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Comment by dpifke | Hacker News Reader

The "online retailer" (IABMFG) in this case is based in California.

A company in California, selling to a customer in California, shouldn't be able to say "California law doesn't apply because my payment processor is Canadian." And if Shopify wants to take a cut of every sale from retailers based in California, they should be willing to comply with California law as well, at least insofar as it applies to the services provided via those California-based retailers' web sites.

(The actual opinion is linked at the bottom of the submission; I humbly suggest folks commenting here should read it first: https://cdn.ca9.uscourts.gov/datastore/opinions/2025/04/21/2...)

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To be clear, this isn't a choice-of-law case. It's not about whether California law applies. It's about whether a court in California has jurisdiction; that is, whether it can hear the case at all.

That seems like a meaningless distinction. If you can't have a case heard by a state court, then that state's laws can't be applied, by definition.

That is not true. State courts can apply foreign state laws, and federal courts can apply any state’s laws.

Sort of yes, sort of no.

For example, imagine an American tourist visiting the UK drives dangerously and kills a motorcyclist, then escapes to the US before being caught.

A UK criminal court can order jail and a driving ban, but has no way to enforce the sentence unless the tourist decides to return to the UK, or the US decides to extradite.

A US criminal court can't do anything, the crime took place outside of their jurisdiction.

The victim's family can sue the tourist in a US civil court, and that court can take UK law into account - but can basically only impose a cash settlement that gets paid out of the tourist's insurance. They don't actually lose a cent.

So in a sense one state's courts can apply foreign state laws. But in terms of results, i.e. days spent in jail, laws don't appear to apply across borders.

In American law, a "foreign state" is a term of art meaning another U.S. state or territory. It does not mean a foreign nation like the UK. International law is a whole other ball of wax, as you suggest.

Again that seems needlessly pedantic. Has there ever been a case where a court applied a law from a regime where that regime's own courts lack jurisdiction? Again, in practice "laws apply" and "courts have jurisdiction" are isomorphic states. Complaining about an article making the very reasonable conflation seems nitpicky and silly.

The article didn’t make that conflation at all. The author, a former professor of mine in law school, knows what he’s talking about (as do I). It was the commenter who was confused (as are you).

Jurisdiction has nothing to do with whether laws are applicable to a case. It has to do with whether a particular court can hear a case. Personal jurisdiction questions go back hundreds of years to resolve issues like “is it just to force a defendant to travel hundreds of miles by horse and carriage to defend himself?” versus allowing him to defend himself closer to home.

If the plaintiff sued Shopify in New York, this issue wouldn't have come up at all. (And, yes, a New York court can apply California law.)

This stuff is all covered in first-year civil procedure in law school.

I don't know how it is within the US but in Europe this is a common occurrence. Contracts with choice of law, international succession procedures, civil liabilities... even arbitration.

It also isn't against the Californian company. It was Shopify which is not a Californian company.

Seems bizarre to me that several lower courts ruled in favor of Shopify though..

Shopify on behalf of a california company

Could a tort claim under California state law be heard in any other court (assuming no accompanying Federal claims)?

Yes. Choice-of-law terms are frequently found in contracts. When interpreting the law, the court with jurisdiction will do its best to refer to and interpret existing law of the state in question to the case.

(I deleted my original reply, which was maybe conflating several different arguments. I'll try to restate my point more succinctly. IANAL, so it's quite possible I'm misunderstanding the legal issues at play.)

The linked opinion's discussion of jurisdiction seems to be about whether the case can be heard in any court, not if there's an alternate venue that would be more proper. FWIW, the retailer's web site[0] does not seem to contain a terms of service or anything with a choice-of-law provision. If the argument is that no court has jurisdiction in which the plaintiff can seek redress, that seems equivalent to saying that the law doesn't apply to the defendants.

Shopify already exercises a huge amount of discretion as to which businesses it's willing to provide services for, and how much it charges them. It does not seem unreasonable to me that the company would either a) be willing to answer to California courts, or b) stop selling its services to California retailers.

[0]: https://www.iambecoming.com/pages/who-we-are

There is definitely one state, which is New York (where its U.S. HQ is). Another is possibly Delaware in which its U.S. entity is incorporated.

