GEORGIA AUTO GROUP LLC v. META PLATFORMS INC

Background

Georgia Auto Group, LLC and Jesse Dillon Smith sued Meta Platforms, Inc., formerly known as The Facebook, Inc. and doing business as Facebook. Smith asserted negligence based on the suspension of his personal Facebook page. Georgia Auto alleged breach of contract based on its inability to access its business Facebook page and Facebook’s advertising services after Smith’s page was suspended.

Meta moved to dismiss the complaint and argued, among other things, that the case belonged in a different forum under Facebook’s terms of service. The plaintiffs did not respond to the motion.

Forum-selection clause

The Facebook terms of service govern use of Facebook and Meta’s other products and services. The terms state that claims or disputes arising from or related to the terms or a user’s access to or use of Meta products must be resolved exclusively in the U.S. District Court for the Northern District of California or a state court in San Mateo County. The terms also select California law.

The court held that forum-selection clauses are generally enforceable unless the plaintiff makes a strong showing that enforcement would be unfair or unreasonable. Because the plaintiffs did not respond, Smith did not make that showing. The court also agreed that the clause covered Smith’s negligence claim because that claim concerned his access to and use of Facebook.

Transfer rather than dismissal

The court explained that when a forum-selection clause points to a federal court, federal law generally calls for transferring the case rather than dismissing it. Meta argued that dismissal was appropriate because the Northern District of California was not a proper forum for Georgia Auto’s contract claim, which Meta said was subject to arbitration. The court noted that the Supreme Court had indicated that a claim involving an issue referable to arbitration should be stayed rather than dismissed. It therefore concluded that the Northern District of California was better suited to determine the application and effect of the arbitration clause.

Disposition

The court did not address Meta’s arguments based on a liability disclaimer, failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), or the Communications Decency Act. The court denied Meta’s motion to dismiss without prejudice and directed the Clerk to transfer the action to the U.S. District Court for the Northern District of California. The order did not resolve the underlying negligence or breach-of-contract claims.