[00:00:00] Speaker 01:
Good morning, Your Honors.

[00:00:02] Speaker 01:
Thiago Cole on behalf of the Plaintiff Appellants.

[00:00:05] Speaker 01:
I'm going to try to reserve three minutes of my time for rebuttal.

[00:00:07] Speaker 00:
Counsel, please be reminded that the time shown on the clock is your total time remaining.

[00:00:13] Speaker 01:
Thank you, Your Honor.

[00:00:14] Speaker 01:
All right, thank you.

[00:00:16] Speaker 01:
May I begin?

[00:00:17] Speaker 01:
Yes, please.

[00:00:18] Speaker 01:
The question here, does a foreign company that continuously exploits the California markets for its own commercial gain buy, one,

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requiring California residents to submit their personal identifiable information to them.

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Two, requiring California API keys to access California property.

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Three, requiring California money from its customers on an ongoing basis.

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Four, a company that enters into contracts with California citizens.

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Five, a company that enters into contracts with California companies with servers in California

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with contracts in California.

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Six, a company that receives California money from investors.

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Seven, a company that steps into the shoes of California citizens and execute trades on behalf of California citizens while in California.

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Eight, a California that trades California property, i.e.

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cryptocurrencies, to execute on behalf of California citizens.

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A company that runs softwares in California for California residents.

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Ten, a company that knows those individuals are California residents, either by IP address or billing address.

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And 11, when that company promises to comply with California privacy laws and breaches those very same promises.

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Does that company get away scot-free?

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when he causes harm to California citizens.

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If we could set aside 5, 6, 9, and 11 and focus on the other facts that you identified, which is contacts with California customers.

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So what is the evidence or what are the allegations in the complaint that established that the

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defendant, what was aware that, like, it was dealing with people in California.

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I mean, it knew it was dealing with people, you know, all over the world, but what is the evidence that it was aware that there were customers in California?

[00:02:28] Speaker 01:
Yes, Your Honor.

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So, first of all, when in their own privacy policies and their own terms and conditions they set out

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a number of facts that state that they collect.

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For example, they know that they are California residents through the IP address.

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In fact, I can point your honor to the record 1SER179, and it specifically states that three comas, I'm going to skip a little bit, automatically determined by your IP address of your device and manually provided by you to three comas when entering billing addresses.

[00:03:05] Speaker 01:
If you disagree with this information that was determined automatically, you're obligated to provide us your billing address, given that the software will be used at this location.

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By entering the address data in the software when proceeding with the payment, and by sending us value proof of this residential address afterwards.

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Your Honor, the allegations in the complaint also include, obviously, that they paid for a plan.

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That payment itself would require either the

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the IP address should be inserted and provided to them automatically, as well as the payment that is sometimes requiring the billing address itself.

[00:03:41] Speaker 02:
So, because the IP address, as I understand it, is some indication of location, but people can use VPNs, and it doesn't necessarily tell you really where the, doesn't reliably tell you where the people are, but what you're saying is that they asked

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all of the customers for a physical billing address?

[00:04:02] Speaker 01:
Not necessarily, Your Honor.

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If you disagreed on providing some forms of payment, you would have to provide specifically your billing address.

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But just addressing the IP address issue that you just flagged as well, this was also addressed by the Briskin versus Shopify.

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In Briskin and Shopify, they claimed that the IP address could potentially narrow to that California area.

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While it is true some consumers may be

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using a VPN, we have to understand that some other consumers may not be using a VPN, and then they would have knowledge that they're targeting that market just as it was in Shopify as well, where IP address was one of the ways that they could tell.

[00:04:41] Speaker 01:
But that's not all.

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Drawing your attention to... Counsel, before we leave page 179, SCR, point me to the precise language

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on that page that you say would identify someone as a California resident?

[00:04:56] Speaker 01:
Yeah, it should be.

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I can pull it up exactly and show you exactly where it is.

[00:05:00] Speaker 00:
No, because I don't see that it's that term that you're referencing.

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But the language itself should, from my recollection, starts from the very top.

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I know that there is a little pop-up, so to speak.

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Well, but you've pointed us to 1SER 179.

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I'm just asking you.

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What the specific language on that page is that you say identify the customer as a California resident?

