Dejohn v. The .Tv Corp. Intern.
| Decision Date | 16 January 2003 |
| Docket Number | No. 02 C 4497.,02 C 4497. |
| Citation | 245 F.Supp.2d 913 |
| Parties | David DeJOHN, Plaintiff, v. THE .TV CORPORATION INT'L, Register.com, Inc., and Verisign Inc., Defendants. |
| Court | U.S. District Court — Central District of Illinois |
Brian Farley, Perkaus & Farley, LLC, for Plaintiff David DeJohn.
Mark V.B. Partridge, Bradley L. Cohn, Thad Chaloemtiarana and Nerissa Coyle McGinn, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, for Defendants Verisign
and the .TV Corporation International.
Matthew R. Kipp and Donna L. McDevitt, Skadden, Arps, Slate, Meagher & Flom, for Defendant Register.com.
Plaintiff David DeJohn ("DeJohn") tried to purchase certain domain names for $50 each from defendant The .TVCorporation, International (".TV") by going though defendant Register.com, Inc. ("Register.com"), which is a domain name registrar. A "domain name" is another term for an internet address, and a "domain name registrar" is an entity that sponsors domain name applications. When virtually all of his applications were rejected by .TV because the $50 price listed by Register.com was too low, DeJohn sued Register.com, .TV, and .TV's parent, defendant VeriSign, Inc. ("VeriSign"). In his three count complaint, DeJohn claims that all of the defendants breached a contract (Count I), violated the Illinois Consumer Fraud and Deceptive Practices Act, 815 ILCS § 505/1, et seq. (Count II), and violated the Uniform Deceptive Trade Practices Act, 815 ILCS Act 510 (Count III).1
The defendants seek to dismiss this action for failure to state a claim for which relief can be granted pursuant to Fed. R.Civ.P. 12(b)(6) and for improper venue pursuant to Fed.R.Civ.P. 12(b)(3). For the following reasons, Register.com's motion to dismiss Count I for lack of venue is granted and its motion to dismiss Counts II and III for failure to state a claim is granted. The portions of Counts I, II, and III directed at .TV and VeriSign are dismissed in their entirety for failure to state a claim.
DeJohn is an Illinois citizen. Register.com is a Delaware corporation with its principal place of business in New York, .TV, is a Delaware corporation with its principal place of business in California, and VeriSign is a Delaware corporation with its principal place of business in California. Because over $75,000 is at issue, diversity jurisdiction is proper under 28 U.S.C. § 1332.
Defendant Register.com is an Internet domain name registrar. Defendant .TV, a wholly owned subsidiary of defendant VeriSign, is the administrator of the ".tv" top level domain name registry.. TV receives registration applications from independent domain names registrars, including Register.com. If an application complies with .TV's requirements, .TV enters it into the ".tv" registry. If the application fails to comply, .TV rejects it and returns it to the domain name registrar.
DeJohn submitted applications to .TV via Register.com's website in an attempt to register the domain names "www.business.tv," "www.wallstreet.tv," "www.x.tv," "www.realtor.tv," "www.sex.tv," and "www.mayberry.tv." DeJohn tendered payment of the $50 advertised price for each domain name he requested. As a condition precedent to submitting each of the applications, DeJohn was required to enter into a Services Agreement with Register.com (the "Register.com Agreement"). The electronic format of the contract required DeJohn to click on a box indicating hat he had read, understood, and agreed to the terms of the contract in order to accept its provisions and obtain the registration or reject the provisions and cancel the application. This type of online contract is known as a click-wrap. See Specht v. Netscape Comms. Corp., 306 F.3d 17, 22 (2d Cir.2002) ).
