Facebook Terms of Service Class Action Lawsuit Dismissed

A federal judge dismissed with prejudice a putative class action accusing Facebook of violating New Jersey’s Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA) by requiring New Jersey residents to resolve disputes with the social media giant in California.

In the eight-page order, U.S. District Judge Haywood S. Gilliam Jr. granted Facebook’s motion to dismiss claims brought by plaintiffs Jason Palomino and Jason Huhn.

Judge Gilliam agreed with Facebook’s argument that their Terms of Service contain an enforceable California choice-of-law clause, and therefore since the plaintiffs agreed to the Terms of Service, the TCCWNA is inapplicable.

“Accordingly, the court finds that the TCCWNA and California consumer protection law aim to accomplish the same end, and thus California law is not contrary to fundamental New Jersey policy,” Judge Gilliam wrote.

The judge also noted that because Facebook’s headquarters are located in California, the choice-of-law provision proves valid and does not violate New Jersey protection laws as argued by the plaintiffs.

Originally filed in California Superior Court in June 2016, but later removed to federal court, the plaintiffs brought the class action lawsuit asserting that Facebook’s choice-of-law provision directly violates the TCCWNA since New Jersey residents are prohibited from protection under California laws and are forced to waive their rights by agreeing to Facebook’s Terms of Service.

The pair sought to represent a Class of New Jersey Facebook users, contending that the California choice-of-law clause is contrary to fundamental New Jersey policy for two main reasons. The first being that the enforcement of the choice of law provision “would effectively write out of existence New Jersey’s fundamental policy of protecting its citizens from illegal contract terms.”

Secondly, the plaintiffs argued that California law does not provide the same protections as the TCCWNA or “afford Plaintiffs the same rights.”

But Judge Gilliam was not persuaded and ruled that the plaintiffs’ complaint that California’s consumer protection laws were not compatible with New Jersey’s TCCWNA statute “misses the point” of a choice-of-law analysis.

“Rather, the inquiry is whether California consumer protection law is contrary to New Jersey’s arguably fundamental policy of protecting consumers from confusion and deception caused by businesses,” the judge wrote. “The court finds that it is not.”

The judge also noted it was not necessary to address Facebook’s argument that its users were not “consumers” as defined by the TCCWNA, since he found the choice-of-law provision was valid.

The plaintiffs are represented by Katrina Carroll and Kyle A. Shamberg of Lite DePalma Greenberg LLC, Todd D. Carpenter, Brittany C. Casola, Gary F. Lynch, R. Bruce Carlson and Kevin Abramowicz of Carlson Lynch Sweet Kilpela & Carpenter LLP, and Jeremy M. Glapion of The Glapion Law Firm LLC.

The Facebook New Jersey Consumer Rights Class Action Lawsuit is Jose Palomino, et al. v. Facebook Inc., Case No. 3:16-cv-04230, in the U.S. District Court for the Northern District of California.