The Conflict Between Forum-Selection Clauses and State

Chicago-Kent Law Review

Volume 90 Issue 2 LatCrit Symposium Toward Equal Article 11 Justice in Law, Education and Society

4-10-2015

The Conflict Between orum-SelectionF Clauses and State Consumer Protection Laws: Why Illinois Got It Right in Jane Doe v. Match.com

Marty Gould IIT Chicago-Kent College of Law

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Recommended Citation Marty Gould, The Conflict Between orum-SelectionF Clauses and State Consumer Protection Laws: Why Illinois Got It Right in Jane Doe v. Match.com, 90 Chi.-Kent L. Rev. 671 (2015). Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol90/iss2/11

This Notes is brought to you for free and open access by Scholarly Commons @ IIT Chicago-Kent College of Law. It has been accepted for inclusion in Chicago-Kent Law Review by an authorized editor of Scholarly Commons @ IIT Chicago-Kent College of Law. For more information, please contact [email protected], [email protected]. 36219-ckt_90-2 Sheet No. 164 Side A 03/25/2015 13:32:44 . (Dec. ULL L. B In December AILY 2 Man Gets 90 Days in . D HI Like tens of thou- 1 , C note 3. While convicted of raping raping convicted of note 3. While * supra Despite receiving this written 4 OULD G 671 671 ARTY NTRODUCTION JANE V. MATCH.COMDOE I ) 3/5/2015) 12:41 PM M 3 ., Feb. 25, 2011, 2011, 25, Feb. ., ., Nov. 9, 2010, 2010, 9, Nov. ., ELETE Man Who UsedMan Who Online Dating Site Convicted of Assault: Judge D RIB RIB OT N . T . T Match.com Must Face Dispute over User O HI HI (D , C , C DOCX DOCX . , No. 11 L 3249, slip op. at 1; Karlinsky, GOT IT RIGHT IN GOT IT RIGHT Matthew Walberg, Marc Karlinsky, See OULD FINAL OULD In November 2010, Ryan Logan was found guilty of the criminal sexual of the criminal assault against In Logan was found guilty November 2010, Ryan See THE CONFLICT CLAUSES BETWEEN FORUM-SELECTION Id. Id. Jane Doe 10P - G Jane Doe, a young woman from Chicago, Illinois, signed up for signed up Chicago, Illinois, woman from Jane Doe, a young prior to “match- Doe’s complaint, According to the allegations in Jane AND STATE CONSUMER PROTECTION LAWS: WHY ILLINOIS 2009, Jane and Ryan went on a date in Chicago, and during that date, Jane date, 2009, Jane and Ryan that on a date in Chicago, and during went was sexuallyabused and raped. * The author is an attorney at Romanucci & Blandin, LLC. He graduated from Chicago-Kentof College at Romanucciattorney * The author is an & Blandin, LLC. He graduated from University. Northwestern degree from Law in 2014 and received his bachelor’s The author would like H.to thank Daniel S. Kirschner and Professor Henry and com- Perritt, for their invaluable guidance Jr. ments. and trans- to dismiss, denying judgment, motion for partial summary (order granting plaintiff’s motion 1. L.L.C., op. at 1 (Ill. Cir. Jane Doe v. Match.com, No. 11 L 3249, slip Ct. Oct. 25, 2012) ferring case for further proceedings). 2. 3. Acquits Him in Second Case Jane Doe. http://articles.chicagotribune.com/2011-02-25/news/ct-met-date-rape-sentence-20110225_1_judge- vacates-assault-charges-restraint. 4. Jane Doe, Ryan Logan was acquitted of sexual assault for the J.N. incident that allegedly occurred two assault of sexual Jane Doe, Ryan Logan was acquitted years earlier. http://articles.chicagotribune.com/2010-11-09/news/ct-met-match-com-rape-20101109_1_sexual- assault-judge-acquits-match-com. sands of other Chicago-area Match.comsands of other Chicago-area subscribers, Jane was looking to interests who had similar meet and val- Chicago guy a nice young man—a “matched” Jane Doe with Ryanues. Match.com Logan. 