That’s why the author said that when the court stated that it would be absurd if there were no state that had jurisdiction, the court was being misleading, because there is always at least one state in which a U.S. entity is subject to jurisdiction.

> And if Shopify wants to take a cut of every sale from retailers based in California, they should be willing to comply with California law as well,

For the moment, for purpose of consumer protections, fine. But on longer time scales, I'm not sure. Does it really make sense for legacy states to be able to bind transacations on the internet? Doesn't that just make it a very large intranet?

Obviously information refuses to be stopped by borders. Are we going to have a situation where states of various sizes try to claim jurisdiction, but only those with sufficiently violent tendencies (and thus the ability to achieve compliance by fear) succeed? Won't that corrupt the internet even worse than an absence of state-based consumer protections?

If two people who live 500 miles apart in the area currently claimed by the State of California, but do not recognize the State of California, and regard themselves as citizens of the internet, and, who is right, them, of the government of California?

Most of us will probably say that there is some social contract by which, for better or worse, the State of California is right.

But what if, in 100 years, California goes bankrupt. Does that change the calculus? If so, why? And does it change retroactively, for the purposes of historical classification of internet transactions? The diplomatic and economic affairs of state don't change the operation of internet protocols. It's hard to even fully imagine how to create an internet whose shapes are coterminous with the boundaries asserted by various states.

I'm broadly skeptical of any judicial rulings which extend the laws of the legacy states onto the internet, even if they appear to be on the side of short-term justice. This whole thing is starting to feel like a bandaid better ripped off quickly.

> Does it really make sense for legacy states to be able to bind transacations on the internet?

Yes.

We have a problem right now where the only place democracy, sensible laws and due process take place is in meatspace.

The internet - insomuch as it’s a real place, is a feudal society. It’s made up of small fiefdoms (websites) and some larger kingdoms which exert tyrannical power within their borders. They watch everything you do - usually to advertise to you. And they can banish you at a moments notice if doing so would result more profit for their rulers.

There’s an interesting argument you can make that the internet should be its own sovereign space. “Information wants to be free” and all that. Maybe if the internet was created 200 years ago, during the period of time when constitutions were being written everywhere, we would have created one for the internet. And then, maybe, the internet could have policies and courts and rules that uphold the rights of people. But that hasn’t happened. We have, through our collective inaction, delegated judicial oversight of the internet to sovereign states in meatspace. And thank goodness. Somebody needs to tell internet companies that my personal data is not for sale. Or tell Apple that they aren’t entitled to 15-30% of Netflix’s revenue after already selling a user their phone. (And don’t they dare redirect users to their website!)

If us technologists won’t govern ourselves, we delegate that important job to the state of California. To the European Union. To Australia’s department of fair trade & ACCC. And so on. It means we get a fractured Internet. But people have inalienable rights that need to be defended. Those rights must not be undermined just because we’re online and there’s a profit to be made.

Laws are also the most effective tool for destroying rights, arguably much more so than protecting them.

So the flip side of your position that someone needs to be subject to a foreign law when dealing with a foreign party because otherwise that parties right might be stommped is that they also need the means to block interactions with that foreign party so their own rights aren't potentially stomped.

In the case where there are sales you might actually know where the other parties reside, but in the majority of interactions online you don't and there is no great means to control your exposure to other jurisdictions.

they also need the means to block interactions with that foreign party so their own rights aren't potentially stomped

Yes. That's the point. If you choose to do business with someone you also accept the jurisdiction of their local courts and laws. If you don't want that risk then do business locally.

This exposure however isn't limited just to 'business'. When you make comments online or publish open source code you're also potentially exposing yourself to other jurisdictions and their laws.

> Does it really make sense for legacy states to be able to bind transacations on the internet?

Sites like paypal and escrow.com need licenses for every state in the US to carry on business (Mostly called money transmission licenses, but there are a few other names and regulations depending on the state). Yes, it is just as big a compliance nightmare as you'd expect.

So yes, it does happen.

And anyway, as this case shows, if you have customers in a state you need to follow the laws of that state. This is why Pornhub have stopped servicing various states.

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