[00:05:30] Speaker 01:
You mean where it shows IP address location is determined automatically?

[00:05:34] Speaker 00:
Well, I thought you said when Judge Miller asked you the question about what in the record establishes

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that the company knew these were California residents.

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You pointed us to 1SER 179, correct?

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I can show you right now.

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So if you go to section F, I know it's a little small.

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Yes.

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The second sentence, actually.

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It says three commas.

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The fourth line should start by, that is automatically determined by IP address of your device.

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Do you see that?

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I see that.

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But does that mean then that the company is aware

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that it's a California IP address?

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To me, there's a gap between saying that and actually collecting the information and knowing that it's a California resident.

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Well, Your Honor, the IP address can show the California address.

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It may or it may not show it.

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So I'm asking you, how do you bridge that between asking for that information and actually the company

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gathering that information to know that it's dealing with a California resident?

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I understand, Your Honor.

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So I'm going to parse out, and let's ignore the IP address just for now.

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I think we can understand that there's a possibility that it could identify California residents, but let's ignore that.

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Let's look at just the billing address.

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The billing address, of course, would show California residents, right?

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But that's not all.

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There is a lot more.

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And I want to draw the Court's attention to 2ER 249.

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And in 249, it specifically states the categories of personal information we collect.

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This is three comments.

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And it states the first and last name, email address, phone number, two-step authentication key, social media account information, including your Facebook, financial information such as billing and mailing address, exchange account username.

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API key, API secret, IP address, unique device identifiers, geographical data, such as city of your location identified by your IP address.

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What page is that?

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This is true ER 249.

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And it starts at the, after the section that says personal information that we collect, use, and disclose.

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And that's part of the California privacy right disclosure.

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Yes.

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And does three commas have any other privacy rights disclosure for any other state, or is it just California?

[00:08:12] Speaker 01:
It's only California, Your Honor, and I think that's a crucial point as well, because if you was truly not thinking that it was dealing with California residents and instead was dealing with other people, maybe you wouldn't have focused so much on California.

[00:08:27] Speaker 04:
Let me ask this.

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I think somewhere one of your allegations was that Three Commons also targeted California investors.

[00:08:36] Speaker 04:
That's right.

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How so?

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Well, Your Honor, we found articles that they had acquired money from California investors.

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And so is there anything more to that than that?

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Is it your view that the targeting of California investors would give them knowledge that they were dealing with investors from California, or is that unclear?

[00:08:58] Speaker 01:
I don't think it's dispositive on that issue, Your Honor.

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I think that when we're analyzing the jurisdictional analysis, what would be dispositive would be the conduct.

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and as well as the claim itself, whether it arises out or relates of the actual claim.

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And I think that California investors does rise to the level that they know that they have money coming in from California investors for this business, but you would potentially run into a little bit of a problem if you just

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if you're looking at vacuum only as to that allegation because the claim arises out of or relates to the actual service itself.

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But I don't think that the court needs to actually go too much into that because in this case, they not only service California residents as we just discussed, they knew of California residents either through billing address or the other type of information.

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So it's not random or attenuated.

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This is a class action, obviously, but you have a number of named plaintiffs from California.

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Did you allege that they had provided a California billing address?

[00:10:08] Speaker 01:
Your Honor, so it is important to... That's a good question, because I think it's slightly confusing with the declarations.

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In the declarations, they talk about the free plan, but the class is defined as only those who paid for three commas, so there's no free plan for those individuals, right?

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They're the ones that paid for the plan.

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So that's a distinguishing fact as to, let's say, someone who never paid and never gave the billing address, or they can be somehow identified by the IP address.

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We're still dealing just with the individuals that actually paid value and money for that transaction.

[00:10:42] Speaker 02:
OK, but for the plaintiffs, the specific named plaintiffs from California who paid, did you?

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They're all paid customers.

[00:10:51] Speaker 02:
Yeah, but did you allege that

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in paying that they provided a California address?

[00:10:57] Speaker 01:
Your Honor, I think we just stated that they paid for the plan.

[00:11:01] Speaker 01:
I don't believe that we actually spelled out that the billing address was including the payment itself, but that's certainly something that we could amend and include if it's required.

