Filed: Feb 16 2004
Plaintiff's Attorney(s): The Lakin Law Firm, Wood River; Freed & Weiss, Chicago.
Named Plaintiff(s): Rosa White
Defendant(s): America Online, Inc.
Defendants Attorney: Latham & Watkins, Chicago/Washington D.C.
Complaint: Plaintiffs accuse AOL of fraud for taking unauthorized and unsolicited money from its customers' checking accounts and credit cards.
AOL requires new customers to provide credit card or checking account numbers for automatic billing. Subscribers must then electronically sign the AOL user agreement--which contains a forum selection clause.
The plaintiffs claim AOL fraudulently took money out of their checking accounts to pay for a product called Credit Alert.
Background: Companies that conduct business over the internet are subject to being sued in any state into which they sell products or services.
In a standard forum-selection clause, parties to a contract expressly agree to litigate all disputes arising from the contract in a specific state.
In the context of a website, a forum selection clause can be implemented such that a website visitor would effectively agree to litigate all disputes arising from website use in the website owner's home state.
Well-written and strategically-placed forum selection clauses are inexpensive to implement on a website, and have the potential to sharply limit the exposure of any company-small or large-to to the added expense in time, money and resources that usually comes with being sued outside of the company's home state.
Motions heard this week: Defendant AOL moves to dismiss based on their Forum Selection Clause and user agreement. AOL claims plaintiffs' electronic signature makes the agreement valid and enforceable, including the clause that states, “You expressly agree that exclusive jurisdiction for any claim or dispute with AOL or relating in anyway to your membership or use of AOL resides in the courts of Virginia.”
AOL cites the U.S. Supreme Court's decision in Carnival Cruise Lines v Shute, (499 US 585) as well as several cases where Illinois judges follow the reasoning of Shute to dismiss where a forum selection clause is considered prima facie valid.
Judge Byron will hear the motion on Friday September 10th at 9 am in Room 327.