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March 16, 2012
Facebook's "Browsewrap" Enforced Against Kids--EKD v. Facebook
By Eric Goldman
This opinion reaches two interesting conclusions. First, it says children-users can't disaffirm Facebook's terms of service (TOS) so long as they keep using the site. Second, it says the children-users are bound to Facebook's TOS even though the court thinks it's a browsewrap. Neither ruling is unprecedented, but both rulings represent a very favorable bounce for Facebook. Yet, for reasons I'll address in a moment, I'm not 100% clear why Facebook wanted this outcome.
Background. This is one of at least three publicity rights lawsuits brought over Facebook's Sponsored Stories. EKD was filed in the Southern District of Illinois. The other two I know of are JN v. Facebook (in EDNY) and Fraley v. Facebook (in N.D. Cal.). JN and EKD both involved children-users of Facebook as plaintiffs. The JN case was voluntarily dismissed last August. A related case, Cohen v. Facebook, related to Facebook's use of users' names/photos in Facebook's "friend finder" service. In October, Facebook won the Cohen case for lack of cognizable injury. In contrast, in December, in Fraley v. Facebook, the plaintiffs made substantial headway by surviving Facebook's motion to dismiss on Article III, 47 USC 230 and other grounds. [An update on the Fraley case: the court granted Fraley's request to drop out of the case. See 2012 U.S. Dist. LEXIS 34477 (N.D. Cal. March 13, 2012)].
In the EKD/Dawes case, Facebook sought to transfer the venue from S.D. Ill. to N.D. Cal. To do so, it needed the court to uphold the venue selection clause in its user agreement/TOS.
Disaffirmance. The court first addresses whether kids can be bound by Facebook's TOS under any circumstance due to the infancy doctrine, which says contracts with kids are generally voidable by the kids. The court says that kids can't have it both ways--either the contract applies in total or they must disaffirm it in total. Here, the kids haven't disaffirmed it totally because:
Plaintiffs have used and continue to use facebook.com. The Court concludes that Plaintiffs cannot disaffirm the forum-selection clause in Facebook’s TOS, although Plaintiffs were minors when they entered the agreement containing the clause.
This brings to mind the uncited AV v. iParadigms case, the leading kids-and-online-contract case to date. That case involved the plagiarism detection service Turnitin, whose contract with students purportedly let Turnitin retain copies of kids' papers in its database for future precedent checks. The court there said that the kids had received the "benefit" of Turnitin's service (i.e., it had already completed the plagiarism detection on their papers), so there was no way for kids subsequently to unwind the contract completely.
The EKD case differs because the court leaves open the possibility that the kids could void the contract by deleting their Facebook accounts. At the same time, deleting the account wouldn't help these particular plaintiffs because then Facebook would stop showing their names and photos in Sponsored Stories. It remains to be seen if other minor plaintiffs can take advantage of the hole this case doesn't address.
FWIW, kids and online contracts is a hot topic in the academic literature. See, e.g., From the Mouths of Babes: Protecting Child Authors from Themselves by Julie Cromer Young and CyberInfants by Cheryl Preston. I believe Farnaz Alemi has a forthcoming paper on the topic too. The authors of these papers can rest easy about any possible preemption from the opinion; I can't imagine this opinion resolves the issue dispositively.
Binding Nature of the TOS. Having established that the kids are capable of being bound to the Facebook TOS, the court then turns to whether the plaintiffs in fact assented to the TOS. The judge really makes a hash here. The court makes the unqualified statement that "Facebook’s TOS, including the forum-selection clause at issue, are contained in a so-called 'browsewrap agreement.'" This is just an unmitigated misunderstanding of what constitutes a browsewrap, reminding us of the intractable semantic ambiguity of that phrase. See the effectively identical error made in the uncited Fteja v. Facebook ruling from a couple months ago. Indeed, the court proves it knows that Facebook's TOS isn't a browsewrap. Later, the opinion says "persons wishing to join facebook.com must attest that they have read Facebook’s TOS, which are made available through a hyperlink." JUDGES: PLEASE PLEASE PLEASE RETIRE THE PHRASE BROWSEWRAP PERMANENTLY. It's not helping your analysis one bit.
Having made the factual error of calling the TOS a browsewrap, the judge makes a doctrinal error to cover up the factual error by concluding that browsewraps are enforceable. UGH. The court says "the validity of a browsewrap contract hinges on whether the website provided reasonable notice of the terms of the contract," which Facebook did by presenting the TOS as a clickthrough (the language quoted above) and because the TOS is linked in Facebook's footer on every page. Whether or not the users actually read the TOS becomes irrelevant because they had constructive notice.
After it determined the agreement is enforceable, the court says the venue selection clause is reasonable. Get this: the court then chides the plaintiffs for bitching about the venue selection clause's reasonableness because the "time for Plaintiffs to have considered whether the forum-selection clause in Facebook’s TOS would terribly disadvantage them was when they agreed to the TOS."
WHAT? First, the plaintiffs are minors, so by definition they lack legal sophistication to understand and then negotiate a standard form contract with a company that basically never replies to individual emails. Second, the court just said it was a browsewrap, which by definition means that they never "agreed" to it. COME ON.
Don't get me wrong, the judge got to the right policy result. Facebook shouldn't be dragged all over the country by lawsuits from minors. But the judge's doctrinal contortions to reach this result are painful.
Venue Transfer. Having concluded that the venue selection clause is valid and enforceable, the court then effectuates its provisions by transferring the case to Facebook's home court as the clause specifies.
Implications of the Transfer. Hey litigator friends, I could use your help assessing Facebook's move here. (I did ask Facebook for comments, but it declined). Facebook already had an adverse ruling in the highly similar Fraley case. Yet, instead of trying to get a more favorable result in a different circuit with potentially different law, Facebook has transferred this case into the same district where it suffered the interlocutory loss. Is this a good move or a puzzling one? On the one hand, by putting both cases in the same circuit, it increases the likelihood that a win in one will knock out the other (even if that win has to occur on appeal). On the other hand, it took the case out of a venue with uncertain outcome and put it into a venue where it knows it has a fight on its hands. So, litigator friends, does it make sense for Facebook to put all of the eggs in one basket, or should it have diversified its risks? If you email me, let me know if I can quote your email in an update to this post.
A timing note: Facebook filed the venue transfer motion a few weeks before the Fraley decision came out. However, surely it could have withdrawn the motion after that point if it had wanted to, and I doubt EKD would have resisted.
In an email, Venkat responded to my question:
Northern District of California judges see a ton of disputes involving Facebook, and they're probably viewed as somewhat more sophisticated in dealing with Facebook terms and privacy/publicity issues. Also, from an administrative/housekeeping standpoint, Facebook must feel more comfortable there so this may slightly weigh in favor of trying to proceed in California. From a substantive standpoint I can't think of any compelling reason to go there after getting bad precedent in a similar case. (I wonder how the statutes vary as far as the scope of substantive rights they provide. It's surprising this wasn't a bigger issue in the transfer discussion. I realize the classes may be sliced up depending on the type of rights they assert, but CA law provides for more favorable publicity rights in general?).
UPDATE: Rebecca emailed me: "Isn't the incredibly broad scope of Illinois RoP law of importance in the venue, even with a favorable choice of law clause substantively? I'd expect Illinois courts to be more RoP-friendly."
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