[00:11:11] Speaker 00:
Counsel, you also said that cryptocurrency is California property.

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What are the allegations in the complaint that support that statement?

[00:11:20] Speaker 01:
Your Honor, I think that's a legal application of the Ninth Circuit precedent.

[00:11:25] Speaker 01:
I believe Reman actually addresses that as well, which is that cryptocurrency is considered to be California intangible property in California.

[00:11:36] Speaker 04:
What about the forum selection clause with CloudFlare and you're making a type of a stopple argument, which I'm not sure I'm persuaded by, but at least is there something to the fact that if Three Commons has entered into a contract with a California-based company that has a choice of law provision for California and forum selection clause, how does that help or does it do anything to this overall claim?

[00:12:05] Speaker 01:
Yeah, so ignoring the equitable stop-off for now, I'm just focusing on personal jurisdictional analysis.

[00:12:11] Speaker 01:
The fact that they entered into contracts with a California server, the fact that they had agreed to potentially respond to California laws with that contract, it does go into potentially the express aiming requirement because they are having contacts

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and conduct of potentially agreeing to be in that state.

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Just like the privacy policy potentially would also be one of the factors that we would look at.

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I mean, they're express aiming vis-a-vis a company.

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Why would that necessarily mean that they're wanting to allow themselves to be brought to suit by non-parties?

[00:12:49] Speaker 01:
Well, they agree to that in the contract, right?

[00:12:52] Speaker 01:
That's one thing, but that's... And I'm not trying to just... Only with CloudFlare.

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Correct.

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But regardless, they do agree that in some instances, it would not be unfair for them to be potentially in California, responding to a lawsuit by CloudFair.

[00:13:06] Speaker 01:
Fine.

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But either way, it shows another conduct that is directed at the market, just like the investors are, just like... And I do want to just briefly just point out one important fact.

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The service itself that's provided by Tricomas, it's important to understand what they do.

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When you sign up for three commons, the service that you're getting is that this bot, a software that is automatically programmed to follow some form of algorithm, it will step into your shoes.

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So, for example, let's take Judge Miller.

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Judge Miller is an account that has the California account name, billing address, potential social security, drive license, and his property that is being traded

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on his behalf with his name on a daily basis using this bot.

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So the idea of connection to the forum and contacting the forum and interacting with the forum, that is certainly being done by the trades itself as well.

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And that is how Three Comas was contracted to provide a service to California residents and when torts arise out of or relate to that transaction, then it should be understood

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that they have availed themselves to the forum.

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And I think that's a very important fact because that is the actual service that they provide.

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So just like in Keaton where they were providing magazines to every state, they want people from every state, they intend to have people from every state, they have people from every state.

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For the record, I am neither a California resident nor a crypto investor for the record that's taking but he could use VPN so who knows I'm going to reserve the best of my time for a couple of minutes

[00:15:08] Speaker 03:
Good morning, may it please the court, Daniel Rocky for Three Commas Technologies OU.

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So Three Commas is a private limited company that was formed under the laws of Estonia.

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It has its only, its headquarters and its only operations in Estonia.

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It develops software for algorithmic trading of cryptocurrency.

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And consistent with the decentralized nature of the cryptocurrency industry, it has users dispersed across the globe.

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And because of that, and because it has, it's a relatively small company, it has limited resources, it has deliberately organized its business affairs.

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to prevent precisely what it's being faced with here, which is being dragged into court more than 5,000 miles away from its home base in Estonia.

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Now, it does this in a number of ways, but principally two of them.

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It limits the reach of its promotional and marketing activities.

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It does not market in the US.

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It does not market in California.

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And it does that on purpose so that, you know, it will not be hailed into court in California or Timbuktu or South America because of the nature of its business.

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It has to have some predictability.

[00:16:40] Speaker 04:
Mr. Rocky, can I ask, does your position become harder since the brisket versus Shopify decision?

[00:16:48] Speaker 04:
It just seems, as council was explaining, the nature of all these different contacts, maybe individually they may not be that much, but collectively they start to seem not random and fortuitous, but just different ways of reaching out to the California jurisdiction.

[00:17:05] Speaker 03:
Thank you for the question.

