Designer Skin LLC v. S & L Vitamins, Inc., et al.
Bruce G. Forrest v. Verizon Communications Inc. and Verizon Internet Services, Inc.
805 A.2d 1007 (Dist. of Columbia Court of Appeals, August 29, 2002 )
Click-Wrap Agreement Entered Into By Clicking "Accept" Icon Immediately Below Scroll Box Containing Terms of Contract
Affirming the court below, the District of Columbia Court of Appeals holds that plaintiff entered into a binding contract online with Verizon Internet Services ("VIS") by clicking an "Accept" icon, indicating his assent to be bound by the contract. This icon appeared directly below a "scroll box" on VIS's website which contained the terms of the contract. The terms were not all visible online when the user initially viewed the web page on which the "scroll box" was found. Rather, to review all of the contract's terms, the user was required to use the "scroll box" to scroll through them.
The Court of Appeals also affirmed the dismissal of a putative class action commenced by plaintiff arising out of his dissatisfaction with VIS's DSL service, because the suit was not commenced in Virginia, the jurisdiction specified in the contract's forum selection clause as the exclusive jurisdiction in which disputes could be heard.
Defendant Verizon Internet Services provides, among other things, DSL internet access services to subscribers.
Plaintiff alleged that he signed up to receive such service. Unfortunately, according to plaintiff, VIS failed to activate his service during the ensuing five month period. As a result, plaintiff commenced a putative class action in the District of Columbia, where he resides, purporting to assert claims on behalf of himself and those who had also experienced delays in service activation, as well as those who's services were purportedly disrupted thereafter.
VIS moved to dismiss, arguing that the forum selection clause contained in the parties' agreement mandated that all suits be brought in Virginia, where VIS had its principal place of business. The Court agreed, and dismissed plaintiff's suit.
The Court held that plaintiff had entered into a binding agreement with VIS by clicking the "Accept" icon, appearing on VIS's website, indicating his assent to be bound by the contract's terms, which terms appeared online in a "scroll box" directly above that icon. Only a portion of the contract's terms, including the words "Please Read The Following Agreement Carefully," were visible when the user first viewed the web page on which they were found. To view the balance of the contract, including the forum selection clause at issue, it was necessary to scroll down.
Forum Selection Clause Enforceable
The Court also held that the forum selection clause was enforceable. Notably, the Court reached this result notwithstanding the fact that the clause mandated that suit be brought in the Virginia state courts, one of the two state court systems which generally do not permit a plaintiff to pursue class actions. Plaintiff argued that the absence of this procedural mechanism would effectively bar the plaintiffs from pursuing a remedy given the relatively minor stakes at issue for each individual plaintiff.
For a forum selection clause to be enforceable, its presence in the parties' contract must be "reasonably communicated to plaintiff." If so communicated, under Bremen v. Zapata Off- Shore Co., 407 U.S. 1, 10 (1972) such clauses "are prima facie valid and [will] be enforced unless enforcement is . . . unreasonable under the circumstances." To demonstrate unreasonableness, the party seeking to avoid application of the forum selection clause:
The Court held that plaintiff was given sufficient notice of the forum selection clause by its inclusion within the contract terms viewable in the scroll box. Neither the fact that a user needed to scroll down to see the clause, nor the fact that the clause was not preceded by the heading 'Forum Selection Clause' (the clause was found in the General Provisions section of the contract), altered that conclusion.
The Court also held that enforcement of the clause was reasonable, notwithstanding plaintiff's claim that his inability to pursue a class action in Virginia would prevent him and the other putative plaintiffs from pursuing any recovery at all. While noting that courts had taken differing views on this issue, the Court determined the better view was to uphold the clause. In reaching this result, the Court noted that plaintiff need not travel far to commence suit in the jurisdiction designated by the clause, given his residence in the District of Columbia; that Virginia had a small claims court, which permitted a plaintiff to pursue claims in which only small stakes were sought; that attorneys' fees were available in an appropriate consumer action under Virginia law; and finally, that the contract permitted plaintiff for a thirty day period after registration to cancel the agreement and obtain a full refund of all sums paid.
The Court of Appeals accordingly affirmed the dismissal of plaintiff's suit.