The actual text of the Register.com Agreement was provided through a hyperlink available directly above the box.2 One of the contract provisions required DeJohn to acknowledge and agree that Register.com could not guarantee registration or renewal of a desired domain name. The contract also included a choice of law clause which stated that New York law would govern any dispute arising under the contract, as well as a forum selection clause requiring any suit arising from the contract to be brought in the Southern District of New York.3
As a term and condition of the Register.com Agreement, DeJohn was also required to agree to the terms of the .TV Registration and Services Agreement (".TV Agreement"), which was incorporated by reference.4 The .TV Agreement contained a choice of law clause indicating that California law would apply to any dispute under the contract and a forum selection clause requiring any suit arising from the contract to be brought in a federal or state court in Los Angeles, California.5
Shortly after DeJohn submitted his applications, Register.com sent him e-mail messages indicating that he had successfully registered the requested domain names. These messages were sent in error, as Register.com was unable to register five of the six domain names requested by DeJohn for $50 each. Specifically, when .TV received DeJohn's domain name applications from Register.com, .TV accepted the "www.mayberry.tv" application, but rejected the remaining applications because the registration fees for those domain names were actually significantly higher than $50.
Upon receiving notice of the rejections from .TV, and within 72 hours of DeJohn's submission of his applications, Register.com notified DeJohn that his applications were unsuccessful and refunded his money. Prior to the events giving rise to this dispute, DeJohn had requested and successfully registered several Internet domain names through Register.com.
Each of the defendants has filed a separate motion to dismiss. The court will consider them in turn.
DeJohn asserts that an implied contract was created when Register .com accepted his offer to register the domain names at $50 each. He contends that this implied contract—not the Register.com Agreement—governs his relationship with Register.com. He then argues that Register, com breached this implied contract when it failed to register the requested domain names. Although he maintains that the Register.com Agreement is not applicable, DeJohn alternatively argues that the Register.com Agreement is, in any event, unenforceable.
On the other hand, Register.com maintains that the Register.com Agreement became effective when DeJohn clicked the box on its website indicating that he read, understood and agreed to its terms. Thus, Register.com argues that the written Register.com Agreement, and not any alleged implied contract, governs its relationship with DeJohn. Register.com also asserts that, even if some sort of an implied contract existed, it does not supercede the written Register .com Agreement because the Register.com Agreement contains an integration clause.
Since DeJohn has not alleged a breach of the actual Register.com Agreement itself, Register.com contends that his breach of contract claim fails to state a claim upon which relief may be granted. In addition, Register.com asserts that the claims against it should proceed in the Southern District of New York pursuant to the contract's forum selection clause and thus moves for dismissal under Fed.R.Civ.P. 12(b)(3) based on improper venue.
Before the court can address the merits of these arguments, it must first determine what law governs this diversity action. According to Register.com, New York law applies because the Register .com Agreement contained a binding choice of law clause.6 DeJohn argues that choice of law in the contract must yield to the law of the forum state, and relies exclusively on Illinois law to support his claims.
In a diversity federal court must follow the conflict of laws principle of the state in which it sits. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); see also Gramercy Mills, Inc. v. Wolens, 63 F.3d 569, 572 (7th Cir.1995) (). In Illinois, where the parties contract for a specific substantive law to govern a dispute, Illinois law respects the choice of law provision if the contract is valid. See Kohler v. Leslie Hindman, Inc., 80 F.3d 1181, 1185 (7th Cir.1996). As discussed in detail below, the court finds that the Register.com Agreement is valid. Accordingly, the court will apply New York substantive law to the claims against Register.com.
DeJohn asserts that Register.com violated an implied duty of good faith and fair dealing. As noted above, DeJohn argues that an implied contract to this effect was created when Register.com accepted his domain name registration applications. Register.com maintains, however, that when DeJohn submitted the five domain name applications at issue in this case, he agreed to be bound solely by the terms of the Register.com Agreement.
In general, where the language of a contract is clear and unambiguous, the terms of the agreement are used to determine the parties' intent. See Martin v. Glenzan Assoc., Inc., 75 A.D.2d 660, 426 N.Y.S.2d 347, 348 (N.Y.App.Div.1980). The existence of an enforceable contract governing a particular transaction precludes recovery under an implied contract related to the same transaction. See Moore v. Microsoft Corp., 293 A.D.2d 587, 741 N.Y.S.2d 91, 92 (N.Y.App.Div.2002). Here, any implied contract between De-John and Register.com is negated by De-John's clear agreement to be bound by the...
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