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I will concede that when the decision came out two days before our brief was due, my heart skipped a beat, and I thought maybe it would impact it, but in fact, it doesn't impact it at all.

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First of all, brisken involved in intentional tort, and so the framework there was purposeful direction.

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But our case law has recognized in numerous places that we can look at purposeful direction or purposeful availment.

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We look at it holistically.

[00:17:35] Speaker 03:
Correct.

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But I think that's important because it's an intentional tort versus what is alleged here, which is negligence.

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If you look at their claims, there's negligence and all the claims sound in negligence.

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The allegation is that three commas failed to enact reasonable security measures.

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So there was no intentional act causing an impact within California.

[00:17:58] Speaker 00:
Council, do you agree with opposing council that as a matter of law, cryptocurrency is California property?

[00:18:07] Speaker 03:
That's not an issue that's been briefed, and I haven't looked at that issue, and I don't think it's relevant here.

[00:18:14] Speaker 00:
Well, if I think it's relevant, what do you think about that statement that cryptocurrency is, as a matter of law, California property, which would mean that your company is dealing in California property?

[00:18:29] Speaker 00:
So what's your position on that?

[00:18:32] Speaker 03:
Well, I think you would have to, I'm not aware of what authority he's citing for that.

[00:18:40] Speaker 03:
But I would say as a general matter, if that's the case, then it would depend on where the cryptocurrency is being stored.

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You'd have to look at where the exchange is that the currency is being stored.

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And just as a general matter, I would take issue with that because the whole purpose of the cryptocurrency industry is that it's decentralized, it's largely anonymous,

[00:19:02] Speaker 03:
So I would take issue with that proposition, but again, I don't know what authority he's citing for that.

[00:19:09] Speaker 02:
I don't think this is in the complaint in its current form or at least not very clearly, but suppose they were to amend the complaint and you had allegations that the named plaintiffs provided a billing address in California and some further allegations that

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you know, some number of, you know, other members of the class did the same.

[00:19:32] Speaker 02:
Would that be sufficient?

[00:19:34] Speaker 03:
I don't think it would be, but I think... And why not?

[00:19:37] Speaker 03:
We, yeah, first of all, we can look at the record to see what information it actually collects.

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So, appellants appointed to the privacy policy, which like most privacy policies, was designed to cover any possibility, right, any data that they might collect.

[00:19:54] Speaker 03:
It does not mean that they actually collected it either in this instance or in any instance.

[00:20:02] Speaker 03:
But if you look to the declaration of... Can I stop you with it?

[00:20:06] Speaker 04:
I mean, the website says personal information we collect.

[00:20:12] Speaker 04:
It's not saying that we may collect.

[00:20:14] Speaker 04:
It's saying that we collect, use, and disclose.

[00:20:18] Speaker 03:
Correct, Your Honor.

[00:20:19] Speaker 03:
But if you look at... So there actually is testimony on this.

[00:20:22] Speaker 03:
And if you look to the declaration of Anna Gansens, the chief legal officer, she explained that in fact three commas does not collect personal information from its users.

[00:20:35] Speaker 03:
The only thing it requires is a working email address and some form of payment mechanism.

[00:20:43] Speaker 03:
There's nothing in the record to suggest that in order to provide a payment mechanism, you have to provide

[00:20:49] Speaker 03:
your complete address.

[00:20:51] Speaker 03:
Certainly, we're all familiar with the fact that you may have to provide a zip code.

[00:20:56] Speaker 03:
But that's the only information that three commas requires.

[00:21:00] Speaker 03:
Now, you can sign up through your Facebook account or a Google account.

[00:21:04] Speaker 03:
And so there might be some information that theoretically would be accessible through that.

[00:21:09] Speaker 03:
But as a general matter, it requires only an email address and a payment mechanism.

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And the consequence of that is, in most cases,

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Three commas doesn't even know the actual identity of its users.

[00:21:23] Speaker 03:
And it doesn't much care.

[00:21:25] Speaker 02:
But I'm still not sure you've answered the question.

[00:21:30] Speaker 02:
If they could allege that some non-trivial fraction of the plaintiffs provided a zip code which does identify the state,

[00:21:42] Speaker 02:
Why wouldn't that be enough to show purposeful availment of entering into relationships with people that you know are in California?

