Forrest v. Verizon Communications Inc.

• Citation: 805 A.2d 1007
• Decision Date: 29 August 2002
• Docket Number: No. 01-CV-1101.,01-CV-1101.
• Parties: Bruce G. FORREST, Appellant, v. VERIZON COMMUNICATIONS, INC. and Verizon Internet Services, Inc., Appellees.
• Court: Court of Appeals of Columbia District

805 A.2d 1007

Bruce G. FORREST, Appellant, v. VERIZON COMMUNICATIONS, INC. and Verizon Internet Services, Inc., Appellees.

No. 01-CV-1101.

District of Columbia Court of Appeals.

Argued June 18, 2002.

Decided August 29, 2002.

Victoria S. Nugent, with whom Michael D. Hausfeld, Gary E. Mason and Alexander E. Barnett were on the brief, Washington, DC, for appellant.

Guy Miller Struve, with whom Harry T. Jones, Jr., Washington, DC, and Scott W. Muller were on the brief, for appellees.

Before STEADMAN and REID, Associate Judges, and NEWMAN, Senior Judge.

STEADMAN, Associate Judge:

The question in this case is whether a forum selection clause mandating that claims be brought in Virginia should be applied to appellant's purported class action involving consumers' attempts to register for and use Verizon Internet Services, Inc.'s ("VIS") digital subscriber line ("DSL") service. We hold that enforcement of this clause is reasonable and that all of appellant's claims fall within the scope of the clause. Consequently, we affirm the trial court's order dismissing appellant's suit.

I.

VIS is a Delaware corporation with its principal place of business in Reston, Fairfax County, Virginia.¹ Among its services are DSL Internet access, which provides access at a much higher speed than dial-up connections. VIS has signed up hundreds of thousands of subscribers, including at one point appellant. He is a District of Columbia resident who is an attorney employed by the Department of Justice.

According to appellant, activating the DSL service involved a period of lengthy delays. Once the service was activated, "customers have experienced frequent and lengthy disruptions in service, and the service has operated at speeds much lower than promised." Appellant himself alleges that he signed up for DSL service in August 2000 and was promised activation would occur on August 14, 2000. However, he never actually received the service on that date or afterwards and finally canceled the service in December 2000.

Subsequently, appellant² filed a purported class action³ in District of Columbia Superior Court alleging breach of contract, negligent misrepresentation, and violation of Virginia's consumer protection laws.⁴ VIS responded with a motion to dismiss based upon a forum selection clause in the Verizon Internet Services Access Agreement ("Agreement") that provided that subscribers to the DSL service "consent to the exclusive personal jurisdiction of and venue in a court of competent jurisdiction located in Fairfax County, Virginia."⁵ The trial court, after carefully analyzing the parties' contentions, issued an order granting the motion to dismiss. Appellant filed a timely appeal. The trial court's interpretation of the forum selection clause, a contractual provision, is subject to de novo review. See Terra Int'l v. Mississippi Chem. Corp., 119 F.3d 688, 692 (8th Cir.),

cert. denied, 522 U.S. 1029, 118 S.Ct. 629, 139 L.Ed.2d 609 (1997).

II.

In this case we address, apparently for the first time, the validity of a forum selection clause in the District of Columbia courts.⁶ Historically, such clauses were not favored by American courts. However, in the past three decades, commencing with the Supreme Court's influential decision in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), jurisprudence has sharply shifted; "such clauses are [now] prima facie valid and [will] be enforced unless enforcement is shown by the resisting party to be `unreasonable' under the circumstances." Id. at 10, 92 S.Ct. 1907; see also Professional Ins. Corp. v. Sutherland, 700 So.2d 347, 350 n. 3 (Ala.1997)

(listing jurisdictions where clauses are presumptively valid); RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 80 (1988) ("The parties' agreement as to the place of the action will be given effect unless it is unfair or unreasonable."). We concur with these authorities and adopt the modern rule for the District of Columbia as well.

The question before us, then, is whether appellant has shown that enforcement of the clause in the Agreement is "unreasonable under the circumstances."

A.

First, "[a]s a threshold matter, the validity of a forum selection clause ... depends on whether the existence of the clause was reasonably communicated to the plaintiff." O'Brien v. Okemo Mt., 17 F.Supp.2d 98, 103 (D.Conn.1998). Appellant argues that VIS "did not provide ... adequate notice of the clause or its significance."

To become DSL subscribers, customers must agree to all the terms of the Agreement, including the forum selection clause. The clause is found in the final section of the main text of the Agreement, which, when printed out, totals thirteen pages (including two lengthy appendices). Many consumers, though, presumably read the Agreement in a scroll box on their computer monitors, where only a small portion of the document is visible at any one time. The contract is entered into by the subscriber clicking an "Accept" button below the scroll box. At the very top of the Agreement it states: "PLEASE READ THE FOLLOWING AGREEMENT CAREFULLY."