18, 2013), 2013), 18, http://www.corboydemetrio.com/media/publication/58_15454%20Corboy%20reprint%20Dec18- unlaw- of Logan guilty Ryan found vacated the conviction and judge later County The Cook 2013.pdf. a lesser sexual abuse, ful restraint and criminal charge, instead. Jason Meisner, Jail for Sex Abuse, Restraint Match.com, Internet dating website. the well-known ing” Jane Doe and Ryan received Logan, Match.com a written notice from subscribers,another of its Chicago-area female Match.com J.N., alerting that Ryan introduced to one another on Logan raped J.N after the two were the site and met for a social encounter. 36219-ckt_90-2 Sheet No. 164 Side A 03/25/2015 13:32:44 A 03/25/2015 164 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 164 Side B 03/25/2015 13:32:44 5 12 A forum selection A forum 9 To complicate mat- To complicate Generally, the plain- 10 7 , claims of negligence, of , claims [Vol 90:2 90:2 [Vol with several provisions of the inter alia which applies to any contract be- ]. 11 and claims of battery and intentional and claims of battery and intentional 6 ) 3/5/2015) 12:41 PM ELETE D . 615/1 to -55 (West 2008). 2008). (West 615/1 to -55 . directly in conflict litigate any disputes. future OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW NN N O .A (D must Contracts § 259 (2014). TAT Match.com Motion to Dismiss D .S DOCX DOCX . . 2 UR OMP Parts I.A & B. .J , Dawdy v. Union Pac. R.R. Co., 797 N.E.2d 687, 694 (Ill. 2003) (holding that “[a] that (holding (Ill. 2003) 687, 694 , Dawdy Co., 797 N.E.2d v. Union Pac. R.R. .C M LL OULD FINAL OULD at 14. See generally id. Id. See, e.g. 10P - G However, there was one problem: Match.com’s Terms of Use Agree- Match.com’s However, there was one problem: In 2011, Jane Doe filed a civil suit against Match.com and RyanLo- Match.com civil suit against Jane Doe filed a In 2011, . See infra Because Jane was a resident of Illinois, Match.com advertised its ser- 8 12 willful and wanton misconduct, and violation of the Illinois Dating Referral Referral Dating Illinois of the and violation wanton misconduct, willful and Services Act against Match.com, tiff in a civil case has the right to choose the forum in which her dispute to choose has the right tiff in a civil case forum the that has subject chosen is one long as the forum will be heard, so matter controversyjurisdiction over the the defend- and personal jurisdiction over ant. IDRSA—particularly IDRSA’s “anti-waiver” provision. the tween a dating for dating services. enterprise and an Illinois consumer Match.com’s Terms of Use Agreement, including the choice of law and selection clause, is forum (Ill. Cir. Ct. Dec. 23, 2011). 5. L 3249 L.L.C., No. 11 v. Match.com, Jane Doe at 2–5, at Law Complaint Second Amended 6. 7. 672 672 Ryan failed from to remove Match.com Logan, Ryan concerning warning failed to and Department, the Chicago Police failed to contact its service, like customers, warn other Jane Doe, who with Ryan. interacted online ters further, Illinois has a consumer protection statute, called the Illinois ters further, Illinois has a consumer Dating Referral Services Act (IDRSA) 8. 8. 10. 17A A plaintiff’s right to select the forum is substantial . . . [and] should rarely be disturbed”). is . . . [and] should rarely plaintiff’s right to select the forum substantial Cir. Ct.Match.com, L.L.C., v. No. 11 L 3249 (Ill. Jane Doe 1, at cl. 23, at Law at exhibit Complaint 9. Plaintiff’s First Amended to Dismiss Motion L.L.C.’sDefendant Match.com, Section 2-619 July 6, 2011) [hereinafter clause is designating a particular forum—such a provision in a contract as a specific state, county, or court—as the only proper venue in which the parties to an agreement vices to Illinois consumers, Jane used Match.com’s services while in services while consumers, Jane used Match.com’s vices to Illinois occurred in Illinois byIllinois, and the rape Illinois resident—one another would naturally assume thatwould Illinois to decide be the proper venue Jane’s case. selectionment contained a choice required clause that of law and forum any disputes arising out of a subscriber’s use of its website or service to be resolved under Texas law in a Dallas, Texas courtroom. infliction of emotional distress distress against emotional Ryaninfliction of Logan. 