Michael Ford

SCC will have final word in Facebook privacy dispute

Canadians could face an uphill battle to enforce local privacy laws against social media companies if the Supreme Court of Canada upholds a B.C. Court of Appeal decision to halt a class action against Facebook, Toronto privacy lawyer Peter Murphy tells AdvocateDaily.com.

Vancouver-based Deborah Louise Douez launched the action against Facebook back in the summer of 2014, claiming the social media giant's “sponsored stories” feature violated B.C.'s Privacy Act by using her name and profile picture in paid ads shown to her friends for products that she had “Liked” on the website.

The B.C. Supreme Court certified the action, but in June 2015, the B.C. Court of Appeal overturned that decision, siding with Facebook due to a choice of forum clause in the terms of use agreement that provides for all disputes to be settled in Santa Clara County, California. The Supreme Court of Canada will have the final word on the dispute after it recently agreed to hear Douez's appeal.

“It's a very interesting decision, because you see these kinds of forum choice clauses all the time, and I think most people would have thought it doesn't make sense to enforce them when someone brings proceedings under a local statute,” says Murphy, a partner at Shibley Righton LLP. “This is an agreement that users have no power to change or negotiate, so it does potentially have some very significant effects. Users of social media should be aware of these clauses. Social media companies might seek jurisdictions that are more favourable to them, and less favourable to the enforcement of local privacy rights.”

The Court of Appeal decision said that Douez was still free to bring her action in California, but Murphy says the prospect of trying to enforce a provincial statute in a foreign court seems like an “uphill battle for a user.”

“It's going to be costly, time consuming and very inconvenient,” he says.

Douez relied on s. 4 of the B.C. act, which says that any “action under this Act must be heard and determined by the Supreme Court” in B.C., arguing that the provision should override the forum selection clause in Facebook's user agreement. However, the court concluded Douez had failed to meet the test set in case law, which requires “strong cause” for it not to enforce a valid forum selection clause.

In its decision, the appeal court found that the section only applied to exclude other courts in B.C. from hearing matters under the act, and not other courts worldwide.  

“In the absence of evidence to the contrary, I must conclude that Santa Clara courts determine for themselves, using California law, whether they have territorial competence over any given proceeding,” wrote B.C. Chief Justice Robert Bauman on behalf of the unanimous three-judge appeal panel, noting that Douez had the option of hiring an expert on California law to opine on the matter.  

“The problem the plaintiff had in this case was that they relied solely on the working of s. 4, and didn't go further to try to introduce evidence as to why the forum clause should not be enforced,” Murphy says. “But even that in itself would be a time consuming and difficult exercise, given that she is a B.C. resident. The lesson here is that it's not going to be easy to overcome a forum selection clause to bring your action in a Canadian jurisdiction. This is a hurdle you have to overcome, and one that should be taken seriously.”

“You have to be prepared to provide detailed evidence to a court that there is strong cause for a Canadian court to take jurisdiction,” Murphy adds.

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