[00:21:51] Speaker 03:
Right.

[00:21:52] Speaker 03:
So it wouldn't matter at all because Three Commas has done nothing deliberately to solicit that business, right?

[00:21:59] Speaker 03:
It's undisputed in the record that Three Commas did not target any marketing to California or even to the U.S.

[00:22:07] Speaker 03:
generally, that it was Appellants who reached out to Three Commas in Estonia

[00:22:12] Speaker 03:
created an account.

[00:22:14] Speaker 03:
In the absence of evidence, some purposeful deliberate action by three commas to cultivate business in California, the fact that some users found three commas in Estonia and created accounts

[00:22:30] Speaker 03:
is insufficient to establish.

[00:22:33] Speaker 02:
And here's where maybe, well, you can tell me what you think about brisken.

[00:22:38] Speaker 02:
I mean, I take the point that brisken is an intentional tort case.

[00:22:40] Speaker 02:
But nonetheless, it seems to reject the idea that you need to be doing something specially focused on the jurisdiction.

[00:22:55] Speaker 02:
Correct.

[00:22:55] Speaker 02:
So if you're dealing with people everywhere, but you know that, like,

[00:22:59] Speaker 02:
Here is somebody signing up, and they're giving me a zip code that identifies them as a California resident, and I am nonetheless choosing to provide the service to them.

[00:23:12] Speaker 02:
Why isn't that insufficient?

[00:23:13] Speaker 03:
Well, because I think we have to look at the facts in Briskin, right?

[00:23:17] Speaker 03:
So the facts there and the allegations, I think Shopify conceded this, was that they knew at the time when they surreptitiously downloaded

[00:23:29] Speaker 03:
software onto Briskin's browser that he was located in California.

[00:23:34] Speaker 03:
So even though Briskin represented sort of a sea change in terms of getting rid of differential targeting, it still affirms that there must be purposeful action aimed at the forum.

[00:23:49] Speaker 03:
In that case, it was Shopify knew that Briskin was in California.

[00:23:55] Speaker 03:
It intentionally downloaded

[00:23:59] Speaker 03:
files onto his browser secretly, and then it extracted data from his computer.

[00:24:05] Speaker 03:
And in fact, if you step back, it's really just a straightforward application of purposeful direction analysis.

[00:24:12] Speaker 03:
And in fact, the court actually analogized to a real world situation, like an intruder entering California to break into somebody's house to remove files.

[00:24:23] Speaker 03:
That's a very different situation from what we have here, where three commons

[00:24:27] Speaker 03:
Three commas has done nothing to solicit business in California.

[00:24:30] Speaker 03:
There's nothing in the record to show that three commas knew or even cared where the appellants were located, whether it was California, US, Great Britain, could have been anywhere.

[00:24:44] Speaker 04:
What if the company knows that cryptocurrency is a very California-centric type industry, like the entertainment industry,

[00:24:53] Speaker 04:
And it's contracted with CloudFlare, a California-based company, and has the Forum Selection Clause, choice of law provisions.

[00:25:02] Speaker 04:
Aren't all those purposeful in terms of reaching into the Forum and trying to get the benefits of California law and protection?

[00:25:09] Speaker 03:
I don't think so.

[00:25:10] Speaker 03:
I mean, first of all, I don't think it's fair, and there's certainly nothing in the record to say that cryptocurrency is unique to California.

[00:25:15] Speaker 03:
It's a worldwide phenomenon.

[00:25:18] Speaker 03:
In fact, most of the major exchanges are based in Hong Kong or elsewhere.

[00:25:22] Speaker 03:
So I think as a factual matter, that's not actually accurate.

[00:25:26] Speaker 03:
Secondly, if that were the case, then any company in the cryptocurrency industry would be able to be hailed into court, regardless of whether they have arranged their affairs to not even sell to people in California, for example.

[00:25:40] Speaker 03:
And as I started out here, I think it's really important to note that one of the ways that Three Commas attempted to obtain predictability

[00:25:50] Speaker 03:
and to prevent being dragged into court thousands of miles away is that before you can access its service, this is every user, you have to affirmatively agree to its terms of use.

