CASPI V. MICROSOFT NETWORK, L.L.C.
732 A.2d 528 (1999)
NATURE OF THE CASE: This was a dispute over a forum selection clause.
FACTS: A class action complaint sought relief against Microsoft (D) for breach of
contract, fraud, and consumer fraud for the way in which D had rolled over MSN memberships
into more expensive plans. P claimed that D engaged in unilateral negative option billing, a
practice condemned by attorney generals in 21 states with regard to AOL. P alleged that D
without notice or permission charged increased membership fees attributable to a change in
service plans. Ps moved for multi-state class action certification. D moved to dismiss the
amended complaint for lack of jurisdiction and improper venue by reason of a forum selection
clause, which D contends, is in every MSN membership agreement. The agreement was to be
governed by the laws of the State of Washington and each MSN member consented to exclusive
jurisdiction and venue of the courts in King County Washington. The complaint was dismissed
by the trial judge. It held that each member agreed to the clause when they hit the 'I
Agree' button when signing on. The court also observed that forum selection clauses are
prima facie valid (McNeill) unless the clause is a result of fraud or overweening bargaining
power, the enforcement would violate a strong public policy of the state, or enforcement
would seriously inconvenience a trial (Wilfred). The burden falls on the party objecting to
enforcement to show that the clause in question fits within one of the exceptions. The trial
judge also followed the Carnival precedent and found no fraud or overweening bargaining
power. The clause was found to be reasonable, clear and that it contained no material
misrepresentations. The mere inclusion of such a clause is a consumer contract is not per se
overweening bargaining power and that the focus is on whether such an imbalance in size
resulted in an inequality of bargaining power that was unfairly exploited by the more
powerful party (Hodes). The trial court then found that P had shown just a size difference
and nothing more and that the on line business had many competitors and P had meaningful
choices. The court also found that P, like in Carnival, had retained the option of rejecting
the contract with impunity. The clause was not found to contravene public policy and its
enforcement would not inconvenience the trial and that the inconvenience to all parties is
on greater in Washington than anywhere else in the country. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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