in Google, the State alleged that Yelp made its statement nationwide on Yelp’s website. State’s Pet., CR at 5 (Yelp’s Consumer Notice was posted “on the Yelp business pages of every pregnancy resource center across the nation.”). Like in Google, Yelp’s alleged misrepresentation was not made in Texas or by Texans. Yelp employees created and managed the Consumer Notice in California, not Texas. And like in Google, the State did not identify an “activity or occurrence” by Yelp that transpired in Texas. Yelp’s Brief at 36–42.

The case against specific jurisdiction here is far stronger than it was in Google. Google’s alleged misrepresentations at least concerned its own products and services and the effect of those statements on Texans’ usage of Google. Google, 2025 WL 52611 at *16 (“According to [the State], [Google] lies about how it tracks and collects data about its Texas users, and Texas residents are unaware of this deception” which is “motivated by [Google]’s desire for more profits from the information it gathers unbeknownst to its users.”). Here, Yelp’s alleged misrepresentation concerned only crisis pregnancy centers as part of a non-interactive Consumer Notice, having nothing to do with inducing any usage of Yelp in Texas. See generally State’s Pet., CR at 5–16. January 16, 2025 Page 3

Respectfully submitted,

Laura Lee Prather Partner, Haynes and Boone, LLP Laura.prather@haynesboone.com Direct Phone Number: (512) 867-8476 Direct Fax Number: (512) 867-8609

Attorney for Appellee Yelp Inc. EXHIBIT A GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

(Tex. 2004). Whether the trial court has personal jurisdiction 2025 WL 52611 over a defendant is a question of law. BMC Software Belg., Only the Westlaw citation is currently available. N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Thus, we review the trial court's ruling on a special appearance de SEE TX R RAP RULE 47.2 FOR novo. Id. The trial court determines the special appearance DESIGNATION AND SIGNING OF OPINIONS. by referring to the pleadings, any stipulations made by and between the parties, any affidavits and attachments filed by Court of Appeals of Texas, Corpus Christi-Edinburg. the parties, discovery, and any oral testimony. TEX. R. CIV. P. 120a(3). Because the question of a court's exercise of personal GOOGLE LLC, Appellant, jurisdiction over a nonresident defendant is one of law, we v. review a trial court's determination of a special appearance de THE STATE OF TEXAS, Appellee. novo. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); BMC Software Belg., 83 S.W.3d at 793. NUMBER 13-23-00114-CV | Where, as here, the trial court does not issue findings of fact January 9, 2025 and conclusions of law, all facts necessary to support the ON APPEAL FROM THE 377TH DISTRICT COURT judgment and supported by the evidence are implied, and we OF VICTORIA COUNTY, TEXAS presume that the trial court resolved all factual disputes in favor of its ruling. BMC Software Belg., 83 S.W.3d at 795; Before Chief Justice Tijerina and Justices Silva and Peña Am. Type Culture Collection v. Coleman, 83 S.W.3d 801, 805– Memorandum Opinion by Chief Justice Tijerina 06 (Tex. 2002). These implied findings are not conclusive and may be challenged for legal and factual sufficiency if the appellate record includes the reporter's and clerk's records. MEMORANDUM OPINION BMC Software Belg., 83 S.W.3d at 795.

JAIME TIJERINA Chief Justice Texas courts may assert personal jurisdiction over a nonresident if (1) the Texas long-arm statute authorizes the *1 This appeal is from the denial of a special appearance exercise of jurisdiction, and (2) the exercise of jurisdiction filed by appellant Google LLC. Appellee the State of Texas is consistent with federal and state constitutional due-process filed suit against appellant under the Texas Deceptive Trade guarantees. Moki Mac, 221 S.W.3d at 574; Gray, Ritter Practices Act (DTPA) on its own behalf seeking civil penalties & Graham, PC v. Goldman Phipps PLLC, 511 S.W.3d for alleged representations and omissions on appellant's 639, 654 (Tex. App.—Corpus Christi–Edinburg 2015, pet. website and software that are accessible nationwide. See denied). The Texas long-arm statute allows Texas courts to TEX. BUS. & COM. CODE ANN. § 17.41 et seq. By three exercise personal jurisdiction over a nonresident defendant issues, Google contends that the trial court erred in denying that “does business” in Texas. See TEX. CIV. PRAC. & its special appearance because there is neither general nor REM. CODE ANN. § 17.042; BMC Software Belg., 83 specific jurisdiction in Texas, and traditional notions of fair S.W.3d at 795. The Texas long-arm statute sets out several play and substantial justice do not support the exercise of activities that constitute “doing business” in Texas; however, personal jurisdiction in Texas. We reverse and render. the list is not exclusive, and Texas's long-arm statute's “broad language extends Texas courts' personal jurisdiction ‘as far as the federal constitutional requirements of due process will I. STANDARD OF REVIEW AND APPLICABLE LAW permit.’ ” Id. (quoting U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977)). Therefore, “the requirements Subject-matter jurisdiction is essential to the authority of a of the Texas long-arm statute are satisfied if the exercise court to decide a case. Bland Indep. Sch. Dist. v. Blue, 34 of personal jurisdiction comports with federal due process S.W.3d 547, 554–55 (Tex. 2000). A special appearance is a limitations.” CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. dilatory plea that challenges the trial court's subject-matter 1996). jurisdiction without regard to whether the asserted claims have merit. Harris County v. Sykes, 136 S.W.3d 635, 638

