Mahoney v. Facebook, Inc.

Background

Genevieve Mahoney, also identified as @genmahoney19, sued Facebook, Inc. in the Circuit Court of Davidson County, Tennessee. She alleged defamation and negligent infliction of emotional distress and sought $168,000,000 in damages. Facebook removed the case to the U.S. District Court under the federal diversity-jurisdiction statute. The court described Mahoney as a citizen and resident of Nashville, Tennessee, and Facebook as a Delaware corporation with its principal place of business in Menlo Park, California.

The pending matters were Mahoney’s motion to remand, which sought to return the case to state court, and Facebook’s motion to transfer the case to the Northern District of California.

Motion to Remand

The court held that federal subject-matter jurisdiction existed when Facebook removed the case. The amount in controversy exceeded $75,000, and the parties were citizens of different states, establishing complete diversity under 28 U.S.C. § 1332(a).

Mahoney argued that Facebook had waived its right to remove because a forum-selection clause designated the Northern District of California as the exclusive federal forum but did not expressly include language addressing removal. The court explained that waiver of removal must be clear and unequivocal. It found that Mahoney did not argue that Facebook had expressly waived removal or had taken substantial action in state court showing an intent to litigate there on the merits. The court therefore found no waiver and denied Mahoney’s motion to remand.

Motion to Transfer

Facebook sought transfer under 28 U.S.C. § 1404(a), relying on a forum-selection provision in the Instagram Terms of Use. The court stated that, before considering the relevant transfer factors, it had to determine whether the clause applied to the claims and was mandatory, valid, and enforceable.

Mahoney relied on her rejected waiver argument to challenge enforcement of the clause. The court found that she had not met her burden of showing that the clause was unenforceable. Because the clause applied, the court treated private-interest factors as favoring the selected forum and required Mahoney to show that public-interest factors overwhelmingly disfavored transfer. The court found that she did not address those factors and had not met that burden.

The court therefore granted Facebook’s motion to transfer the case to the Northern District of California. The opinion resolved the motions concerning remand and transfer; it did not decide the merits of Mahoney’s defamation or negligent-infliction-of-emotional-distress claims.