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  • Marc Zell and Noam Schreiber

Google, Facebook and Choice-of-Law

Companies like Google and Facebook can be sued in Israeli courts, notwithstanding a forum selection clause in their terms of service. However, the choice-of-law provision will usually be enforced, resulting in foreign law litigation in Israeli courts (usually California law). That was the result of the Israeli Supreme Court’s ruling back in 2016 in Facebook, Inc. v. Ben Hamo, Civ. App. 5860/16 (Sup. Ct. 2018).

A recent Israeli decision applied Ben Hamo to a class-action lawsuit against Google. The allegations in the complaint were almost identical to those in the U.S. Federal Trade Commission’s 2014 complaint against Google alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store. That complaint ended in a settlement requiring Google to provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. For more on this, click here.

The Israeli complaint made almost identical allegations against Google. However, the complaint failed to assert claims under the applicable law, i.e. California law. Instead, the Israeli complaint brought claims under Israeli consumer protection laws. Taking its cue from Ben Hamo, the Israeli court dismissed the complaint for failure to assert claims under the applicable California law. Tedesa v. Google, LLC, Civ. Act. 56348-03-17 (Dist. Ct. Tel Aviv, July 9, 2020).

As the internet becomes the almost exclusive medium for social and commercial transactions (especially in the Covid-19 context), litigation involving global companies with standard “terms of services” may become more and more prevalent. This means that foreign companies will find themselves being hauled into Israeli courts by consumers, notwithstanding a forum selection clause in the company’s online terms of service. The flip side of this – if decisions like Ben Hamo and Tedesa are indicative of anything – more and more cases in Israel will be adjudicated in accordance with foreign law.

This has far-reaching consequences that are hard to predict. Choice-of-law is as ancient perhaps as the law itself and advocating and utilizing foreign law in a local forum is nothing surprising (certainly in the U.S. setting).

That said, at least as Israel is concerned, foreign law in Israeli courts may become something of a norm (or at least not an anomaly).

What does this mean? Well, for starters, until a bold Israeli court finds that foreign law can be asserted and proven by Israeli attorneys, any claim that invokes foreign law will require testimony (both written and oral) of an “expert.” Israeli courts routinely hold that foreign law is equivalent to “factual evidence” which requires proof. Hence, the use of experts will become routine.

More importantly, this trend may and should usher in a new era of litigators. While foreign law may require the testimony of experts, this should not exempt lead counsel from engaging in his/her own research and applying the foreign law as he/she sees fit. Indeed, foreign law should NOT be viewed merely as factual evidence (like a physician’s testimony in a medical malpractice claim). The applicable foreign law undergirds the entire case. It is the entire case. All factual evidence will be tested and analyzed pursuant to that applicable law. Lead counsel cannot and should not leave that essential and vital task to a mere “expert.” Counsel for plaintiffs and defendants alike need to familiarize themselves with the nuances of the foreign law as if they were “California” attorneys as well.

Indeed, cases like Ben Hamo and Tedesa may (and should) usher in the era of a new “Global Attorney” who, while perhaps only licensed in one or two jurisdictions, feels comfortable navigating and litigating under foreign law as if he/she were the foreign attorney. This Nietzschean-type “Uberlawyer” does not equate “foreign” law as “alien” law. He/she feels at home with the foreign law as if it was his/her backyard.

There are plenty of schools of thought that would be critical of such a concept. They would cast doubt on whether such a global attorney is possible or whether it is desirable. They would rather emphasize the “specialization” and “categorization” that law has become. While there is some merit to those propositions, we respectfully take a different approach.

Globalization effects all facets of life. It should and does affect the legal profession as well, including how we bridge the gap separating “foreign” law with “local” law, uniting the two together. We welcome the new era.

 

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