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Thursday, 05 June 2014 12:17

Privacy Class Action Against Facebook Certified by BC Court

Written by  Teresa Scassa
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The British Columbia Supreme Court has certified a class action law suit against Facebook for breach of privacy rights protected under B.C.’s Privacy Act. In doing so, it dismissed Facebook’s application to have the court decline jurisdiction to hear the case.

The claim in Douez v. Facebook, Inc. relates to Facebook’s Sponsored Stories “product”. Sponsored Stories permits paid advertisers to use the names and likenesses of users of Facebook, alongside information about their product and service and their trademarks. The resulting “Sponsored Stories” are then sent to the contacts of the person featured in the ‘story’. The court found that between September 9, 2012 and March 10, 2013, 1.8 million B.C. residents were featured in Sponsored Stories. Individual Facebook users are given no notice of the fact that they are featured in a Sponsored Story. The class Plaintiff Douez argued that the use of the names and images of herself and other Facebook users from B.C. violated s. 3(2) of the Privacy Act, which provides:

3. (2) It is a tort, actionable without proof of damage, for a person to use the name or portrait of another for the purpose of advertising or promoting the sale of, or other trading in, property or services, unless that other, or a person entitled to consent on his or her behalf, consents to the use for that purpose.

Facebook argued that all of its users must accept its terms of use and privacy policy in order to use the site. In this way, it obtains the express consent of users to have their names and images used in Sponsored Stories. It also put forward a secondary argument regarding implied consent.

The focus of Facebook’s application to have the Plaintiff’s certification application dismissed was an argument based upon the lack of jurisdiction of the B.C. Supreme Court over the matter. Facebook argued that its Terms of Use, to which all users must consent, contains a forum selection clause that provides that disputes will be heard by the courts of California. Justice Griffin of the B.C. Supreme Court noted that the choice of jurisdiction clause was found near the end of exceeding long terms of use, making it relatively obscure. She distinguished an earlier Ontario case, Rudder v. Microsoft Corp which upheld a choice of jurisdiction clause in an online consumer contract on the basis that the claim in that case was one of breach of contract. The plaintiffs in Rudder therefore relied on the terms of the contract on the one hand, and claimed not to be bound on the other. She also distinguished the more recent BC Supreme Court decision in Century 21 Canada Ltd. Partnership v. Rogers Communications Inc., which also held that the parties were bound by online terms of use, on the basis that both were “sophisticated commercial parties who employ similar terms of use themselves and who had conceded the reasonableness of the terms of use at issue.” (at para 45).

Justice Griffin found that the plaintiff had shown strong cause for the court not to enforce the forum selection clause. She noted that the B.C. Privacy Act gave exclusive jurisdiction over claims arising under that Act to the B.C. Supreme Court. As a result, a California court could not have jurisdiction over such a claim. She took note as well of the “cultural differences in the ways various jurisdictions think of a right to privacy”, suggesting that a court in California might not interpret the right of privacy in the Privacy Act in a manner consistent with Canadian approaches to privacy. She concluded that “the availability of a statute-based claim in the court’s own jurisdiction, which confers exclusive jurisdiction on that court, can on its own be a basis for overriding a forum selection clause, but also can support two other “strong causes” for not enforcing a forum selection clause, namely, juridical advantage and public policy.” (at para 93). According to Justice Griffin, a court in California would have no jurisdiction over a Privacy Act claim, such that enforcing the forum selection clause would rob the plaintiff of her recourse. Further, she found that the protection of privacy was a matter of important public policy. She also noted that “with the creation and growth of the internet the potential implications for a loss of privacy are greater than ever. The difficulty in proving quantifiable damage remains great for an individual whose privacy is lost, but the social harm can be monumental if the loss of privacy includes publicity over the internet with its almost infinite reach and timelessness.” (at para 104). In addition to these reasons for not enforcing the forum selection clause, Justice Griffin found that it would cause much less hardship overall for Facebook to defend itself in B.C. than for the plaintiff and her witnesses to travel to California to plead their case.

Justice Griffin also certified the class proceeding. The relevant class is:

All British Columbia Resident natural persons who are or have been Members of Facebook at any time in the period from January 1, 2011, to May 30, 2014 and:

(a) who at any time during this period registered with Facebook using either their real name or a portrait that contained an identifiable self-image or both;

(b) whose name, portrait, or both have been used by Facebook in a Sponsored Story; and,

(c) who do not seek to prove individual loss as a result.

It is clear that a central issue in the law suit will be whether users consented, via Facebook’s Terms of Use to their names or images in Sponsored Stories.

Note that a similar class action law suit in the United States related to Facebook’s Sponsored Stories resulted in a $20 million settlement agreement in 2013.

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