© 2025 Thomson Reuters. No claim to original U.S. Government Works. 1 GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

*2 Under the Due Process Clause of the Fourteenth defendant. Helicopteros Nacionales de Colombia, S.A. v. Amendment of the United States Constitution, a Texas Hall, 466 U.S. 408, 414 (1984). General jurisdiction allows court has personal jurisdiction over a nonresident defendant for the nonresident defendant to be sued in the forum state for when (1) the nonresident defendant has established minimum all claims even if the claims are not related to the nonresident contacts with the forum state, and (2) the exercise of defendant's activities in that state. BMC Software Belg., 83 jurisdiction does not offend “traditional notions of fair play S.W.3d at 796. In other words, the defendant is treated as and substantial justice.” Int'l Shoe Co. v. Washington, 326 if the defendant's contacts with the forum state have been U.S. 310, 316 (1945); BMC Software Belg., 83 S.W.3d at so constant, the defendant has been essentially rendered “at 795; see U.S. CONST. amend. XIV, § 1. “The exercise of home” in the forum state, which is the equivalent to the personal jurisdiction is proper when the contacts proximately defendant either having a principal place of business in the result from actions of the nonresident defendant which create forum state or being incorporated there. See BNSF Ry. Co. v. a substantial connection with the forum state.” Guardian Tyrrell, 581 U.S. 402, 406 (2017); Daimler AG v. Bauman, Royal Exch. Assurance, Ltd. v. Eng. China Clays, P.L.C., 815 571 U.S. 117, 127 (2014). S.W.2d 223, 226 (Tex. 1991). Specific jurisdiction over the nonresident defendant is present The plaintiff bears the initial burden of pleading “sufficient if the defendant purposefully directed his activities at allegations to bring a nonresident defendant within the residents of Texas and the litigation arose from or related to provisions of the [Texas] long-arm statute.” BMC Software those contacts. Burger King Corp. v. Rudzewicz, 471 U.S. Belg., 83 S.W.3d at 793. The Texas long-arm statute 462, 472 (1985); Helicopteros Nacionales de Colombia, S.A., authorizes the exercise of jurisdiction over a nonresident 466 U.S. at 414; Guardian Royal Exch. Assurance, Ltd., 815 defendant doing business in Texas. TEX. CIV. PRAC. & S.W.2d at 227. REM. CODE ANN. §§ 17.041–.045. Texas's long-arm statute provides: Even if the nonresident defendant has purposefully availed himself of personal jurisdiction in Texas, we must also In addition to other acts that may constitute doing business, conclude that the defendant's liability arises from or is a nonresident does business in this state if the nonresident: substantially connected to those contacts. See Burger King, 471 U.S. at 472; Helicopteros Nacionales de Colombia, S.A., (1) contracts by mail or otherwise with a Texas resident 466 U.S. at 414; Guardian Royal Exch. Assurance, Ltd., 815 and either party is to perform the contract in whole or in S.W.2d at 226. Thus, we review the substantial connection part in this state; between the operative facts of the litigation based on the (2) commits a tort in whole or in part in this state; or claims involved in the litigation and the defendant's contacts with Texas. Retamco Operating, Inc. v. Republic Drilling Co., (3) recruits Texas residents, directly or through an 278 S.W.3d 333, 340 (Tex. 2009). intermediary located in this state, for employment inside or outside this state.

