Almost Famous…on a Social Networking Site with a Forum Selection Clause

The ease of creating a MySpace profile (or Twitter) that impersonates a celebrity has to be nerve racking for actors, rock stars, and anyone else who is “famous.” 

 

 

Riggs v. Myspace, Inc., 2009 U.S. Dist. LEXIS 37109 (W.D. Pa. May 5, 2009) is the story of a Plaintiff who created a “Celebrity Guardian Angel” profile to protect celebrities from online impersonators. The Plaintiff’s “Celebrity Guardian Angel” profile would confirm whether a celebrity’s profile was legitimate as a means to reduce the number of celebrity impostures. 

MySpace deleted the Plaintiff’s account for violation of the MySpace account’s terms of use, after a celebrity imposture accused the Plaintiff of harassment and bullying.  Several months after deleting the Plaintiff’s profile, MySpace started their own website for celebrities, which the Plaintiff claimed was her concept. Riggs, 2-3. 

The Plaintiff sued MySpace in Pennsylvania for negligence, breach of implied contract, fraud and intentional infliction of emotional distress. Riggs, 2.

MySpace brought a motion to dismiss for improper venue or in the alternative, a motion to transfer to the United States District Court for the Central District of California, pursuant to MySpace’s terms of use agreement. Riggs, 2.

The Terms of Use provision was a click wrap agreement, which stated:

Disputes. If there is any dispute about or involving the MySpace Services, you agree that the dispute shall be governed by the laws of the State of California, USA, without regard to conflict of law provisions and you agree to exclusive personal jurisdiction and venue in the state and federal courts of the United States located in the State of California, City of Los Angeles. Either MySpace.com or you may demand that any dispute between MySpace.com and you about or involving the MySpace Services must be settled by arbitration utilizing the dispute resolution procedures of the American  [*4] Arbitration Association (AAA) in Los Angeles, California, USA, provided that the foregoing shall not prevent MySpace.com from seeking injunctive relief in a court of competent jurisdiction. Riggs, 4.

The Plaintiff argued that MySpace breached the “Terms of Use” provision by failing to enter arbitration, thusly allowing the Plaintiff to sue MySpace in Pennsylvania, instead of California.  Riggs, 4.

The Court stated MySpace “breaching” the contract by terminating the Plaintiff’s profile was immaterial.  Additionally, arbitration was not a condition of performance and had no effect on the other stated remedies.  Riggs, 5.  Therefore, any breach of the arbitration clause did not invalidate the forum selection or choice of law provisions.  Riggs, 5-6.

In language that would make the Supreme Court in Carnival Cruise Lines, Inc. v. Shute 499 U.S. 585, (U.S.Wash.,1991.) proud, the Court effectively stated that the purpose of adhesion contracts with forum selection clauses is to simplify the question of personal jurisdiction for MySpace.   Riggs, 9. Moreover, there was no reason (or argument) that the forum selection clause establishing “exclusive personal jurisdiction” in Los Angeles, California, was in anyway unfair or unreasonable.  Riggs, 9-10.

On the bright side, at least the Plaintiff can at least meet real celebrities while in Los Angeles.

When Contract Law Collides with Social Networking & Online Movie Rentals

Every now and then, there comes a case that gives me law school flashbacks.  Professor Rohwer, my old Contracts professor, this one’s for you. 

Harris v. Blockbuster, 2009 U.S. Dist. LEXIS 31531 (N.D. Tex. Apr. 15, 2009) involves Blockbuster allegedly violating the Video Privacy Protection Act.  Blockbuster Online (an online video rental service) entered into a contract with Facebook that caused rental information for Facebook-Blockbuster Online users to be published to all of the users’ Facebook friends via Facebook’s Beacon application.  Harris, 1-2. 

The Plaintiffs apparently did not like their rental history being broadcast to their Facebook friends. 

The Plaintiffs claimed Blockbuster Online violated the Video Privacy Protection Act. The VPP prohibits a video service provider from disclosing a customer’s personally identifiable information without their written consent.  The VPP Act allows for liquidated damages of $ 2,500 for each violation.  Harris, 2.

The Defendants invoked a binding arbitration provision, pursuant to the contractual “Terms and Conditions.”  The Terms and Conditions were a “clickwrap” style agreement, which included binding arbitration and a waiver of any class action litigation against Blockbuster.  Harris, 4. The online contract stated, in relevant part:

Blockbuster may at any time, and at its sole discretion, modify these Terms and Conditions of Use, including without limitation the Privacy Policy, with or without notice. Such modifications will be effective immediately upon posting.

The issue before the Court was whether the online contract “Terms and Conditions” were illusory and thus unenforceable.  Harris, 3-4.  The Court found the online contract illusory. 

For those flashing back to first year Contracts, a contract must be supported by consideration, where something of value (such as a peppercorn) is received by a promisor from a promisee.  Black’s Law Dictionary.  If there is no consideration, the contract is illusory and unenforceable.  Harris, 4 and Black’s Law Dictionary.

The crux of the Plaintiffs’ arguments were that since Blockbuster reserved the right to modify the Terms and Conditions at their “sole discretion” at “any time” to be effective immediately on their site, the contract was thus illusory.  Harris, 6-7. 

The Court found the contract was illusory because Blockbuster had the power to unilaterally change the contract whenever they wanted to do so. The only “limit” was the new terms would not be effective until posted online.  Harris, 6-7. 

Online “clickwrap” agreements can include forum selection clauses, choice of law provisions and other “unilateral” agreements.  The issue of illusory contracts will continue to be litigated and will probably be the topics of future Contracts hornbooks.

This case also raises an interesting question: just what will the discovery look like?  Will the Plaintiffs produce screen shots of their published movie rental history to show their injury?  Will the Plaintiffs request databases from the Defendants?  These sorts of questions will continue to come up as Web 2.0 litigation continues.