Court of Appeal Decision of the Week

Class Actions: Court of Appeal a Facebook “Friend”?

Case: Douez v. Facebook, Inc., 2018 BCCA 186 (CanLII)

Keywords: Facebook; Class Action; s. 3(2) of the Privacy Act, RSBC 1996, c 373

Synopsis:

Beginning in 2011, the Appellant (Facebook, Inc.) introduces a new form of advertising referred to as a “sponsored story”. Sponsored stories are advertisements displayed on a member’s news feed accompanied by a statement that a member’s “friends”, as represented by their name and profile picture, “like” particular products, services or entities.

Facebook, Inc. does not provide remuneration to members, or specifically advise them of the use of their endorsement through sponsored story advertisement. The Respondents – members not remunerated for their “sponsored story” endorsements – contend that Facebook, Inc. does not have their consent to publish and that the practice constitutes a tort as per s. 3(2) of the B.C. Privacy Act

The Chambers Judge certifies the claim as a class proceeding after amending the class definition and restating the common issues. Facebook, Inc. appeals the certification. The Court of Appeal dismisses Facebook Inc.’s appeal, but modifies the class definition to the following:

All British Columbia resident natural persons who were Members of Facebook at any time in the period from January 1, 2011, to May 30, 2014, and:

(a) who at any time during this period were registered with Facebook using their real name, or had a profile picture that included an identifiable self-image, or both; and

(b) whose real name, identifiable portrait, or both were used by Facebook in a Sponsored Story.

Importance:

Class certification is an important exercise in litigation strategy. This case provides an opportunity to review a range of potential issues with a certification judgment and get a snapshot of the process. Facebook Inc. appealed on the following four grounds:

  1. the Chambers Judge went beyond the appropriate role of a Certification Judge in revising the class definition and the common issues;
  2. the revised class definition created by the Chambers Judge is unworkable;
  3. the Chambers Judge erred in certifying as common issues matters that require individual inquiry, and do not meaningfully advance the action; and
  4. the Chambers Judge erred in finding that a class action is the preferable procedure. (See para. 43).

Issue One: What’s the Judge’s Role?

With respect to the role of the Certification Judge, the Court of Appeal found that, while the modifications were “more substantial than are normally put forward by the bench”, the Judge did not act “improperly”. (See para. 51).

Citing authorities from Alberta (Andriuk v. Merrill Lynch Canada Inc., 2013 ABQB 422 (CanLII), aff’d 2014 ABCA 177 (CanLII)), British Columbia (Lee v. Transamerica Life Canada, 2017 BCSC 843 (CanLII)), and Ontario (Kumar v. Mutual Life Assurance Company of Canada (2003), 2003 CanLII 48334 (ON CA)), the Court of Appeal accepted there are limits to the role a certification judge should play in re-formulating the class definition.

That being said, it was “undeniable” that a chambers judge is entitled to modify the class definition in some ways. (See paras. 44-47). The Court determined the Chambers Judge was both entitled to make minor modifications and, specifically did not depart from her appropriate role.

Issue Two: An Unworkable Definition?

The Chambers Judge certified the class definition as follows:

All British Columbia Resident natural persons who are or have been Members of Facebook at any time in the period from January 1, 2011, to May 30, 2014 and:

(a) who at any time during this period registered with Facebook using either their real name or a portrait that contained an identifiable self-image or both;

(b) whose name, portrait, or both have been used by Facebook in a Sponsored Story; and,

(c) who do not seek to prove individual loss as a result. (See para. 56).

Facebook submitted this definition was vague, overbroad, and that item (c) in particular contained subjective elements. (See para. 57). With respect to “subjectivity”, the Court agreed item (c) was inappropriate because “It depends on the subjective intentions of potential class members, and is not objectively verifiable”. As such, it was contrary to objectivity requirements stated at para. 38 of Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 SCR 534, 2001 SCC 46 (CanLII). (See paras. 73-75).

The Court of Appeal corrected this defect by striking clause (c) from the class definition and remitting certification to the B.C.S.C. in order to “…make an appropriate order to ensure that potential class members are properly notified of the action and given an opportunity to exercise their opt-out rights if they wish to do so.” (See para. 81).

Issue Three: Are Issues Related to Individual Consent & Damages Appropriate?

The Court of Appeal found no error with regard to the Chambers Judge’s certification of common issues dealing with members’ consent to the use of their image and name on the sponsored stories and damages. For the Court of Appeal, addressing such issues could “…resolve the litigation, and will almost certainly move the claim toward resolution.” (See para. 85).

Issue Four: Preferable Procedure

Citing Jiang v. Peoples Trust Company, 2017 BCCA 119 (CanLII) at paras. 37–38, the Court determined that, since “preferable procedure” involves the exercise of the Chambers Judge’s discretion, the decision is subject to a deferential standard of review: “where the judge has made a palpable and overriding error of fact, or has made an error of principle.” (See para. 89). As such, with respect to the preferable procedure requirement and s. 4(2) of the Class Proceedings Act, RSBC 1996, c 50, the Court of Appeal found the Chambers Judge made no error. (See para. 91). She was entitled to find that class proceedings were preferable.

Counsel for the Appellant: Tristram Mallett and David Rankin (Osler, Hoskin & Harcourt LLP, Calgary & Toronto)

Counsel for the Respondent: Luciana Brasil and Christopher Rhone (Branch MacMaster LLP, Vancouver)

Discuss on CanLii Connects

 

Posted: Wednesday, May 16, 2018