11. 815 I gan in an Illinois state court asserting, Illinois state court gan in an 36219-ckt_90-2 Sheet No. 164 Side B 03/25/2015 13:32:44 B 03/25/2015 164 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 165 Side A 03/25/2015 13:32:44 —the relevant —the relevant 17 one of the main one of the main These cases repre- 18 , 16 673 673 Jane Doe v. Match.com ) 3/5/2015) 12:41 PM Brodsky v. Match.com Outside of Illinois, however, federal courts Illinois, however, Outside of Match.com clause forum-selection was valid 13 ELETE D OT N CONSUMER PROTECTIONCONSUMER LAWS O (D other federal courts considering the same issue held considering the same issue held other federal courts 15 DOCX DOCX . , No. 11 L 3249, slip op. at 1. , No. 11 L 3249, slip op. the exact same note 14 and accompanying text. and accompanying note 14 , No. 11 L 3249, slip op. at 7. , 2009 WL 3490277. 3490277. 2009 WL , While the Illinois court permitted the plaintiff to pursue her her pursue court permitted the plaintiff to While the Illinois Gamayo v. Match.com L.L.C., No. C 11-00762 SBA, 2011 WL 3739542, at *1 (N.D. 3739542, 2011 WL L.L.C., SBA, v. Match.com No. C 11-00762 Gamayo OULD FINAL OULD 14 See Jane Doe Brodsky Jane Doe See supra See 10P - G Part I of this Article discusses The issue here is, what is the stronger, more significant interest—the interest—the significant more stronger, is the is, what issue here The the IDRSA issue held that on the to rule court in Illinois The only 17. 17. 18. 18. conflicted with certain provisions of the New York Dating Referral Services Law). 15. 16. 16. have held that and enforceable despite being in direct conflict with similar statutessimilar in oth- in direct conflict with being and enforceable despite er states. sent a split in decision and analysis—pitting the values of individual auton- of individual values sent a split in decision and analysis—pitting the against federalism andomy a state’s right to choose how it protects its citi- that the Illinois court arrivedcitizens. This Article takes the position at the correct result. Match.com cases at odds with the Illinois decision. Part III discusses Match.com cases with the Illinois decision. whyat odds the Illinois case is legal reasonscorrect, the under both Illinois highlighting and federal law. Finally,IV discusses why Part policy public reasons justify the conclusion reached by the Illinois court. and support that, pursuant to Match.com’s forum forum Match.com’s that, pursuant to selection clause, the claims against Match.com must Texas be pursued in a Dallas, court. 14. 13. Jane Doe v. 25, 2012). at 7 (Ill. Cir. Ct. Oct. Match.com, L.L.C., No. slip op. 11 L 3249, 2015] 2015] Cal. Aug. 24, 2011) (Match.com’s terms of use agreement directly conflicted with certain provisions of with certain provisions conflicted directly of use agreement terms (Match.com’s Cal. Aug. 24, 2011) No. 09 Civ. 5328(NRB), L.L.C., v. Match.com Legal Remediesthe California Consumer Act); Brodsky directly terms of use agreement Oct. 28, 2009) (Match.com’s at *4 (S.D.N.Y. 3490277, 2009 WL claims in Illinois, Illinois case. Part II discusses forum state’sforum laws or forum selection clauses that the abrogate forum state’s laws? clause be forum selection should Match.com’s In that vein, to other words, In the IDRSA? in conflict with despite being enforceable stat-consumer protection of state can companieswhat extent out contract selec- of law and forum of choice as utes (such the use the IDRSA) through contracts? adhesion form tion clauses in standard clauses policy, as the stated Illinois public opposing voids forum-selection statutes. declared by Illinois 36219-ckt_90-2 Sheet No. 165 Side A 03/25/2015 13:32:44 A 03/25/2015 165 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 165 Side B 03/25/2015 13:32:44 , 28 at 21 As 20 AZETTE G EWS EWS it is signed The IDRSA The IDRSA , N 19 COM . before and 24 ATCH . M [Vol 90:2 90:2 [Vol OE V 22 D 25 ANE J : ASE ) 3/5/2015) 12:41 PM C 23 ELETE D . 