Id. § 17.042. II. GENERAL JURISDICTION

*3 By its first issue, appellant contends that appellee failed Once the plaintiff pleads sufficient allegations to bring a to establish that it is “at home” in Texas; therefore, there is no nonresident defendant within the provisions of the Texas evidence of general jurisdiction. long-arm statute, the burden is on the defendant to challenge personal jurisdiction by filing a special appearance negating all bases of personal jurisdiction asserted by the plaintiff in its A. Applicable Law pleading. Moki Mac, 221 S.W.3d at 574; BMC Software Belg., General or all-purpose personal jurisdiction requires that a 83 S.W.3d at 793; El Puerto de Liverpool, S.A. de C.V. v. Servi defendant be “essentially at home” in the forum state. State Mundo Llantero, S.A. de C.V., 82 S.W.3d 622, 628 (Tex. App. v. Volkswagen Aktiengesellschaft, 669 S.W.3d 399, 412 (Tex. —Corpus Christi–Edinburg 2002, pet. dism'd w.o.j.). 2023) (quotation marks omitted). “This kind of personal jurisdiction allows courts to render a binding judgment The defendant's contacts with the forum state may establish against a defendant even if the plaintiff's claims neither arise either specific or general jurisdiction over the nonresident

© 2025 Thomson Reuters. No claim to original U.S. Government Works. 2 GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

from activities conducted in the forum state nor relate to the in Texas, the fact that appellant has one of four data centers forum state or the defendant's activity there.” Id. (cleaned up). in Texas, and 8.9% of appellant's revenue in the United States Under general jurisdiction, the cause of action “may concern and 4% of its worldwide revenue is made in Texas. events and conduct anywhere in the world.” Id. (quotation marks omitted). *4 In BNSF Ry., the United States Supreme Court stated that under general jurisdiction principles, its due process Specific jurisdiction requires that the operative facts of precedent under the Fourteenth Amendment does not support the defendant's acts relate to the plaintiff's claims; general for “a State to hale an out-of-State corporation before its court jurisdiction allows a defendant to be sued “on any and all when the corporation is not ‘at home’ in the State ....” 581 claims against it, wherever in the world the claims may U.S. at 405–06. The Court explained that “[t]he ‘paradigm’ arise.” Daimler AG, 571 U.S. at 121. In other words, under forums in which a corporate defendant is ‘at home’ ... are general jurisdiction, there is no need to tie the defendant's the corporation's place of incorporation and its principal place acts with the plaintiff's claims. Id. at 132 (“[A] corporation's of business.” Id. at 413. However, only in an “exceptional ‘continuous activity of some sorts within a state is not enough case,” the Court explained could “a corporate defendant's to support the demand that the corporation be amenable to operations in another forum” be “so substantial and of such suits unrelated to that activity.’ ”); see also Grupo Mex. S.A.B. a nature as to render the corporation at home in that State.” de C.V. v. Mt. McKinley Ins. Co. and Everest Reinsurance Id. The Court cited Perkins v. Benguet Consol. Mining Co., Co., No. 13-17-00134-CV, 2020 WL 486501, at *4 (Tex. as being one such exceptional case. 342 U.S. 437, 447–48 App.—Corpus Christi–Edinburg Jan. 30, 2020, pet. denied) (1952). In that case, the corporation was forced by war “to (mem. op.) (“General jurisdiction, on the other hand, does temporarily relocate the enterprise from the Philippines to not require a nexus between the defendant's in-state contacts Ohio.” BNSF Ry., 581 U.S. at 413. Therefore, according to the and the plaintiff's claim; instead, the focus is solely on United States Supreme Court, Ohio had general jurisdiction the defendant's contacts with the forum.”). We must only over the defendant corporation “[b]ecause Ohio then became focus on the defendant's contacts with the forum state. See ‘the center of the corporation's wartime activities.’ ” Id. In Helicopteros Nacionales de Colombia, S.A., 466 U.S. at 414; Daimler AG, the United States Supreme Court clarified that see also Grupo Mex. , 2020 WL 486501, at *4. it has “declined to stretch general jurisdiction beyond limits traditionally recognized” in Perkins. 571 U.S. at 132.

