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Facebook Immune From Class Actions in Quebec?
Apr 27 2011

Can you launch a class action against Facebook in Quebec? Apparently not. The Superior Court of Quebec just released its decision in St-Arnaud v. Facebook Inc., a judgment that could cause major waves in the world of class action and consumer protection law.

On July 6, 2010, Patrice St-Arnaud filed a motion to authorize the bringing of a class action against Facebook. The petitioner, a casual Facebook user, presented the motion on behalf of all persons in Quebec who were allegedly wronged by Facebook with respect to the use of their personal information.

The facts of the case are relatively simple. The petitioner signed up to Facebook and submitted various items of personal information during the sign-up procedure. The personal information made publicly available included his name and the "networks" he belonged to. In November 2009, however, Facebook changed the privacy settings without consulting users, meaning previously confidential information became public.

The petitioner was of the opinion that these changes were made without proper and informed consent, in breach of Facebook's contractual obligation and applicable legislation regarding the protection of personal information.

Facebook opposed the motion to authorize the bringing of a class action on the grounds that Quebec courts lacked jurisdiction to hear the case. According to Facebook, Mr. St-Arnaud and all Facebook users are bound by the website's terms of use, which contain a jurisdiction clause providing that all disputes between the user and Facebook are to be heard before the courts of California.

The Decision of the Superior Court
The Superior Court of Quebec (Deziel J.) agreed with Facebook. The Court concluded that all Facebook users were bound by Facebook's terms of use for four reasons: (1) they indicated that they read the terms when they signed up for Facebook (2) they could follow a hyperlink to those terms (3) the hyperlink is available on all Facebook web pages (4) users are always either logged in to Facebook or are redirected to a login page which contains a hyperlink to the terms.

Relying on the reasoning of the Supreme Court in Dell Computer Corp. v. Union des consommateurs, the Court also held that the jurisdiction clause was not an "external clause" but an integral part of the contract such that Facebook users are bound to submit any claim to Californian courts.

Normally, Quebec's Consumer Protection Act and Civil Code would have led to a different result since they forbid contractual clauses from forcing consumers to submit to the jurisdiction of either arbitration tribunals or foreign courts. Significantly, however, the Court held that the contract between Facebook and its users was not a consumer contract because use of Facebook is entirely free. The Court concluded that in order to attract the protection granted to consumers under Quebec law, there must be some consideration paid.

This case raises the important issue of whether companies that provide services free of charge must respect the stringent requirements of the Quebec Consumer Protection Act. Neither the Civil Code nor the Consumer Protection Act expressly restrict consumer contracts to onerous contracts. Given the potential impact of this decision, it will be interesting to see whether or not this case will be appealed.