SCC Rejects Facebook’s “Choice of Forum” Clause Argument

In a welcome development for online consumers who are often forced to give up important legal rights in click-wrap license agreements, the Supreme Court of Canada has just issued its decision in Douez v. Facebook Inc. (2017 SCC 33) https://www.canlii.org/…/…/doc/2017/2017scc33/2017scc33.html

In rejecting Facebook’s claim that the forum selection clause in its terms of service preclude hearing a privacy class action lawsuit in B.C. brought by a Facebook user, the court stressed the uneven bargaining power between the parties as well as the importance of privacy rights. . .

“. . . while [the B.C. Privacy Act] does not override forum selection clauses, Ms. Douez has established strong reasons not to enforce the clause at issue here. The grossly uneven bargaining power between the parties and the importance of adjudicating quasi-constitutional privacy rights in the province are reasons of public policy that are compelling, and when considered together, are decisive in this case. In addition, the interests of justice, and the comparative convenience and expense of litigating in California, all support a finding of strong cause in the present case.” (para 4)

The court concluded that

“Ms. Douez provided strong reasons to resist the enforcement of the clause: most importantly, the gross inequality of bargaining power between her and Facebook and the quasi-constitutional privacy rights engaged by her claim. The forum selection clause is unenforceable.” (para 76)

The clause in question, which is quite typical of those appearing in many online terms of service provided:

You will resolve any claim, cause of action or dispute (claim) you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for purpose of litigating all such claims.

Much more analysis to follow . . . .

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