Caspi v. MSN

Citation: Caspi v. The Microsoft Network, 323 N.J. Super. 118, 732 A.2d 528 (1999).

Factual Background
The plaintiffs were subscribers to The Microsoft Network (MSN). They filed a class action lawsuit claiming that MSN violated the law by using “unilateral negative option billing,” which, without notice to subscribers, charged increased fees because of a change in service plans.

Two of the four plaintiffs were from New Jersey, the others from Ohio and New York. They purported to represent 1.5 million members of MSN. When plaintiffs moved to certify the class, MSN argued that the case should be dismissed under the forum selection clause in the contract to which plaintiffs had agreed online.

The Appellate Court Decision
The appellate court quoted freely from Judge Fitzpatrick's opinion in the superior court. He pointed out that the prospective subscriber must view multiple screens of information, including the membership agreement containing the forum selection clause. And, he noted, the potential subscriber must click either “I Agree” or “I Don't Agree” and incurs no charges until he or she completely reviews the membership agreement and clicks on “I agree.”

Relying on Carnival Cruise Lines v. Shute, 499 U.S. 585 (1991), which sustained the cruise company's forum selection clause, printed in small type on the ticket, both New Jersey courts found neither fraud nor “overweening bargaining power” in Microsoft's actions since there are plenty of other ISPs. The courts also ruled that there was no inconvenience in making the plaintiffs go to Washington state, noting that “if the class were certified, many different domestic and international domiciles would also be involved.”

In examining how the clause was presented, the appellate court explained that the plaintiff were “free to scroll through the various computer screens that presented the terms of their contracts before clicking their agreement,” and there was nothing extraordinary about the size or placement of the forum selection clause. “It was the first item in the last paragraph of the electronic document.” And while there were some clauses in caps, most of the contract (including this clause) was in lower case format: “To conclude that plaintiffs are not bound by that clause would be equivalent to holding that they were bound by no other clause either, since all provisions were identically presented.”

But, said the appellate court, its opinion does not extend to the CD version of the MSN contract, since none of the plaintiffs used that method to join the network.