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AOL's forum selection clause |
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Posted by paul_szynol on Saturday, June 01 @ 18:08:24 EDT
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On May 28th, Judge Robert Collings of the District Court of Massachusetts
decided a dispute that began last year, when AOL subscriber Walter
P. Hughes of Andover, Mass. discovered that AOL released his name, age
and address to one Thomas McMenamon, a Massachusetts police officer. McMenamon,
the opinion explains, "had received a print-out of a threatening
electronic mail message . . . allegedly sent from an AOL account". The
opinion doesn't clarify this point any further, so it's not readily apparent
whether McMenamon, who is part of the Methuen Police Department (check
out the department's most wanted gallery),
was the actual recipient of the email, or if the email had been sent to
someone else and he was simply investigating it--or something in-between
or altogether different (was he even on duty when he requested this information?).
Nor does the opinion take any steps toward explaining why Hughes' name was
given, rather than, say, Steve Case's. It is clear, however, that
when Hughes got wind of the fact that the service provider provided this
particular service for the police department, he sued. Pro se. In
Massachusetts. In June. In anger, perhaps. And definitely
in a contradiction to one of AOL's terms of service -- the mighty forum
selection provision.
AOL's terms of
service (TOS), which a user is supposed to read, understand and accept prior
to initiating a subscription, contain a forum selection provision that nests
the contracting parties exclusively within Virginia's jurisdictional scope.
AOL's TOS, which one hapless plaintiff termed an unconscionable adhesion
contract (vide post), summarizes this element of the agreement with
the following clause. "You expressly agree that exclusive jurisdiction
for any claim or dispute with AOL or relating in any way to your membership
or your use of AOL resides in the courts of Virginia..." Hughes failed
to persuade Collings that the forum selection clause should be disregarded,
and the court let the
clause stand.
Newsbytes, before its URL was subsumed by the Washington
Post (technews.com),
hailed the ruling as "yet another win for the fine print of the ISP's clickwrap
agreement". This ruling shouldn't be interpreted as a win for the forum selection clause.
The provision wasn't
a deciding factor, but a factor in favor of which the court decided. The
case turned out as it did, in other words, not because the forum selection
clause couldn't be challenged, but because Hughes didn't challenge it with
sufficient vigor or focus. Hughes barely rattled the cage, and the
case ended on a default, which means that this ruling is not at all an indication
of the provision's legal strength.
In fact, AOL has litigated
a number of cases which tested the strength of its forum selection provision,
and the clause caved as often as it resisted. In Koch v. AOL, plaintiff
"did not meet his burden to demonstrate that the provision was sufficiently
unfair or unreasonable so as to warrant its disregard". In Jessup-Morgan
v AOL, the US District Court for the Eastern District of Michigan applied
Virginia law, and dismissed all claims against AOL. And in AOL v. Booker,
the Court ruled that, since the parties formed the contract "through
a freely negotiated agreement", the clause should be honored despite
the unavailability of a consumer class action suit in Virginia. In AOL v. Superior Court of Alameda,
however, the court ruled that the case should be tried on the west coast
precisely because of VA's distaste for consumer class actions. Under
the California Consumers
Legal Remedies Act, the
court continued, California
would provide legal protections that are much stronger than the ones available
in VA. "Enforcing the forum selection clause would have violated California
public policy by eviscerating important legal rights afforded to California
consumers." And in Williams v. AOL, the Superior Court of Massachusetts
noted that opting-out of AOL's TOS was "elusive", that "federal cases were
not enforcing the forum selection clause and were being transferred to Florida,
not Virginia", and that plaintiffs represented residents of MA who were not
AOL's subscribers. It denied AOL's motion for a summary judgment under
Rules 12(b)3 and 12(b)6.
Hughes failed to present a convincing argument, and gave Judge Collings
no reason to disregard this term of the contract, but the clause was open
to a compelling challenge. The presence of the forum selection provision in AOL's TOS is
not, ipso facto, the final word on jurisdiction when a dispute arises between
AOL and its users, and you're not signing your soul away to Virginia's courts
by agreeing to AOL's terms of service. If it can be shown that circumstances
of the dispute render the clause unfair or unreasonable, courts will not
honor it.
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