615/1 to -55 (West 2008). 2008). (West -55 615/1 to . 615/15. . To further protect Illinois consumers—and as as consumers—and Illinois protect To further OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW Breaking Dating Service Contract Not Hard to Do Breaking Dating Service Contract Not Hard to NN NN 27 N LLINOIS O .A .A I (D Section 45 of the Act grants injured Illinois consum- Act grants injured Illinois Section 45 of the the customer signs the contract”; TAT TAT 26 HE 2005 WLNR 2195754. 2195754. 2005 WLNR A. The Illinois Dating Referral Services Dating Referral A. The Illinois Act .S .S DOCX DOCX . I. T OMP OMP , No. 11 L 3249, slip op. at 6. hibitions that are mandated by [the] Act . . . . . hibitions that are Act mandated by [the] the time for services for as long as the contracts are in effect and for a for effect and in contracts are as the for services for as long period of 3 years thereafter.” by the customer”; .C .C LL LL available at available OULD FINAL OULD (emphasis added). (emphasis added). § 45. § 35(b). 2. requirements, and pro- The contract contains “all provisions, 3. A copy of the written contract is provided to the customer “ 4. of all contracts “maintain original copies The company must 1. be in writing; The contract must Jane Doe Id. Id. Id. Id. Id. Id. 10P - G In addition to these technical requirements, the IDRSAIn addition to these technical requirements, also containsa In 1991, the Illinois state legislature enacted the IDRSA. enacted the Illinois state legislature In 1991, The language in the IDRSA is The language in To be valid and en- straightforward. particularly relevant here—the IDRSA mandates that waiver “[a]ny by here—the IDRSA mandates particularly the relevant and unenforceable.” be void of the provisions of this Act shall customer ers the right to recover an amount equal to three times actual damages, plus actual damages, equal to three times amount recover an ers the right to costs and attorney fees. The IDRSA’s “anti-waiver” provision is of particular because itimportance represents the Illinois legislature’s intention to explicitly forbid Illinois to or “waiving” the very “contracting out” laws designed consumers from 19. 815 I 674 674 20. 20. 23. 24. 25. 26. 27. 28. Illinois Attorney General dating and similar stated, “Online Lisa Madigan and Consumers who try them . . . services are just like anyother business. laws.” consumer protection the Illinois have certain rights under use them 21. Christine des Garennes, was enacted was enacted referral dating citizens using to protect Illinois services. Feb. 15, 2005, 2005, 15, Feb. 22. 815 I remedies provision. remedies forceable, a referral servicescontract between a dating company an and has to Illinois consumer meet a number of requirements, including: 36219-ckt_90-2 Sheet No. 165 Side B 03/25/2015 13:32:44 B 03/25/2015 165 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 166 Side A 03/25/2015 13:32:44 void contract 36 . 605/8 (West 605/8 (West . NN Given that Given that every .A 34 TAT .S OMP . [hereinafter (2006) 9, 12–13 .C EV 675 675 LL . L.A. L. R OY note 29, at 13 n.8 (citing numerous state consumer state consumer numerous n.8 (citing at 13 note 29, , 40 L the Illinois court held that Match.com’scourt the Illinois note 9, at exhibit 1, at cl. 7, 8(b) & 21. supra Constraining Opt-Outs: Shielding Local Law and Those It Law and Those Opt-Outs: Shielding Local Constraining , ) 3/5/2015) 12:41 PM supra If a contract for dating referral services does services If a contractfor dating referral , ELETE 32 and in consumer protection statutes in many statutes in many consumer protection and in D . 