On June 23, 2017, the Supreme Court of Canada (the “SCC”) reinstated the decision of a chambers judge of the Supreme Court of British Columbia, declining to enforce a forum selection clause and certifying a class action lawsuit against Facebook, Inc. (“Facebook”) for alleged violations of British Columbia’s Privacy Act (the “Act”). Douez v Facebook, Inc (the “Case”), is based on Facebook’s use of the names and pictures of its users in advertising companies and products to other users. The appellant-plaintiff, Deborah Douez, sought to bring a class action against Facebook for alleged breaches of the Act.
The SCC’s decision did not deal with the merits of the case, but rather addressed procedural matters. Facebook brought a preliminary motion to stay the proceeding on the basis of a forum selection clause in its terms and conditions of use. The forum selection clause was intended to make California the forum for all lawsuits against Facebook. The chambers judge declined to enforce the forum selection clause and certified the class action.
The British Columbia Court of Appeal reversed the decision concerning the stay, ruling that the forum selection clause was enforceable and, in the result, finding the certification point moot. The SCC was divided in a 4-3 decision, with Chief Justice McLachlin, and Justices Moldaver and Côté dissenting. The majority applied what is known as the Pompey test, from the decision Z.I. Pompey Industrie v. ECU-Line N.V., to determine if the forum selection clause was enforceable. Where there is a contract between parties, the Pompey test asks whether the party disputing a forum selection clause has strong cause to show that it would be unreasonable to require adherence to the clause. Three of the majority SCC Justices determined that in this case the forum selection clause was not enforceable, as Douez showed strong cause not to enforce the forum selection clause. In particular, these majority Justices held that privacy claims relating to the purported statutory rights of British Columbia residents should be determined in the courts of that province by the application of the laws of that Province. The fourth majority SCC Justice determined that it would be unconscionable to enforce the contractual clause due to the disparity in the bargaining powers of the parties. The effect of the decision is that the litigation will continue in the Supreme Court of British Columbia as a class action proceeding.