As the first hearing in the US class action lawsuit regarding Coupang's massive personal information leak was held on the 1st local time, the issue of court jurisdiction has emerged as the central debate.

While Coupang has highlighted its identity as a "US-based company" in lobbying activities targeting US politics and government circles, it focused heavily in court on arguing that the New York court lacks jurisdiction because the incident occurred on a "Korean platform."

During the initial preliminary hearing held by the US District Court for the Eastern District of New York that afternoon, the plaintiffs and the defendant sparred over whether it is appropriate for the court to hear the case.

A preliminary hearing is a session where a judge calls in both parties to organize issues and establish a trial schedule before formal proceedings begin.

Judge Ann M. Donnelly, who is presiding over the case, repeatedly questioned throughout the hearing why the case should be handled in the Eastern District of New York and why it was brought to her court instead of South Korean courts.

Previously, South Korean law firm Daeyoon and its US partner law firm SJKP, representing Coupang customers, filed a class action lawsuit seeking 5 million dollars, or approximately 6.8 billion won, in damages against Coupang's corporate entity and Chairman Kim Bom-suk, alleging that Coupang violated its obligations for personal data protection and duty of care.

Two Coupang customers residing within the jurisdiction of the Eastern District of New York were named as representative plaintiffs, and approximately 7,800 victims have expressed their intention to join so far.

Attorneys from Kirkland & Ellis, the major US law firm retained to represent Coupang, argued for dismissal, claiming that filing a class action against the US parent company Coupang, Inc. over an event that occurred in South Korea is a matter of improper jurisdiction.

Their stance is that Coupang, Inc. is a holding company established in the US state of Delaware, while Coupang Korea is merely a subsidiary and a separate legal entity.

Referring to the South Korean Coupang entity, Coupang's attorneys argued, "It is an e-commerce platform operating in South Korea for South Koreans," adding that "conducting a trial here is a waste of time and resources."

This contrasts with Coupang's lobbying efforts targeting US political and government circles, where it emphasized job creation and export expansion in the US, and with concerns raised by some members of the US Congress that Coupang is a US company facing discrimination from the South Korean government. In court, however, the company pointed to its status as a "Korean platform" to request the dismissal of the lawsuit.

Coupang's attorneys also mentioned that multiple South Korean agencies are already conducting investigations related to the incident, arguing that the plaintiffs are attempting to choose a favorable trial forum and applicable law.

In response, South Korean law firm Daeyoon and US partner law firm SJKP, representing the Coupang users, countered that there are no jurisdictional issues, pointing out that Coupang, Inc. is a US corporation listed on the New York Stock Exchange and that the leadership of the parent company influences the South Korean subsidiary.

They also presented the fact that Coupang, Inc. reported its subsidiary's personal data leak to the US Securities and Exchange Commission (SEC) as grounds supporting the legitimacy of jurisdiction.

However, Judge Donnelly spent a significant amount of time repeatedly verifying the connection between the Eastern District Court of New York and Coupang's data leak incident, as well as the plaintiffs' places of residence, expressing skepticism on multiple occasions.

Judge Donnelly requested additional written submissions by the 6th of next month and is expected to determine whether to proceed with further trials thereafter.

At the preliminary press conference, Daeyoon stated, "We will do our best to ensure that 33.7 million South Korean consumers can protect their rights regardless of borders."

In November of last year, Coupang announced that the names, contact information, delivery addresses, and apartment shared-entrance passwords of 33.7 million users had been leaked.

Because punitive damages systems are applied in the US, attention has focused on whether this lawsuit could hold Coupang to much heavier legal responsibilities than it would face domestically.

However, if the jurisdictional hurdle is not cleared, the lawsuit could be concluded without any judgment on whether the company fulfilled its duty of care.

(Photo: Yonhap News)