615/15. 615/15. . 30 ]. OT NN N CONSUMER PROTECTIONCONSUMER LAWS O .A (D of the provisions of the IDRSA, the contract is IDRSA, the contract of the of the provisions TAT 33 . .S any DOCX DOCX . . 390/25 (West 2008) (“Any provision of any contract any which purports to waive provision of 2008) (“Any . 390/25 (West Constraining Opt-Outs Constraining it is not surprising that the contract failed to comply with a with a to comply contract failed it is not surprising that the Anti-waiver provisions are quite common in Illinois con- Illinois in common are quite provisions Anti-waiver NN OMP 35 William J. Jr., Woodward, 29 , Illinois Credit Services Organizations Act, 815 I .C .A 31 LL B. Match.com’s Terms of Use AgreementB. Match.com’s Terms Violates the IDRSA OULD FINAL OULD TAT § 35(c). § 35(c). Constraining Opt-Outs Jane Doe v. Match.com, .S See also Id. Match.com Motion to Dismiss See, e.g. 10P - G In The provisions and requirements of the IDRSA apply to of the and requirements The provisions Match.com’s of Terms Use Agreement failed to comply with the OMP .C LL Protects from Adhesive Choice of Law Clauses 35. Jane Doe v. Match.com, at 5 (Ill. L.L.C., No. Cir. Ct. Oct. 25, 2012). slip op. 11 L 3249, 2003). 36. Cir. Ct. June 18, slip op. at 4–5 (Ill. v. 11534, Fertelmeyster Match.com, L.P., 02 CH No. Match.com’s of Use Agreement Terms was “designed to apply in to users all 50 states,” Woodward, Woodward, 30. 30. number of the requirements set forth in the IDRSA. Moreover, the of the requirements set forth in number Match.com’s to failure IDRSA under the meet the was alsorequirements 2003 ap- Match.com, as another Illinois court in surprise to no likely of proved a settlement in agreement which Match.com agreed to correct the subscription agreements. future alleged contractual violations in its 29. 29. 2015] 2015] them. protect 31. Woodward, Woodward, Act shall be null and void”). provision of this any 31. sumer protection statutes protection sumer 2008) (“Any waiver by a buyer of the provisions of this Act shall be deemed void and unenforceable by unenforceable void and Act shall be deemed of this of the provisions a buyer waiver by 2008) (“Any a credit services organization as contrary Illinois Pre-Needto public policy”); Sales Cemetery Act, 815 I 33. 33. 34. not comply with with not comply and unenforceable other states. Terms of Use Agreement was void and unenforceable in its entirety be- in its entirety and unenforceable of Use Agreement was void Terms cause it was in conflict with the IDRSA and “the strong public policyun- for dating referral services. referral for dating protection statutes that forbid the waiver provide). of the protections they 32. 815 I IDRSA in several ways. On its face, the Terms of Use to Agreement failed example, requirements. For of themeet a number above-listed of damages limitation Match.com’s exculpatory contract contained and remedies provision, contradiction to the IDRSA’s provisions in direct equal to three amount to recover an customers Illinois which allows injured times actualplus costs damages, and attorney fees. 36219-ckt_90-2 Sheet No. 166 Side A 03/25/2015 13:32:44 A 03/25/2015 166 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 166 Side B 03/25/2015 13:32:44 39 Be- 45 40 43 Forum selec- 42 In these situations, In these situations, 44 [Vol 90:2 90:2 [Vol note 9, at exhibit 1, at cl. 23. note 29, at 13. note 29, note 29, at 13. A typical forum selection clause A typical forum may supra supra , , 41 note 9, at exhibit 1, at cl. 23. supra The court found that by Tex- designating found that