America Online moved to dismiss a claim against it in New York City Small Claims Court because the plaintiff had expressly agreed to exclusive jurisdiction in Virginia in the terms of service agreement. The judge applied the law that forum selection clauses are prima facie valid if actually consented to unless enforcement is unreasonable or unjust, the agreement was reached by fraud or overreaching, or going to the agreed-upon jurisdiction is so onerous that the plaintiff will not have the opportunity to “have his day in court” Scarcella v. America Online Inc., N.Y. Civ. Ct., No. 1168/04, N.Y. Slip Op. 51021(U). 9/09/04. Actual consent to jurisdiction by signature on paper is usually given effect because the signatory is presumed to know the contents of what was signed. British West Indies Guar. Trust Co., Ltd. v. Banque Internationale a Luxenbourg, 567 N.Y.S.2d 731 (1991). However, this Court found that the mode America Online used to elicit agreement to jurisdiction was deceitful and should thus invalidate the forum selection clause. The user was enticed to skip reading the online contract by the statement “Because [the agreement is] lengthy, and while we encourage you to take the time to read [it] now, we understand if you are eager to just go on and explore the service.” Scarcella v. America Online Inc., supra. If one did not click, “I Agree” and wanted to read the agreement, another enticement was given to not read it. While the judge did not find that deception or fraud was involved, her tone indicated that she did not think highly of the manner in which America Online obtained consent.
Instead, she based her ruling on a finding that allowing Virginia sole jurisdiction over the claim would deprive the Plaintiff of the opportunity to have his day in court. The Court ruled that the forum selection clause was invalid because it “contravene[s] a strong public policy of the forum in which suit is brought.” The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972). Small Claims Courts were established in New York City to further the policy of providing a forum for plaintiffs involved in disputes where costs are reduced by pro se prosecution and informal procedures. In exchange, plaintiffs waive the right to a jury trial and to claim more than $3000. The court noted that forum selection clauses in consumer agreements are onerous because they render it unfeasible to pursue a small but legitimate consumer claim. Here, , the plaintiff would have had to travel to Virginia and to retain counsel to pursue a claim that would likely amount to less than the expenses incurred in pursuing the claim. The defendant did not show that Virginia courts would also allow the plaintiff to pursue his claim with the same policy benefits the Small Claims Court offered. Thus, the judge invalidated the forum selection clause on the grounds that it conflicted with the public policy of the Small Claims Court.
