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Forum selection clause in clickwrap agreement enforceable

Meier v. Midwest Recreational Clearninghouse, LLC, 2010 WL 2738921 (E.D. Cal. July 12, 2010)

Plaintiffs live in California and bought an RV online from a vendor in Minnesota. The vendor’s website terms of service had a provision requiring that all disputes “arising out of or related to the use” of the website be brought in state court in Minnesota.

When plaintiffs — who were unhappy about the RV — brought a lawsuit in federal court in California, defendants moved to dismiss for improper venue. The court granted the motion.

The court noted that under the Bremen case, forum selection clauses are prima facie enforceable. And the Carnival Cruise Lines case takes that notion even further, giving forum selection clauses this presumption of enforceability in preprinted agreements.

In this case, plaintiffs argued that the court shouldn’t enforce the forum selection clause because it wasn’t freely bargained for. And they claimed that enforcing it would effectively deny them their day in court.

But that did not sway the judge. The court found that there was no bad faith motive that put the forum selection clause in the clickwrap agreement. And even though litigating in Minnesota might be inconvenient for California residents, it was not enough to bar them from the judicial system.

Moreover, just like the Supreme Court noted in Carnival Cruise Lines, the presence of forum selection clauses can reduce the costs of litigation because they cut down on the number of pretrial motions arguing over venue. And they also help consumers — this cost savings should ostensibly be passed on.

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Full post as published by InternetCases.com on July 26, 2010 (boomark / email).