Douez v Facebook gives existing class actions green light to grow under new opt-out rules

In a previous post we unpacked last year’s amendments to BC’s Class Proceedings Act, and discussed the consequences of switching from an “opt-in” regime for non-residents to a more plaintiff-friendly “opt-out” one. Now, Douez v. Facebook, Inc., 2019 BCSC 715 [Douez], illustrates how the transition provisions in the new rules allow ongoing proceedings to dramatically expand in scope.

Douez was brought in 2012, alleging that Facebook violated British Columbians’ privacy rights by using their names and images in an online advertising program without their knowledge or consent. A class of BC residents was certified in 2014.

While the parties sparred to the Supreme Court of Canada over a forum selection clause, the new “opt-out” regime came into effect. Soon after, Ms. Douez applied to expand her claim by adding residents of Manitoba, Saskatchewan, and Newfoundland and Labrador.

Resisting Recertification

Facebook fought certification of the expanded class on three fronts.

First, Facebook argued that residents of other provinces did not have a cause of action because the new claims were barred by limitations statutes of those provinces. Noting that each of three provinces’ limitations statutes incorporated the principle of discoverability, the court rejected the submission that it was “plain and obvious” that the class members’ claims would be statute-barred. The court also referred to Godfrey v. Sony Corporation, 2017 BCCA 302, where the Court of Appeal held that limitation arguments should be considered at certification only in exceptional circumstances.

Next, Facebook argued that individual issues of discoverability arising from its planned limitation defence would overwhelm the common issues and render a class proceeding no longer preferable for the proposed non-resident subclass. This, too, was rejected by the court. The core of the claim in Douez was that Facebook had breached users’ privacy rights by using their names and images without their knowledge, limiting the likelihood of individual claims.

Finally, Facebook argued that Ms. Douez could not serve as an appropriate representative plaintiff for both the existing resident class and the proposed non-resident subclass. Facebook noted that Ms. Douez could have applied to certify the members of the non-resident subclass under the former opt-in regime and argued that her failure to impaired her ability to fairly and adequately represent their interests.

The court rejected this argument: Given the allegation that Facebook users were unaware that their names and images were being used in advertising and that “[i]n these circumstances, an opt-in regime would be virtually futile” (para. 59).

Implications

Douez provides a useful example of how existing class actions can take advantage of the transition provisions in the BC’s Class Proceedings Act to dramatically expand their geographic and legal scope. While there are limits built into the statute to prevent plaintiffs circumventing certification criteria or fundamentally changing their claim, these seem likely to be imposed in a fluid, flexible manner consistent with the plaintiff-friendly purposes of class proceedings.

The arguments against expansion of the class rejected in Douez may yet succeed in another case: where the alleged claim is well-known to members of the proposed non-resident class, judges may demand better answers from class counsel as to (i) the impact of discoverability issues on a class proceeding and (ii) why no effort was made to certify these claims under the previous regime.

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