The court , ) 3/5/2015) 12:41 PM 38 supra , ELETE D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N While there were several violations of the Act, the the Act, of violations were several there While O 37 (D Constraining Opt-Outs Constraining DOCX DOCX . Constraining Opt-Outs Match.com Motion to Dismiss , No. 11 L 3249, slip op. at 4. , C. Complicating the Decision with Conflicts of Law Issues Decision with Conflicts of Law Issues C. Complicating the Woodward, Woodward, OULD FINAL OULD Gamayo v. Match.com L.L.C., No. C 11-00762 SBA, 2011 WL 3739542, at *6 (N.D. 3739542, 2011 WL SBA, L.L.C., v. Match.com No. C 11-00762 Gamayo Match.com Motion to Dismiss Jane Doe Id. Id. Id. See See, e.g. See 10P - G Complications also arise when a choice of law clause enters into the Complications arise when a choice of law clause enters into the also Although the Illinois court’s decision seems straightforward, it is far straightforward, decision seems Illinois court’s Although the Cal. Aug. 24, 2011). Woodward, 44. 45. read: “If there is anyread: “If there is be must concerning this Agreement, suit dispute in a state or federal court in Texas.” brought [exclusively] choice of law clauses combined selection with forum can clauses, serve as waiver the “functional equivalent of [a] the use of the term.” without Illinois court paid particular attention to Match.com’s violation of the the violation of to Match.com’s attention particular paid Illinois court IDRSA’santi-waiver provision. as as the exclusive forum and imposing Texas law on as as the and imposing consumers, Illinois forum exclusive Match.com’sselection forum of law clauses and choice im- constituted an permissible waiver by customer the of of the all the provisions IDRSA. 37. 37. 676 676 statute.” derlying [the] of law selection and choice that if it enforced the forum The court reasoned that the Illi- lose protections clauses, users in Illinois would “Match.com IDRSA.” [the] through enacting for them nois legislature created 38. 38. 39. 40. 41. 42. 42. 43. 43. tion clauses designate which forum a dispute between the parties must be dispute between the parties a must tion clauses designate which forum be Match.comapplied. Therefore, heard, but not the law that must argued transfersthat if Illinois Jane’s case to Texas, Illinois public policy as declared by the IDRSA not necessarily would be violated because Texas void. law and find the contract apply Illinois courts could still mix. While Match.com’s Terms of Use Agreement did not contain an actu- contain an did not of Use Agreement Match.com’s Terms mix. While al “waiver” of the provisions of the IDRSA (i.e., the contract did not require Jane to forgo any protections provided under Illinois law), it did that all disputes arising betweeninclude a choice of law clause stating the parties would be governed bythe laws of Texas. from it. Complications arise from the use of both forum selection and the it. Complications arise from use of both forum from in a choice of law clauses contract. 36219-ckt_90-2 Sheet No. 166 Side B 03/25/2015 13:32:44 B 03/25/2015 166 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 167 Side A 03/25/2015 13:32:44 The The Only 52 49 , the Illinois , the Illinois Relying on fed- Relying Accordingly,in 53 48 46 677 677 Jane Doe Jane Doe Match.comv. relied, in part, on this argument when it ) 3/5/2015) 12:41 PM ELETE D 50 In rejecting the contention that the enforcement In rejecting the contention that the OT N CONSUMER PROTECTIONCONSUMER LAWS 55 , the Illinois court first held that the validity, the Illinois court of the O Therefore, in Therefore, (D 47 DOCX DOCX The court held that it was for Texas to determine for Texas “which to determine The court held that it was . 