B. Discussion The BNSF Ry. Court emphasized that the defendant was Appellant contends that it met its burden to negate general not amenable to general jurisdiction because it had not jurisdiction because “the undisputed facts confirm that this is been incorporated in the forum State and did not maintain not an exceptional case for general jurisdiction.” Specifically, a principal place of business there. BNSF Ry., 581 U.S. appellant argues that its “operations in Texas represent a at 414. The Court noted that the defendant corporation, small fraction of its operations across the country and across BNSF, had over 2,000 miles of railroad track and more the world” because it employs 58,500 people in California than 2,000 employees in the forum state; however, general and 169,000 people worldwide, while in contrast it has a jurisdiction analysis “does not focus solely on the magnitude total of 2,400 permanent employees in Texas. Appellant of the defendant's in-state contacts.” Id. The activities of states that even considering its temporary employees, interns, the defendant must amount to having its principal place of advisers, vendors, and other miscellaneous employees which business in the forum state. See id. total approximately 5,500 employees in Texas, its number of employees in Texas is not enough to support a conclusion Here, it is undisputed that appellant is not incorporated in that appellant is “essentially at home” in Texas. In addition Texas and does not maintain a principal place of business to tying appellant to Texas based on appellant's 5,500 Texas there. See id. at 413. “Those affiliations have the virtue of employees, appellee claims that general jurisdiction applies being unique—that is, each ordinarily indicates only one because appellant has one of its four data centers in Texas. 1 place—as well as easily ascertainable.” Daimler AG, 571 According to appellee, “Texas accounts for approximately U.S. at 137. Additionally, allegations that the defendant 8.9%” of appellant's U.S. revenue and 4% of its worldwide maintains in-state business alone does not suffice to subject revenue. Thus, appellee argues that general jurisdiction over a corporation to general jurisdiction. See id. at 137–38. The appellant exists due the number of employees appellant has United States Supreme Court rejected the argument that a

© 2025 Thomson Reuters. No claim to original U.S. Government Works. 3 GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

State has general jurisdiction over that defendant because become “the corporation's principal, if temporary, place of the defendant conducts some business in that state. See id. business.’ ” Daimler AG, 571 U.S. at 130 (citing Keeton v. The Court stated, “Plaintiffs would have us look beyond Hustler Mag., Inc., 465 U.S. 770, 780, n.11 (1984)). Here, the exemplar bases [such as having a principal place of that is not the case; it is undisputed that appellant has not business in the state or being incorporated in the states as] made Texas its temporary principal place of business and Goodyear identified, and [instead] approve the exercise of appellee has not made such a claim. Furthermore, we are general jurisdiction in every State in which a corporation without authority to support a conclusion that appellant's ‘engages in a substantial, continuous, and systematic course business dealings as previously set out above in Texas have of business’ ”; however, “[t]hat formulation ... is unacceptably in essence made Texas its principal place of business. See grasping.” Id. (discussing Goodyear Dunlop Tires Ops., S.A. id. We agree with appellant that general jurisdiction requires v. Brown, 564 U.S. 915, 919, 924 (2011)). that the out-of-state corporate defendant's in-state activities be equivalent to the defendant incorporating or establishing The United States Supreme Court explained that “the words a principal place of business in the forum that is rendering ‘continuous and systematic’ were used in International Shoe them “essentially home in the forum state.” See Goodyear, to describe situations in which the exercise of specific 564 U.S. at 919, 924; Volkswagen, 669 S.W.3d at 412; see also jurisdiction would be appropriate.” Id. at 138. Instead, the Grupo Mex., 2020 WL 486501, at *4. The small percentage proper question in a general jurisdiction analysis is: “whether of business that appellant performs in Texas as alleged by [a foreign] corporation's ‘affiliations with the State are so appellee does not even amount to substantial, continuous, continuous and systematic as to render [it] essentially at and systematic contacts, but even if it does, the United home in the forum State.’ ” Id. at 138–39 (internal quotations States Supreme Court has disavowed that rubric as the proper omitted). measure of analyzing general jurisdiction. See Goodyear, 564 U.S. at 919, 924; Volkswagen, 669 S.W.3d at 412; see In Perkins, the defendant admittedly and indisputably moved also Grupo Mex., 2020 WL 486501, at *4. Instead, general its principal place of business to Ohio; that is not the case jurisdiction analysis “calls for an appraisal of a corporation's here. See id.; see also BNSF Ry., 581 U.S. at 413; Daimler activities in their entirety, nationwide and worldwide.” See AG, 571 U.S. at 132 (setting out that “the placement of Daimler AG, 571 U.S. at 139 n.20. From our appraisal of a product into the stream of commerce ‘may bolster an the record before us, appellant's activity in Texas compared affiliation germane to specific jurisdiction,’ ” but “such with its nationwide and worldwide activity does not support contacts ‘do not warrant a determination that, based on those a conclusion that appellant has made Texas its home. See ties, the forum has general jurisdiction over a defendant’ id. Appellee's allegations are insufficient to meet its initial ”). Appellant has not temporarily relocated its business to burden. Moreover, without more, these allegations effectively Texas, and we find no authority supporting a conclusion that negate the trial court's general jurisdiction. Appellant cannot it is sufficient to find general jurisdiction based merely on be “essentially at home” in every foreign jurisdiction where it appellant conducting the amount of business it performs in operates. See BNSF Rye., 581 U.S. at 413; Daimler AG, 571 Texas or employing its number of employees in Texas. Thus, U.S. at 139 & n.20; Goodyear, 564 U.S. at 919; Perkins, 342 we are not persuaded that appellant's contacts with Texas are U.S. at 447–48; see also Grupo Mex., 2020 WL 486501, at *6. sufficient to find under guiding precedent that appellant is “essentially at home” in Texas. See BNSF Ry., 581 U.S. at *5 Therefore, we conclude that appellant negated general 413; see also Daimler AG, 571 U.S. at 129 (explaining that jurisdiction in Texas under these facts and that the trial Perkins “remains the textbook case of general jurisdiction court should have granted its special appearance on general appropriately exercised over a foreign corporation that has not jurisdiction grounds. See Daimler AG, 571 U.S. at 132 (“[A] consented to suit in the forum”) (internal quotations omitted). corporation's ‘continuous activity of some sorts within a state To subject appellant to general jurisdiction in Texas, would is not enough to support the demand that the corporation be allow that appellant “be sued on any and all claims against amenable to suits unrelated to that activity.’ ”). We sustain it [in Texas], wherever in the world the claims may [have] appellant's first issue. 2 arise[n]” because its business in Texas equates with it having its principal place of business in Texas. See Daimler AG, 571 U.S. at 121. The crux of Perkins, according to the United States Supreme Court, is that Ohio, the forum state, had III. SPECIFIC JURISDICTION

