Unbeatablesale.com, Inc. v. Meta Platforms, Inc.

Background

Unbeatablesale.com, Inc. sued Meta Platforms, Inc., formerly known as Facebook, Inc., for breach of contract. The alleged contract was Meta’s terms of service. Unbeatablesale.com alleged that Meta removed product listings from its Facebook page after receiving intellectual-property complaints and did not timely notify Unbeatablesale.com or explain its options for seeking another review. It also alleged that the page was restricted for failing to follow community standards.

According to the complaint, the restrictions caused sales to fall from about 50 sales per day to one or two sales per day. Unbeatablesale.com also alleged that the page had generated approximately $1 million in annual sales before the restrictions.

Meta’s Motion

Meta moved to dismiss under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). Rule 12(b)(2) concerns personal jurisdiction—whether the court has power over the defendant. Rule 12(b)(6) concerns whether the complaint states a legally sufficient claim. Meta argued that it was not subject to general or specific personal jurisdiction in New Jersey, that Unbeatablesale.com had not adequately pleaded breach of contract, and that Section 230 of the Communications Decency Act independently barred the contract claim.

Meta also argued that the forum-selection clause in the terms of service required the case to be dismissed or transferred to the United States District Court for the Northern District of California. The clause stated that disputes arising from or related to the terms or use of Meta products had to be resolved exclusively in that federal court or in a state court in San Mateo County, California. It also provided that California law would govern.

Forum-Selection Clause

The court held that Unbeatablesale.com’s allegations about its use of Facebook fell within the forum-selection clause. The court explained that such clauses are generally enforceable unless the opposing party shows fraud or overreaching, a violation of strong public policy, or extreme inconvenience that would make litigation unreasonable.

The court found that Unbeatablesale.com did not argue that the clause was fraudulent, against public policy, or unreasonably inconvenient. Instead, Unbeatablesale.com acknowledged that the terms of service governed its use of Facebook and stated that the case should be transferred if the court found that personal jurisdiction was lacking. The court therefore found the clause valid and enforceable.

Transfer Analysis

Because the clause was enforceable, the court gave no weight to Unbeatablesale.com’s choice to sue in New Jersey and focused on public-interest considerations. The court found that the possibility of registering a judgment in another district was neutral. It found that practical considerations slightly favored transfer, reasoning that the record contained few facts connecting Meta to New Jersey and that other courts had found Meta subject to general jurisdiction in California.

The court found that court congestion favored transfer because the District of New Jersey had a heavier caseload than the Northern District of California. The court also found that local interest and public policy favored transfer, citing the contractual choice of a California forum and New Jersey’s policy favoring enforcement of contractual provisions. Finally, the court found that familiarity with applicable state law favored transfer because the terms of service contained a California choice-of-law provision.

Disposition

The court concluded that the forum-selection clause was valid and that the public-interest factors strongly favored transfer. It granted Meta’s alternative request to transfer the action to the Northern District of California under 28 U.S.C. § 1404(a). In the conclusion, the court stated that Meta’s motion was denied as to dismissal but granted as to the request to transfer venue. Because it found transfer appropriate, the court declined to consider Meta’s other arguments for dismissal. Judge Michael A. Shipp signed the memorandum opinion.