Supreme Court of Canada Rules Hearing Against Facebook May Proceed in British Columbia Contrary to TOU Contract - Douez v. Facebook

June 29, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Deborah Louise Douez v. Facebook, Inc.

Supreme Court of Canada Rules Hearing Against Facebook May Proceed in British Columbia Contrary to TOU Contract - Douez v. Facebook

SUPREME COURT OF CANADA

On appeal from: British Columbia

Privacy Act and Terms of Use Agreement – Pompey Test

Majority Opinion: Does the Act apply and in that case shall the case be heard in BC; Do the Terms of Use apply in which case the case is heard in California; Privacy Act applies and case must be heard in BC; It is clear from the evidence that there was gross inequality of bargaining power between the parties; Individual consumers in this context are faced with little choice but to accept Facebook’s terms of use; the forum selection clause is unenforceable under the first step of the Pompey test applying contractual principles; Both elements required for the doctrine of unconscionability to apply — inequality of bargaining power and unfairness — are met in this case.

Dissenting Per McLachlin C.J. and Moldaver and Côté JJ.: When parties agree to a jurisdiction for the resolution of disputes, courts will give effect to that agreement, unless the claimant establishes strong cause for not doing so. In this case, D has not shown strong cause for not enforcing the forum selection clause to which she agreed. Therefore, the action must be tried in California, as the contract requires, and a stay of the underlying claim should be entered. With respect to the first step of the Pompey test, Facebook has discharged the burden of establishing that the forum selection clause is enforceable and applies in the circumstances: it is established that an enforceable contract may be formed by clicking an appropriately designated online icon; the contract on its face is clear and there is no inconsistency between a commitment to strive to apply local laws and an agreement that disputes will be tried in California; and finally, s. 4 of the Privacy Act grants the Supreme Court of British Columbia subject matter jurisdiction over Privacy Act claims to the exclusion of other British Columbia courts but nothing in the language of s. 4 suggests that it can render an otherwise valid contractual term unenforceable.

Forum selection clauses, far from being unconscionable or contrary to public policy, are supported by strong policy considerations. They serve an important role of increasing certainty and predictability in transactions that take place across borders. And, the fact that a contract is in standard form does not affect the validity of such a clause.

Judgment rendered: June 23, 2017

Heard Before: Judges McLachlin, Abella,  Moldaver, Wagner,  Karakatsanis, Andromache, Gascon, and  Côté
Coram: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon and Côté JJ.
Joint Reasons: Karakatsanis, Wagner and Gascon JJ.
Reasons Concurring in the Result: Abella J.
Joint Dissenting Reasons: McLachlin C.J. and Côté J. (Moldaver J. concurring)

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