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By its second issue, appellant contends that in its petition, to the fair and orderly administration of the laws.’ ” Id. appellee did not allege facts supporting a conclusion that (quoting Int'l Shoe, 326 U.S. at 319). Texas has specific jurisdiction over appellant and that it negated specific jurisdiction. Specifically, appellant argues Even when a defendant has had purposeful contacts with that its contacts do not amount to purposeful availment and no the forum states, “the exercise of specific jurisdiction is substantial connection exists between its contacts with Texas prohibited if ‘the suit’ does not aris[e] out of or relat[e] and the operative facts of the litigation. to the defendant's contacts with the forum.” Id. at 14. This relatedness doctrine requires a nexus between the defendant's contacts and the litigation and the forum. Id. There must be A. Applicable Law a “substantial connection” between the operative facts of the Specific personal jurisdiction focuses on the defendant's litigation and the defendant's contacts with the state. Id. In connections with the state and its relationship to the other words, “there must be ‘an affiliation between the forum plaintiff's claims. See Volkswagen, 669 S.W.3d at 412. In and the underlying controversy, principally, [an] activity or an our specific-jurisdiction analysis we measure the two co- occurrence that takes place in the forum State and is therefore equal components of relatedness and purposeful availment. subject to the State's regulation.’ ” Id. Moki Mac , 221 S.W.3d at 579. The relatedness inquiry defines “the appropriate ‘nexus between the nonresident defendant, the litigation, and the forum.’ ” Luciano v. B. Relatedness SprayFoamPolymers.com, LLC, 625 S.W.3d 1, 14 (Tex. Appellant argues that we should begin our analysis of 2021) (quoting Moki Mac, 221 S.W.3d at 579). “[T]he specific jurisdiction by examining the relatedness doctrine exercise of specific jurisdiction is prohibited if ‘the suit’ does first. Appellant states, that appellee's “live petition identifies not ‘arise out of or relate to the defendant's contacts with various general business contacts that Google has with Texas, the forum.’ ” Id. (alterations omitted). Thus, the lawsuit must which are insufficient to be ‘at home’ in the state and also arise from or relate to “ ‘some act by which the defendant wholly unrelated to this case.” Appellant claims that “[e]ven a purposefully avails itself of the privilege of conducting ‘flood’ of purposeful contacts with a forum state is irrelevant activities within the forum State, thus invoking the benefits if ‘the suit’ does not ‘arise out of or relate to the defendant's and protections of its laws.” Id. at 9 (citing Hanson v. Denckla, contacts with the forum.’ ” Because we agree with appellant, 357 U.S. 235, 253 (1958)). we will first analyze whether the contacts as alleged by appellee are related to the operative facts and the State of “The ‘touchstone of jurisdictional due process [is] Texas. See id. ‘purposeful availment.’ ” Id. The defendant's act in the forum state must amount to it purposefully availing “ ‘itself of the privilege of conducting activities within the forum State, 1. The Allegations thus invoking the benefits and protections of its laws.’ ” Appellee sued appellant pursuant to the DTPA. Appellee Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). alleged that appellant A defendant that has “ ‘deliberately’ engaged in significant activities within a state,” has ““manifestly ... availed himself of the privilege of conducting business there.” Id. (quoting has become one of the richest Burger King, 471 U.S. at 475–76 (cleaned up)). Therefore, companies in the world, in part, because the defendant has availed itself of the “ ‘benefits by deceiving Texans and profiting and protections’ of the forum's laws, it is ‘presumptively off their confusion. Specifically, not unreasonable to require him to submit to the burdens of [appellant] has systematically misled, litigation in that forum as well.’ ” Id. deceived, and withheld material facts from users in Texas about how and *6 Whether the defendant has had minimum contacts why their behavior is tracked and how with the forum state depends solely on the defendant's acts to stop [appellant] from monetizing within that state. Id. Additionally, “fortuitous” or “attenuated” their personal data. As relevant to contacts cannot “be relied upon to satisfy the requirements this Petition, [appellant]'s deceptive of due process.” Id. “Rather, whether due process is satisfied practices fall into two closely related depends upon ‘the quality and nature of the activity in relation

