Advertisers Bear Burden of Proving Individuals’ Consent to Appear in Ads, BC Court Rules – Also Holds that Legislatures Cannot Restrict Actions on Provincial Legislation to Their Own Courts | Stickman Elliott LLP

In Douez v. Facebook, Inc., 2022 BCSC 914the Supreme Court of British Columbia (the “Court”) held that Facebook used class members’ names and images in its “Sponsored Stories” advertising program without their consent, contrary to four provincial privacy statutes (British Columbia, Saskatchewan, Manitoba, and Newfoundland and Labrador). In doing this, the Court took a position that is to Ontario authority that states that contrary to a conferral of subject matter matter to a particular court means that all other courts, including superior courts of other provinces, do not have jurisdiction over that subject matter.


Facebook’s Sponsored Stories

From January 2011 to May 30, 2014, Facebook offered an advertising program called “Sponsored Stories”, whereby advertisers could pay Facebook to associate the advertiser’s name or identifiable mark with a Facebook user who performed certain social actions in connection with the advertiser (ie, liking the advertiser’s Facebook profile or other content). Facebook’s software would attach a banner to the social action such as “Sponsored”, as well as the advertiser’s thumbnail icon, and increase the likelihood that the user’s friends would see the now “Sponsored” social action on their news feeds. Facebook did not display the Sponsored Story on the user’s home page and did not inform a user when their name and image were used to create a Sponsored Story.

The Class Proceeding

In 2012, Ms. Douez brought a proposed class action in BC on behalf of Facebook users alleging that Sponsored Stories violated section 3(2) of the BC Privacy Actwhich states:

It is a tort, actionable without proof of damage, for a person to use the name or portrait of another for the purpose of advertising or promoting the sale of, or other trading in, property or services, unless that other, or a person entitled to consent on his or her behalf, consents to the use for that purpose.

As a threshold matter, Facebook argued that the BC courts should decline jurisdiction because the terms of use agreed to by the plaintiff contained a forum selection clause in favor of California. The Court refused to decline jurisdiction and proceeded to certify the action in 2014.

Facebook appealed to the BC Court of Appeal, which held that the forum selection clause was enforceable and did not consider the challenge to the certification of the common issues. The plaintiff appealed to the Supreme Court of Canada, which in 2017, held that the forum selection clause was unenforceable.

The matter returned to the BC Court of Appeal for consideration of Facebook’s challenge to the certification order. The BC Court of Appeal upheld the certification decision, and in 2019, the case management judge granted the plaintiff’s application to amend the claim to include residents of Saskatchewan, Manitoba, and Newfoundland and Labrador.

The plaintiff applied for summary trial of the common issues that were certified by the Court in 2014 (and amended in 2019). Facebook opposed the motion and argued that:

  • the Court lacked jurisdiction to determine the privacy claims under Manitoba’s and Newfoundland and Labrador’s privacy statutes; and
  • the matter is not suitable for determination by way of summary trial.

The Jurisdictional Challenge

The Court held that it did not lack jurisdiction to determine the privacy claims under Manitoba’s and Newfoundland and Labrador’s privacy statutes.

Facebook had argued that the Court could not adjudicate the claims under the Manitoba and Newfoundland and Labrador legislation as those statutes granted exclusive jurisdiction to their respective provincial superior courts. In making this argument, Facebook drew on a line of Ontario cases that have held that when a provincial legislature confers jurisdiction over a particular subject to a particular court, other courts, including those in other provinces, do not have jurisdiction over that subject matter.

The Court rejected Facebook’s argument and found that provincial superior courts have the power to adjudicate disputes arising under statutes of other jurisdictions, including other provinces. Relying on constitutional principles, the Court noted that the legislatures of Manitoba and Newfoundland and Labrador cannot legislate extraterritorially, and thus lack the competence to prohibit the Court from adjudicating claims under their respective privacy statutes.

Ultimately, the Court held that it has ajudicative competence to determine the claims under the Manitoba and Newfoundland and Labrador privacy acts, and whether it should do so in this case is a question to be decided through a forum non conveniens analysis (ie, whether there is another more appropriate forum in which to hear the dispute). As Facebook did not raise a forum non conveniens objection, the Court held that it could not decline to exercise its jurisdiction over the extra-provincial statutory claims.

Liability for Breach of Privacy Legislation

The Court held that the liability common issues (ie, whether users expressly or impliedly consented to their name or portrait being used in Sponsored Stories) in this case are amendable to summary resolution. The Court did not find damages issues suitable for summary determination and deferred them for determination by conventional trial.

Express or Implied User Consent

The Court began its analysis by examining who bears the burden of proving consent. Upon examining all four provincial privacy statutes in issue, the Court concluded that a defendant is best suited to prove consent as a defence. While the plaintiff must establish a prima facie case for breach of the relevant legislation, the Court noted that this threshold is low and Ms. Douez’s affidavit evidence that she did not consent satisfies the low threshold for a prima facie case and Facebook bears the burden of proving consent.

The Court found that a reasonable reader would interpret Facebook’s terms of use as providing users with the ability to control whether their name and profile picture could be used by advertisers. Yet, as the evidence established that a user could not control the use of their information, the Court ruled that Facebook had not obtained express consent as required by the provincial legislation.

Facebook argued that its practices were consistent with the terms of use that provided that Facebook would not “give” a user’s content or information to advertisers without their consent. Specifically, Facebook argued it did not transfer the individual names and profiles pictures of users who became the subject of Sponsored Stories, and advertisers could not “review or store or process this information in any way”. However, the Court held that Facebook’s interpretation of “give” was unrealistically narrow and unreasonable as Sponsored Stories “gave” advertisers the means to add their image to a user’s social action, add the “sponsored” banner and “hitch their brand” to user information.

The Court found that unless and until a user learned that they had been featured in a Sponsored Story, and about the ineffectiveness of privacy settings to prevent them being featured in other Sponsored Stories, the evidence did not support an inference of implied consent.

Key Take-Aways

  • This decision departs from a line of Ontario cases regarding the issue of the scope of the provincial superior courts’ jurisdiction to deal with statutory privacy claims pursuant to the legislation of a different province. This may cause uncertainty in national class actions brought outside the provinces that enacted these statutes and class counsel will want to keep an eye on any guidance offered by the higher courts.
  • The onus rests with the defendant to prove it obtained consent to use a person’s name and image in under these provincial statutes. While the plaintiff must establish a prima facie case for breach of the relevant legislation, this threshold is low and may be easily satisfied.

The right to privacy requires consent to be sought, not presumed. It is important that privacy policies and terms of use make it clear how and when user information may be used for advertising and promotional purposes.

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