America Online, Inc. v. Superior Court Of Alameda County

108 Cal. Rptr. 2d 699 (2001)

Facts

Mendoza (Ps) for himself and others filed a class action against D seeking compensatory and punitive damages, injunctive relief, and restitution. Ps are former subscribers to D's Internet service who, over the past four years, paid between $ 5 and $ 22 each month for the service. Monthly payments were made by allowing D to debit automatically the credit cards of class members. The class members terminated their subscriptions to AOL but, without authorization, AOL continued to debit their credit cards for monthly service fees. P alleged that he gave D notice of the cancellation of his subscription in October 1999, but AOL continued to charge monthly fees against his credit card at least through February 2000, at which time P canceled his credit card in order to stop the debits. Ps allege violations of California's Unfair Business Practices Act, violations of California's CLRA, common law conversion/trespass, and common law fraud. The complaint also prayed that the action proceed as a class action under Code of Civil Procedure section 382, Civil Code section 1781, and Business and Professions Code section 17204. D filed a motion to stay or dismiss the action on the ground of inconvenient forum. D had a forum selection clause contained in the 'Terms of Service' (TOS) agreement that P agreed to at the time he subscribed to D's proprietary Internet service. The agreement stated that there was exclusive jurisdiction for any claim or dispute with D in the courts of Virginia. It also contained a choice of law provision designating Virginia law as being applicable to any dispute between the parties: 'The laws of the Commonwealth of Virginia, excluding its conflicts-of-law rules, govern this Agreement and your membership.' D claims that the forum selection clause was presumptively valid under California law and that its enforcement would not violate any strong public policy of this state. Ps claimed that the TOS was an unconscionable adhesion contract and that under applicable rules of contract construction, the forum selection clause was unenforceable. Ps also contend that it was in derogation of California public policy. The court ruled for Ps finding that: 1) the forum selection clause was unfair and unreasonable because it was not negotiated, it was contained in a standard form contract, and was in a format that was not readily identifiable by Mendoza; 2) AOL had failed to carry its burden of proving that the consumer rights afforded under California law would not be diminished by enforcement of the clause; and 3) the remedies available to consumers in Virginia were not comparable to those in California. D filed this writ of mandamus. Eventually, it was accepted for review.