© 2025 Thomson Reuters. No claim to original U.S. Government Works. 5 GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

buckets: tracking location history and sufficiently related to the litigation's operative facts. Id. “[A] tracking private-browsing activity. nonresident directing a tort at Texas from afar is insufficient to confer specific jurisdiction.” Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 157 (Tex. 2013). In our analysis of the relatedness doctrine, we consider what the principal Appellee accused appellant of deceiving Texas residents into complaint involves. TV Azteca v. Ruiz, 490 S.W.3d 29, 53 believing that users can disable location tracking. In addition, (Tex. 2016). appellee accused appellant of collecting Texas users browsing history, even when the users believe that they are not being Appellees do not specifically plead allegations that the tracked by appellant because appellant claims that its users operative facts of the litigation are related to appellant's can go incognito, which appellee claims is a sham. According contacts with Texas. See Luciano, 625 S.W.3d at 8 (the to appellee, appellant lies about how it tracks and collects plaintiff bears the initial burden to plead allegations sufficient data about its Texas users, and Texas residents are unaware to confer jurisdiction). Nonetheless, the evidence shows of this deception. Appellee avers that appellant's deception that appellant's alleged contacts with Texas were made by to Texas users is motivated by appellant's desire for more appellant's employees who were not in Texas. Appellee profits from the information it gathers unbeknownst to its has not alleged that any of appellant's Texas employees users. Appellee alleged that appellant misleads Texas users made the misleading statements. Thus, the evidence shows through both misrepresentations and omissions. that appellant's employees directed the alleged misleading statements from afar, which is insufficient to confer specific Appellee stated that appellant does the following: jurisdiction. See Moncrief Oil Int'l Inc., 414 S.W.3d at [(1)] uses its window into millions of Texans' personal 157. The principal complaint that the terms of service and lives to sell “targeted” advertising designed to exert the disclosures made by appellant were misleading requires that maximum influence over those users. In so doing, the the overwhelming evidence be directed at events outside of Company has reaped spectacular gains at the expense Texas. 3 Id. Stated differently, appellee has not identified an of Texans' privacy. Indeed, [appellant] has generated “activity or occurrence ... that takes place in” Texas. See hundreds of millions—if not billions—of dollars of Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, advertising revenues from ads presented to users in Texas 362 (2021) (cleaned up). Accordingly, we cannot conclude alone. that appellee met its initial burden to show that appellant's allegedly tortious conduct occurring outside of Texas is *7 .... sufficient to confer specific jurisdiction over appellant. See Moncrief Oil Int'l Inc., 414 S.W.3d at 157; see also Ford [(2)] has caused and will cause adverse effects to Motor Co., 592 U.S. at 362 n.3 (rejecting the “view that consumers in Texas, to legitimate business enterprises a state court should have jurisdiction over a nationwide which lawfully conduct trade and commerce in this state, corporation ... on any claim, no matter how unrelated to the and to the State of Texas. Therefore, the Consumer State or [the corporation's] activities there” and explaining Protection Division of the Office of the Attorney General that “[r]emoving the need for any connection between of the State of Texas is of the opinion that these proceedings the case and forum State would transfigure our specific are in the public interest. jurisdiction standard as applied to corporations”). We sustain appellant's second issue. 2. Discussion To prevail, appellee must show that there is a “substantial connection” between appellant's contacts and the operative IV. CONCLUSION facts of the litigation.” Id. If the focus of the trial involves facts that occur outside of the forum state, then the operative *8 The trial court's order denying the special appearance is facts are not sufficiently related. Moki Mac, 221 S.W.3d at reversed and judgment is rendered dismissing all of appellee's 585. Thus, if the events that took place outside of Texas claims against appellant for want of personal jurisdiction. would “consume most if not all of the litigation's attention” and “the overwhelming majority of the evidence [would] be Delivered and filed on the 9th day of January, 2025. directed” at events outside of Texas, then the contacts are not

