Indianapolis Litigation

Your friendly neighborhood technology legal counsel here to discuss with you the hidden dangers lurking in your unassuming (and unread) terms of service agreements.  Janet Croswell, one of our fabulous tech lawyers, posted back on February 10, 2010 about the pitfalls that businesses face related to the clickwrap agreement (here's a link for those playing along at home  blog.alerdingcastor.com/blog/alerding-castor).  Now for those of you scratching your head and wondering what a "clickwrap agreement is", the answer is simply those pesky agreements that we all have to agree to in order to do anything on-line and that none of us actually read.  I'm fascinated by this stuff and I'll probably only read one in twenty that I ever click past.  They are the superfluous hurdle that we fly past in order to enjoy our Internet-y goodness.  But, as Janet so wonderfully pointed out, these hindrances are actually contracts to which we are binding ourselves, or worse, our companies.  "What" you exclaimed under your breath, "You mean this is binding on me?"  And I'm forced to tell you, "yes".  Which leads to the inevitable "so what" question. 

The "so what" in this scenario is that you are likely locking yourself into a venue-selection provision.  I know the phrase sounds like you are making the decision of whether your play Deer Creek or Red Rock during the next summer tour cycle, but actually you are significantly limiting your options from a litigation standpoint.  Venue is the place where a lawsuit can be brought.  Obviously, you would like to bring a lawsuit near where you are located and where there is law that favors your position, but if you agree in contract that it will be brought in Poe-Dunk, North Dakota, well then friend, that's where you are headed. 

Recently, several courts have concluded that venue selection provisions contained within a clickwrap agreement are enforceable.  The most recent cases involve the venue-selection provision in the Google AdWords contract.  In TradeComet.com v. Google, a New York District Court found that the language from Google that

"THE AGREEMENT MUST BE CONSTRUED AS IF BOTH PARTIES
JOINTLY WROTE IT AND GOVERNED BY CALIFORNIA LAW EXCEPT
FOR ITS CONFLICTS OF LAWS PRINCIPLES. ALL CLAIMS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE GOOGLE
PROGRAM(S) SHALL BE LITIGATED EXCLUSIVELY IN THE FEDERAL
OR STATE COURTS OF SANTA CLARA COUNTY, CALIFORNIA, USA,
AND GOOGLE AND CUSTOMER CONSENT TO PERSONAL
JURISDICTION IN THOSE COURTS."

required the dismissal of an action brought in New York court.  The District Court went through a very succinct analysis of the standards for enforcement of a venue-selection provision and then made its determination of both (a) the enforceability of this agreement and (b) the reasonableness of enforcement of this provision in the instant case. 

Another court reached the same decision in Flowbee International, Inc. v. Google, again looking at this venue-selection provision in the Google clickwrap agreement.  In that case, the District Court ordered transfer rather than simply dismissing the action, but it nevertheless did transfer the case to the Northern District of California. 

These two cases illustrate the fact that when you click on that little box, you might be shoehorning yourself into a court that you don't want.  To date, most courts have applied the same analysis to as these courts did to determine that you, my friend, are stuck.  In fact, the District Court for Southern Indiana reached this decision in Appliance Zone, LLC v. Nextag, previously cited by Ms. Croswell.  

Now if you're sitting there wondering, "Ok, Mr. Bigshot at the information technology law firm,  what is a poor web-browser and member of the 21st century to do?"  My only answer is:  tune back in to Part 2.