Texas has no jurisdiction over Google in deceptive practice suit, court says

A Texas appeals court on Thursday ruled that the state of Texas lacks the jurisdiction to sue Google over deceptive business practices.

What we know:

The Thirteenth District Court of Appeals in Corpus Christi ruled the state of Texas lacked the jurisdiction to bring the lawsuit against Google, Inc.

The state sued under the Texas Deceptive Trade Practices Act, claiming the tech giant lied to users in Texas about their locations and search history were tracked without their knowledge.

The unanimous decision of the court determined that just because a company does business in Texas does not mean that the state has jurisdiction over legal issues.

“Thus, we are not persuaded that [Google]’s contacts with Texas are sufficient to find under guiding precedent that appellant is ‘essentially at home’ in Texas,” the court said.

The court also said that the issues brought by the state were largely conducted outside the state and the employees who “directed the alleged misleading statements” were not in Texas and would require evidence to be directed at events outside the state.

“The small percentage of business that appellant performs in Texas as alleged by appellee does not even amount to substantial, continuous, and systematic contacts, but even if it does, the United States Supreme Court has disavowed that rubric as the proper measure of analyzing general jurisdiction,” Chief Justice Jaime Tijerina said.

The backstory:

In 2022, the state sued Google, claiming the company misled and lied to its Texas users over how and why their behavior was tracked and using that information to make money.

Specifically, Texas accused Google of lying to users by collecting location data and search history when location settings were turned off and when using incognito mode.

The state claimed users were deceived by Google and that the tech company used the data it collected to profit further. They claimed 8.9% of Google’s revenue in the United States came from Texas.

Google, the Texas Office of the Attorney General said, “reaped spectacular gains at the expense of Texans’ privacy”, suggesting Google had made hundreds of millions of dollars in ad revenue from Texas.

In determining jurisdiction, the appeals court said evidence suggested contact with Texas users came from Google employees who were not in the state.

Google argued that its Texas operations “represent a small fraction of its operations across the country and across the world.”

The company has around 2,400 permanent employees in Texas. When temporary and contract employees are added, the company says that number climbs to around 5,500.

Google employs around 58,500 people in California and about 169,000 worldwide.