[00:26:01] Speaker 03:
And those terms of use have a forum selection clause requiring all disputes to be resolved in Estonia under Estonian law.

[00:26:10] Speaker 03:
And so the appellants here, and there's a declaration in the record establishing it,

[00:26:14] Speaker 03:
with screenshots of what they saw, exactly the terms that they agreed to.

[00:26:20] Speaker 00:
And they expressly agreed.

[00:26:21] Speaker 00:
Counsel, let me ask you this.

[00:26:23] Speaker 00:
Isn't the overarching inquiry whether or not it would be constitutionally fair to have this company held H-A-L-H-D into court in California?

[00:26:35] Speaker 00:
Isn't that really what we're trying to determine as a matter of constitutional due process?

[00:26:40] Speaker 03:
Absolutely, Your Honor.

[00:26:41] Speaker 00:
So the difficulty I'm having is,

[00:26:44] Speaker 00:
If this company has voluntarily agreed to be hailed into California court, at least with one company, why would it be constitutionally unfair to require them to come to California for a different company?

[00:27:00] Speaker 00:
That's kind of a disconnect for me.

[00:27:02] Speaker 03:
Yeah, good question, Your Honor.

[00:27:04] Speaker 03:
So fairness and due process looks at sort of predictability, right?

[00:27:08] Speaker 03:
Is it foreseeable that you might be hailed into court thousands of miles away?

[00:27:12] Speaker 03:
Now, the fact that three commas

[00:27:14] Speaker 03:
utilize the services of CloudFlare for services totally unrelated to the client?

[00:27:20] Speaker 00:
Not only use the services, but agreed that any disputes could be resolved in California, which is kind of an indication that California is a forum that it has allowed itself to be held into.

[00:27:33] Speaker 03:
Well, so first of all, I think we need to step back.

[00:27:35] Speaker 03:
So California is obviously the home to many technology companies.

[00:27:39] Speaker 03:
So under that theory, all three billion users of Facebook

[00:27:43] Speaker 03:
could be hailed into court for any reason whatsoever.

[00:27:46] Speaker 00:
No, because they've specifically agreed in the contract put to California.

[00:27:51] Speaker 00:
Well, right.

[00:27:51] Speaker 03:
Facebook users agreed to Metta's terms of use, which have a form selection clause in California, right?

[00:27:56] Speaker 00:
So that's a case for another day.

[00:27:58] Speaker 00:
We're talking about this case today and this contract.

[00:28:01] Speaker 00:
Right.

[00:28:01] Speaker 03:
So Three Commas agreed that if there's a dispute with Cloudflare, then it could be subject to jurisdiction in California.

[00:28:09] Speaker 03:
But there are many cases, in fact, Boscato v. Hansen,

[00:28:13] Speaker 03:
They all say that that alone, so agreement or consenting to jurisdiction as to one set of disputes, as to one party, is not an all-purpose consent to jurisdiction for all purposes or for any comers, right?

[00:28:29] Speaker 00:
If that were the case... This is a little bit related, though.

[00:28:31] Speaker 00:
I mean, I see your argument if this, you know, a contract

[00:28:36] Speaker 00:
to move with a moving company, and then you have a contract to build a restaurant.

[00:28:41] Speaker 00:
Those are two different things.

[00:28:43] Speaker 00:
But these are all related, don't you think?

[00:28:46] Speaker 03:
No, I don't, Your Honor.

[00:28:47] Speaker 03:
So it's in the record, but three commas retains CloudFair, like thousands, perhaps tens of thousands of companies around the world, to provide three discrete services.

[00:28:59] Speaker 03:
One of them is DNS lookup.

[00:29:01] Speaker 03:
All that does is translate, like, the words URL into an IP address so that it can find the site.

[00:29:08] Speaker 03:
It uses bot detection services, which is like the reCAPTCHA we all know prove that you're not a computer.

[00:29:15] Speaker 03:
And then it has CDN services, which, as Anna Janssens explains in her declaration, all that does is allow it to take advantage of Cloudflare's network of servers all around the world.

[00:29:28] Speaker 00:
So it in no way facilitates the services that are provided to the plaintiffs in this case?

