The Supreme Court of Canada issued its decision today in Douez v. Facebook, Inc., in which the majority, in a split decision, allowed the appeal and held that the forum selection clause should not be enforced. The plaintiff sought certification for a class action against Facebook alleging the company used her name and likeness without consent for the purposes of advertising, contrary to BC’s Privacy Act. A forum selection clause in the terms of use required disputes to be resolved in California under California law.

Also today, the Supreme Court announced it would release its decision next week in Google Inc. v. Equustek Solutions Inc. et al. on extraterritorial injunctions.

In the decision, Douez v. Facebook, Inc. 2017 SCC 33 (link), Karakatsanis, Wagner and Gascon JJ wrote the majority reasons with concurring reasons by Abella J. McLachlin C.J., Moldaver and Côté JJ. dissented. In the lead reasons:

[38] Therefore, we would modify the Pompey strong cause factors in the consumer context. When considering whether it is reasonable and just to enforce an otherwise binding forum selection clause in a consumer contract, courts should take account of all the circumstances of the particular case, including public policy considerations relating to the gross inequality of bargaining power between the parties and the nature of the rights at stake. The burden remains on the party wishing to avoid the clause to establish strong cause.

…

[52] There are generally strong public policy reasons to hold parties to their bargain and it is clear that forum selection clauses are not inherently contrary to public policy. But freedom of contract is not unfettered. A court has discretion under the strong cause test to deny the enforcement of a contract for reasons of public policy in appropriate circumstances. Generally, such limitations fall into two broad categories: those intended to protect a weaker party or those intended to protect “the social, economic, or political policies of the enacting state in the collective interest” (C. Walsh, “The Uses and Abuses of Party Autonomy in International Contracts” (2010), 60 U.N.B.L.J. 12, at p. 15). In this case, both of these categories are implicated. It raises both the reality of unequal bargaining power in consumer contracts of adhesion and the local court’s interest in adjudicating claims involving constitutional or quasi-constitutional rights.