Facebook's Terms Of Use Does Not Give California Court Jurisdiction Over The Privacy Rights Of British Columbians

All users of Facebook agree to its Terms of Use as part of the registration process. When doing so, users agree to submit to California courts when litigating any claim arising, and that the laws of California will govern. Hence, when Deborah Douez brought a proposed class action alleging that Facebook used her, and potentially 1.8 million other British Columbians', name and picture without consent in contravention of the British Columbia Privacy Act, Facebook responded with a preliminary motion to stay the action.

Last month, a slight majority of the Supreme Court of Canada in Douez v. Facebook, 2017 SCC 33 ruled that the forum selection clause relied upon by Facebook will not be enforced. The Plaintiff Douez will now be able to continue her breach of privacy claim - which has been certified as a class action - in our B.C. Court. Three reasons for judgment were issued, two of which formed the majority of four Justices. The three dissenting Justices would have ousted British Columbia's jurisdiction over the claim, to allow the California court to decide whether, and if so how, to apply the quasi-constitutional privacy rights set out in the British Columbia Privacy Act.

Each of the three reasons applied the same test as set out in ZI Pompey Industrie v. ECU-Line NV, 2003 SCC 27. Pursuant to this test, the defendant seeking the stay must first establish that the clause is enforceable pursuant to contractual law doctrines, such as public policy, duress, fraud, unconscionability, or gross unequal bargaining power. If the clause is found to be enforceable, the onus shifts to the plaintiff to show "strong cause" as to why it should not be enforced. In exercising discretion under the second part of the test, the court is to consider all of the circumstances, including the convenience of the parties, fairness between the parties, and the interest of justice. Public policy can also be an important consideration.

Three Justices forming part of the majority found that the forum selection clause was enforceable under contractual law doctrines, but that the Plaintiff Douez had met her burden of establishing a strong cause not to enforce it. A key public policy reason cited in support of the strong cause was the gross inequity of bargaining power between Facebook and the individual consumer, particularly where "[h]aving the choice to remain 'offline' may not be a real choice in the internet era." Submissions made on behalf of the intervener Canadian...