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Caspi v. Microsoft Network LLC. | 732 A.2d 528 (1999)
For a large company with a consumer base that spans the nation, limiting consumer litigation to a specific forum increases predictability and cost-efficiency. Consequently, the company may include a forum-selection clause in its consumer contracts, requiring consumers to file any suits against the company in a specific jurisdiction. We explore the enforceability of such forum-selection clauses in Caspi versus Microsoft Network.
Use of the Microsoft Network, or MSN, an online computer service, required membership. When creating a membership, a user was presented with an online membership agreement and was required to click a box indicating acceptance of that agreement. Among other things, the agreement contained a forum-selection clause stating that any disputes arising from membership must be litigated in King County, Washington.
When MSN increased membership fees without notice, four MSN users initiated a suit in New Jersey against MSN and Microsoft Corporation, which we’ll refer to collectively as Microsoft. The users asserted various claims and sought certification of a class action on behalf of MSN users affected nationwide. Microsoft moved to dismiss the suit, arguing that the New Jersey court lacked jurisdiction because the named plaintiffs, as well as the members of any potential class, were bound by the forum-selection clause limiting jurisdiction to King County, Washington.
The superior court granted the motion to dismiss, and the MSN users appealed to the appellate division.
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