MENLO PARK, Calif. (Legal Newsline) – California’s choice-of-law provision was recently used as an argument in a lawsuit between three Illinois residents and Facebook.
The plaintiffs, on behalf of the residents of Illinois, have brought a lawsuit against Facebook, claiming it violated Illinois’ Biometric Information Privacy Act (BIPA) by collecting biometric data to support it tag suggestions without consent.
The tag suggestions uses facial recognition technology to scan images and identify people, who then appear by name in Facebook for other users to recognize. Illinois’ BIPA protects against information collected and disclosed using a biometric identifier without approval.
The case which was transferred from the Northern District of Illinois to the Northern District of California, where Facebook is headquartered, was based on a venue selection clause in Facebook’s user agreement. Here, Facebook moved to have the case dismissed, stating that California’s choice-of-law would rule in the matter, which it said its users agree to in the user agreement.
While the courts first agreed with Facebook, it did ruled that the case should continue as Illinois’ BIPA outweighed California’s choice-of-law provision and if dismissed would provide that the BIPA would be “written out of existence.”
The courts denied Facebook’s motion to dismiss, allowing the case to continue in California.
“Choice-of-law clauses are typically enforced unless the other side can show that the law of the state identified in the clause is contrary to a fundamental policy of the other state and that other state has a materially greater interest in the determination of the suit,” Reena R. Bajowala, partner at Jenner & Block told Legal Newsline.
“It makes sense that California law would apply to Facebook in this dispute – after all, Facebook is a California citizen, the lawsuit is pending in a California court, and the parties assented to the California choice-of-law provision.
“Facebook made this argument – that California law has a superior interest in providing certainty and predictability to technology companies like Facebook. California certainly has an interest in ensuring that technology companies stay in the state, and protecting its corporate citizens from having to comply with the differing and potentially contradictory legal standards of 50 states.
"The court, however, did not agree that these considerations outweighed Illinois’ interest in the litigation.”
The implication of the case moving forward for Facebook and other businesses in California is the possibility for liability under BIPA.
“The most immediate outcome is that the case will move forward in California, with the court applying the Illinois statute and any rulings from Illinois courts, to determine whether the plaintiffs have met their burden of proof in establishing a violation of the Biometric Information Privacy Act,” Bajowala said.
“The indirect outcome of the ruling is that California-based companies will need to expand their focus and monitor developments under the BIPA – and other out-of-forum laws – to evaluate any potential liability.
“We can also expect to see more lawsuits under the BIPA against major national corporations located outside of Illinois. Although not particularly likely, corporations also may look at ways to restrict access to users or customers in states with unfavorable laws to mitigate these risks.”