[00:29:35] Speaker 03:
Well, it facilitates it only in the sense that it's part of a website service, right?

[00:29:42] Speaker 03:
And they access the software through the service.

[00:29:44] Speaker 03:
But it has nothing to do with the claims.

[00:29:46] Speaker 03:
has nothing to do with any of the alleged acts here, which all occurred in Estonia.

[00:29:52] Speaker 04:
Can I ask about the CDN piece of this?

[00:29:55] Speaker 04:
CDN, I think, denial of services, is that what that is?

[00:29:58] Speaker 04:
It's a security measure of a sort?

[00:30:00] Speaker 03:
That's the bot detection services.

[00:30:02] Speaker 04:
Okay.

[00:30:02] Speaker 04:
And plaintiff's allegations are, I believe, that three commas was not protective enough against a hacker attack or some sort of penetration into the system in order to have, you know, unauthorized trades.

[00:30:20] Speaker 04:
Why isn't there a connection between using CloudFlare for some type of security protection measure and plaintiff's claims?

[00:30:26] Speaker 03:
Because as we explained in our briefing and I believe in the declaration,

[00:30:30] Speaker 03:
Bot detection services are targeted at an entirely different issue.

[00:30:34] Speaker 03:
That's attempting to prevent distributed denial of service attacks, which are attacks that shut down your website.

[00:30:41] Speaker 03:
They're not attacks that extract data, cause a data breach.

[00:30:45] Speaker 03:
It's just the act of using thousands of computers at one time to flood the website with requests and then cause it to shut down.

[00:30:54] Speaker 04:
And that has nothing to do with hacking, and so you think they're totally dissimilar?

[00:30:57] Speaker 03:
It has nothing to do with hacking at all, Your Honor.

[00:30:59] Speaker ?:
OK.

[00:31:00] Speaker 03:
So in closing, I would just say that if three commas can be hailed into court here, then really there's no way that any company anywhere in the world that could prevent itself from being hailed into could organize its affairs in a way that it's not going to be hailed into court thousands of miles away to defend suits.

[00:31:19] Speaker 03:
The appellants here expressly agreed that they would resolve any disputes with three commas in Estonia under Estonian law.

[00:31:28] Speaker 03:
And three commas, there's nothing in the record to show that threes commas in any way expressly aimed any of its conduct at California.

[00:31:39] Speaker 00:
Thank you, counsel.

[00:31:40] Speaker 03:
Thank you.

[00:31:41] Speaker 00:
Let's have two minutes for rebuttal.

[00:31:48] Speaker 01:
Your honor, I appreciate those three minutes.

[00:31:52] Speaker 01:
My colleague just now mentioned that a cryptocurrency potentially would be property wherever it's being stored.

[00:31:58] Speaker 01:
That is not true.

[00:31:59] Speaker 01:
You have to pay taxes for cryptocurrency.

[00:32:02] Speaker 01:
The law has changed over the last 10 years, where it is found to be intangible property by someone who has a legal right to that property.

[00:32:12] Speaker 01:
So just as much as if you're driving a vehicle and you go to New York for the weekend, it doesn't make it automatically that that vehicle is now a New York property.

[00:32:21] Speaker 01:
That is your California resident who purchased a vehicle in California.

[00:32:25] Speaker 01:
Therefore, it's your property in California.

[00:32:28] Speaker 01:
And if Your Honors want a one-paragraph supplemental briefing with only case law that shows this under the Ninth Circuit, I'm happy to provide that as well.

[00:32:35] Speaker 00:
What was the case that you cited for the proposition that cryptocurrency is as a matter of law California property?

[00:32:41] Speaker 01:
Your Honor, I cited to Bremen, but I don't have the full site because he wasn't briefed.

[00:32:46] Speaker 00:
Well, that's the point.

[00:32:48] Speaker 00:
I was going to ask you, did you put this in your brief?

[00:32:50] Speaker 00:
So if you didn't put this in your brief, is it fair for us to consider it now?

[00:32:55] Speaker 01:
Well, Your Honor, I think it's fair for you to know that we did say cryptocurrency, and as a matter of law, if Your Honor looks, cryptocurrency is California property, or it is property, intangible property, that is legally recognized by California laws, as well as in the Ninth Circuit.

