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AOL's forum selection clause
Posted by paul_szynol on Saturday, June 01 @ 18:08:24 EDT Governance

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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