A Texas appeals court has determined that the state does not have the jurisdiction to sue Google over allegations of deceptive business practices.
The Thirteenth District Court of Appeals in Corpus Christi issued a unanimous decision on Thursday, stating that Texas cannot proceed with its lawsuit against Google, Inc. The state had filed the suit under the Texas Deceptive Trade Practices Act, accusing the tech giant of misleading Texas users about the tracking of their location data and search history.
The court concluded that conducting business in Texas does not automatically establish jurisdiction over a company for legal disputes.
“[Google]’s contacts with Texas are insufficient to conclude, under guiding precedent, that the company is ‘essentially at home’ in Texas,” the court wrote in its decision.
Chief Justice Jaime Tijerina emphasized that the issues raised in the lawsuit largely pertained to actions taken outside of Texas. The court noted that the employees responsible for the alleged misleading statements were not based in Texas, and the evidence presented was tied to activities occurring outside the state.
“The small percentage of business Google performs in Texas, as alleged by the state, does not meet the standard for substantial, continuous, and systematic contacts. Even if it did, the United States Supreme Court has rejected such criteria as the basis for analyzing general jurisdiction,” Tijerina stated.
Background on the Case
In 2022, the Texas Attorney General’s Office filed a lawsuit accusing Google of deceptive practices regarding user privacy. The state alleged that Google misled Texans about how their location and search data were tracked, even when location settings were disabled or when users activated incognito mode.
The lawsuit further claimed that Google used this data to generate significant revenue, with approximately 8.9% of the company’s U.S. earnings attributed to Texas. The Attorney General’s Office argued that Google had reaped “spectacular gains at the expense of Texans’ privacy,” potentially earning hundreds of millions in ad revenue from the state.
Google’s Response and Jurisdictional Findings
In its defense, Google argued that its operations in Texas represent a small fraction of its national and global business. The company employs approximately 2,400 permanent staff in Texas, a number that rises to around 5,500 when including temporary and contract workers. By contrast, Google employs roughly 58,500 individuals in California and 169,000 worldwide.
The appeals court agreed, highlighting that the company’s limited operations in Texas do not satisfy the legal threshold for establishing general jurisdiction. It found that interactions with Texas users were conducted by employees based outside the state, further undermining the claim of jurisdiction.
The ruling marks a significant setback for Texas as it seeks to hold technology companies accountable for alleged violations of state consumer protection laws.