[00:33:11] Speaker 01:
And then, just briefly, counsel mentioned that brisking doesn't really affect the analysis,

[00:33:18] Speaker 01:
Briskin overruled differential targeting.

[00:33:20] Speaker 01:
If we were under differential targeting, you would potentially see that they were not differentially targeting California, because they are a nationwide or global wide website.

[00:33:31] Speaker 01:
However, just like, for example, horrible brands, it was selling products on Amazon.

[00:33:38] Speaker 01:
And Amazon went and shipped the product to a specific forum.

[00:33:42] Speaker 01:
That was enough for the context.

[00:33:44] Speaker 01:
He also mentioned that there is no intentionality alleged in the complaint.

[00:33:47] Speaker 01:
That is not true.

[00:33:48] Speaker 01:
We mentioned throughout the complaint several times that they intentionally violated and reckless disregarded plaintiffs' and class members' rights.

[00:33:56] Speaker 01:
They knew and should have known that he had not implemented reasonable security standards.

[00:34:00] Speaker 01:
So intentionality and intentional acts were actually alleged.

[00:34:03] Speaker 01:
Finally, for CloudFair.

[00:34:04] Speaker 01:
Sorry, I'm speeding up.

[00:34:05] Speaker 01:
Finally, for CloudFair, we do allege that CloudFair was actually the one transmitting information.

[00:34:10] Speaker 01:
There is screenshots throughout the complaint starting on paragraph 22

[00:34:13] Speaker 01:
paragraph 37 or so, that that information, the API keys, the private information, is actually unencrypted.

[00:34:19] Speaker 01:
So anyone could potentially grab that transmission and breach or hack the individuals.

[00:34:26] Speaker 01:
They claim they have nothing to do with that.

[00:34:27] Speaker 01:
They don't know how the hack happened.

[00:34:29] Speaker 01:
They have no idea.

[00:34:30] Speaker 01:
At the end of the day, for example, Mr. Freeman put his life savings into that account.

[00:34:36] Speaker 01:
And that life savings was taken and stolen because

[00:34:40] Speaker 01:
three commas decided to not do their due diligence.

[00:34:43] Speaker 01:
And in response, they say you cannot sue us anywhere in the United States because there is no specific jurisdiction or general jurisdiction anywhere.

[00:34:53] Speaker 01:
Your Honor, I don't believe that fair play and substantial justice means that.

[00:34:58] Speaker 01:
They are okay taking California people's money.

[00:35:00] Speaker 01:
They're okay taking California investors.

[00:35:02] Speaker 01:
They're okay saying and marketing to the global world that they follow California laws.

[00:35:06] Speaker 01:
They are just not okay with a California lawsuit.

[00:35:08] Speaker 00:
Counsel, what's your response to opposing counsel's emphasis on the fact that they all signed the, as part of the user agreements, they agreed to resolve any disputes in Estonia?

[00:35:19] Speaker 01:
Your Honor, that would be, that's not something that's up in the Ninth Circuit, a dispute right now.

[00:35:25] Speaker 01:
It would be a foreign non-convenience argument.

[00:35:26] Speaker 01:
But B.S.

[00:35:28] Speaker 01:
Brehman and his progeny is the one that deals with that argument.

[00:35:31] Speaker 01:
I think that this record would be capable of following the Ninth Circuit directive on how to analyze that fact.

[00:35:37] Speaker 01:
And the spoiler is that typically California views those clauses as unenforceable because there is a strong California privacy interest in California, especially when you breach California laws.

[00:35:50] Speaker 01:
And the last point that I just want to make, during our arguments for Briskin, one of the questions asked by Judge Friedland was, what if this company just took the information they just misused or they were hacked?

[00:36:01] Speaker 01:
Would that not be enough for personal jurisdiction?

[00:36:04] Speaker 01:
And I'll leave that to your honors, I believe it is.

[00:36:05] Speaker 00:
All right.

[00:36:06] Speaker 00:
Thank you, counsel.

[00:36:06] Speaker 01:
Thank you.

[00:36:07] Speaker 00:
Thank you to both counsel for your helpful arguments.

[00:36:09] Speaker 00:
The case just argued is submitted for decision by the court.