The clause is part of the final section 14 entitled "General Provisions" and is found within the following paragraph:

14.7 You and VIS agree that this Agreement shall be interpreted in accordance with the substantive laws of the Commonwealth of Virginia, without reference to its principles of conflicts of laws. You and VIS consent to the exclusive personal jurisdiction of and venue in a court of competent jurisdiction located in Fairfax County, Virginia. Any cause of action or claim you may have with respect to the Service must be commenced within one (1) year after the claim or cause of action arises or such claim or cause of action is barred.

Unlike two other textual provisions, the clause is not in capital letters; otherwise its type size and appearance are consistent with the agreement as a whole.

We agree with the trial court that appellant was provided adequate notice of the forum selection clause. "The general rule is that absent fraud or mistake, one who signs a contract is bound by a contract which he has an opportunity to read whether he does so or not." Nickens v. Labor Agency of Metro. Washington, 600 A.2d 813, 817 n. 2 (D.C.1991). See also Pers Travel, Inc. v. Canal Square Associates, 804 A.2d 1108, 1111 (D.C.2002)

(waiver of right to trial by jury). In reading through the Agreement before it was accepted, appellant (and other consumers) would have inevitably discovered the forum selection clause. We are not persuaded that notice would have been sufficient only if the clause was in all capital letters or was placed in the section entitled "Limitations of Liability and Remedies" rather than "General Provisions." See Vitricon, Inc. v. Midwest Elastomers, Inc., 148 F.Supp.2d 245, 247 (E.D.N.Y.2001) ("fine print" acceptable for forum selection clause); Caspi v. Microsoft Network, L.L.C., 323 N.J.Super. 118, 732 A.2d 528, 532 (App.Div.1999). But see Oxman v. Amoroso, 172 Misc.2d 773, 659 N.Y.S.2d 963, 967 (N.Y.City Ct.1997). Neither is the use of a "scroll box" in the electronic version that displays only part of the Agreement at any one time inimical to the provision of adequate notice. See Kilgallen v. Network Solutions, Inc., 99 F.Supp.2d 125, 129-30 (D.Mass.2000); Caspi, supra, 732 A.2d at 532. (Tellingly, appellant makes no argument that the choice of law provision, which his complaint relies upon, should not be enforced due to inadequate notice despite its sharing the same "defects" as the forum selection clause.) A contract is no less a contract simply because it is entered into via a computer.

Appellant also contends that notice was improper because VIS did not highlight the significance of vesting exclusive jurisdiction in Virginia. Specifically, the Agreement gave no hint that Virginia is one of only two states that lacks a class action procedure similar to Super. Ct. Civ. R. 23 & 23-I. See H. Newberg, Newberg on Class Actions § 13, Appendices 13-1, 13-2 (3rd ed.1992).⁷ Of course, every jurisdiction's laws differ to some degree, and appellant concedes that VIS did not have "an obligation to inform its customers of every procedural nuance of Virginia law." But, according to appellant, VIS must provide notice when consumers are waiving a possible "remedy," class actions, by agreeing to a forum selection clause. We fail to see, however, why the absence of one particular remedy in a foreign jurisdiction should be elevated beyond all other possible jurisprudential consequences of a forum selection clause.⁸ Cf. Interamerican Trade v. Companhia Fabricadora de Pecas, 973 F.2d 487, 489 (6th Cir.1992)

(enforcing forum selection clause even though forum (Brazil) has no trial by jury or trial by deposition and plaintiff would be required to deposit $2.2 million as security).

B.

Given that the clause was reasonably communicated, we turn next to appellant's contention that enforcement of the clause would be unreasonable.⁹ Appellant must demonstrate "(i) [the clause] was induced by fraud or overreaching, (ii) the contractually selected forum is so unfair and inconvenient as, for all practical purposes, to deprive the plaintiff of a remedy or of its day in court, or (iii) enforcement would contravene a strong public policy of the [forum] where the action is filed." Gilman v. Wheat, First Securities, Inc., 345 Md. 361, 692 A.2d 454, 463 (1997); see also Bremen, supra,407 U.S. at 15-16,92 S.Ct. 1907.

Appellant contends that he would be deprived of his day in court because of his inability to file a class action in Virginia. According to appellant, each person's damages are likely to be so small that the cost of litigating an individual claim in Virginia would exceed the claim's potential value. Only through a class action, appellant argues, will customers such as himself have a viable option for seeking relief from VIS' alleged misconduct.

Jurisdictions have split as to...