A woman who wants to sue Facebook over its use of "sponsored stories" can pursue her case in British Columbia, the Supreme Court of Canada ruled Friday.
Deborah Douez wants to file a class-action lawsuit against the social media giant over a now-defunct advertising format, which allegedly used her name and profile photo in ads endorsing a company for which she had pressed the "Like'' button.
The ads were generated for companies that purchased the sponsored stories format and were sometimes displayed on her friends' newsfeeds. Ultimately, the class-action suit intends to seek damages based on a claim that the format violated B.C.'s Privacy Act.
The British Columbia Supreme Court approved her suit, but the provincial Court of Appeal stayed the case, saying it should properly be pursued in California, where Facebook has its head office.
The appeal court said all potential users of Facebook must agree to its terms of use, which include a forum selection and choice-of-law clause requiring that disputes be resolved in California according to California law.
In its 4-3 split decision, however, the Supreme Court found the clause unenforceable.
"Ms. Douez has established strong reasons not to enforce the clause at issue here," the ruling said. "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."
Writing on behalf of the dissenting three justices, Chief Justice Beverley McLachlin and Justice Suzanne Cote said they saw no reason to depart from established international law upholding forum selection clauses.
"We agree with the Court of Appeal of British Columbia that strong cause has not been shown and that the action must be tried in California, as the contract requires," they wrote.
The case now returns to British Columbia for a trial on the merits of the claim.
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