© 2025 Thomson Reuters. No claim to original U.S. Government Works. 6 GOOGLE LLC, Appellant, v. THE STATE OF TEXAS, Appellee., Not Reported in S.W....

All Citations

Not Reported in S.W. Rptr., 2025 WL 52611

Footnotes

1 According to appellee, appellant has 250 employees at the Texas data center.

2 In its response to appellant's special appearance, appellee lists all properties owned by appellant as evidence that general jurisdiction applies. Specifically, appellee lists the following:

• 800,000 square feet in the 35-floor Google Tower (Austin)

• The top 10 floors of the 500 West 2nd building (Austin)

• 150,000 square feet across all seven floors of a Saltillo building (Austin)

• 11,000 square feet in the One Buffalo Heights building (Houston)

• At least one office in Dallas, Texas (Dallas)

• A $600 million data center (Midlothian)

• A planned $600 million data center (Red Oak)

• A Google Fiber Kiosk (San Antonio)

• Additional Google offices (Addison)

However, as set out by the United States Supreme Court, we must appraise appellant's contacts in Texas by comparing them with appellant's nationwide and worldwide business. See Daimler AG v. Bauman, 571 U.S. 117, 139 n.20 (2014). And here there is no evidence that appellant's contacts in Texas are the same, equal to, or greater than its worldwide and nationwide contacts as to render Texas its principal place of business.

3 In Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, 365 (2021), the product that the defendant marketed in the forum state caused injury in that state. See id. The Ford court explained that the allegations that the products caused the plaintiffs' injuries in the forum state was related to Ford's activities of selling its products in the forum states and emphasized that the ads in the local media and instate activities possibly caused the plaintiffs to purchase the vehicles. Id. at 367. Thus, the operative facts of the litigation regarding the plaintiff's injuries occurring in the forum states were related to Ford's activities in the forum states. See id. Here, appellee has not alleged that the product itself caused the injury. Instead, appellee asserts that appellant's employees who were not in Texas caused the complained-of injuries while not in Texas. Thus, the operative facts all occurred outside of Texas, and we cannot conclude that under these facts, Ford applies. See id.at 366 (“That is why this Court has used this exact fact pattern (a resident-plaintiff sues a global car company, extensively serving the state market in a vehicle, for an in-state accident) as an illustration—even a paradigm example—of how specific jurisdiction works.” (emphasis added)).

End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.

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Case Contacts

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Lori Mitchell Lori.Mitchell@haynesboone.com 1/16/2025 9:02:24 AM SENT

Robert Farquharson 24100550 rob.farquharson@oag.texas.gov 1/16/2025 9:02:24 AM SENT

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Scott Froman Scott.Froman@oag.texas.gov 1/16/2025 9:02:24 AM SENT

Christopher Molak christopher.molak@oag.texas.gov 1/16/2025 9:02:24 AM SENT

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