While many of us were hanging our stockings with care on Monday evening, Facebook and Instagram were facing a far less cheery Christmas present in the form of a proposed class action lawsuit filed in a federal court in California. Nothing says “Happy Holidays” like a little legal action against a ginormous social network, right?

Reuters says this appears to be the first civil lawsuit to stem from Instagram’s changed service terms that everyone was so upset about. Those changes included sections that caused uses to think their images would be used to generate advertising revenue without compensation.

The company eventually backpedaled and agreed to go back to its 2010 set of terms and privacy policy, but apparently that hasn’t appeased the plaintiffs in this case.

In the lawsuit, a California Instagram user is claiming breach of contract, among other claims.

“We believe this complaint is without merit and we will fight it vigorously,” Facebook spokesman Andrew Noyes said in an e-mail to Reuters.

We doubt the user in this lawsuit is happy over the new mandatory arbitration clause, which will go into effect in mid-February unless users actively opt out of it. Might as well get in a class-action suit now before some users effectively lose their right to join such a thing.

The lawsuit claims that customers who don’t agree with Instagram’s terms of service can cancel accounts but then lose their rights to any photos they’d shared beforehand.

“In short, Instagram declares that ‘possession is nine-tenths of the law and if you don’t like it, you can’t stop us,'” the lawsuit says.

Instagram furor triggers first class action lawsuit [Reuters]

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