54 (Match.com (Match.com this argument). makes at *3. OULD FINAL OULD at 13–15. at 14. at 3. at *6. Gamayo v. Match.com Id. Id. Id. Id. See id. Id. See id. Id. By focusing on just the forum selection clause, Match.com can 51 10P - G Conversely, some federal taken an entirely courts have different ap- Conflicts of law issues concernConflicts with one states have the relationship eral precedent, the court presumed theeral precedent, the court presumed enforcement of forum selection clauses and completely sidestepped any choice of law considerations or determinations. after it determined whether the Match.comafter it determined contract as a whole, was valid consider the validitywould the court then specific forum of the selection clauses. and choice of law court in transferred the plaintiff’s case from Californiatransferred the plaintiff’s to Texas. case argue that if the forum state transfers argue that if the forum Jane’s case to Texas, Illinois public policy as declared bythe IDRSA would not necessarily be violated because law and find the contract void. Texas courts could still apply Illinois state’s laws apply . . . .” 46. 46. 2015] 2015] Match.com’scause “waiver”the IDRSA’s of in came provisions the form arose. of law issues of law clause, conflicts of a choice 47. 47. court could not simplycourt could issue decide the contracts of Match.com’swhether of Use Agreement Terms first had to determine was valid. Rather, the court the conflicts of law issue, asking whether law of Illinois law (the the fo- designated or Texas law (the law law clause) gov- of byrum) the choice erned the validityparties. contract between the of the 49. 48. Jane Doe v. Match.com, at 4 (Ill. No. L.L.C., Cir. Ct. Oct. 25, 2012). 11 L 3249, slip op. Jane Doe v. Match.com law. law and not Texas by Illinois determined contract should be 50. 50. 2011). 24, Aug. 51. Cal. at *6 (N.D. 3739542, SBA, 2011 WL No. C 11-00762 L.L.C., v. Match.com Gamayo 52. 54. 53. 53. 55. of Match.com’s forum selection clause would contravene California’s pub-of Match.com’s proach to the same choice of law issues,proach to the leading to different results for the one California federal court (dealing with plaintiffs involved. For example, contract Match.com at issue in the Jane Doe case) transferred the the same plaintiff’s case to Texas before it determined whether the contract was even valid. another. Each state has its another. those with- rules governing protections and own in their jurisdiction. 36219-ckt_90-2 Sheet No. 167 Side A 03/25/2015 13:32:44 A 03/25/2015 167 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 167 Side B 03/25/2015 13:32:44 59 Erin see also see available at In theory, theory, In 62 57 for fraud, fraudu- 360 (Dec. 19, 2013), 2013), 19, 360 (Dec. AW (2013–2014), (2013–2014), , L Jane Doe v. Match.com [Vol 90:2 90:2 [Vol g plaintiffs’ claims g plaintiffs’ claims ELLHOLES and the plaintiffs’ claims were when determining whether the whether when determining 60 H Match.com, L.L.C., No. 3-09-CV-2066-F-BD., Match.com, “[O]nce in the proper venue, the in the proper “[O]nce , Malsom v. , Malsom 540 F. App’x. 412Match.com, L.L.C., 56 UDICIAL aff’d ) 3/5/2015) 12:41 PM ., J ELETE A similar outcome A similar resulted in several other OUND D 61 OT F CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O , Texas law applied, which generally affords fewer (D , when the plaintiffs’ case was transferred, it was un- , 2010 WL 3895513, at *3 (dismissin 3895513, , 2010 WL EFORM Jane Doe v. Match.com DOCX DOCX at *2 (discussing Brodsky v. at *2 (discussing Brodsky . R Brodsky ORT , 2012 WL 3263992, at *19, at *19, 3263992, WL 2012 , id. , Gamayo , Gamayo . T OULD FINAL OULD (citing Besag v. Customer Decorators, Inc., No. C 08–05463 JSW, 2009 WL 330934, at 330934, (citing Besag v. 2009 Customer JSW, WL Inc., No. C Decorators, 08–05463 (quoting Mazzola v. Roomster Corp., No. CV 10–5954 AHM (JCGx), 2010 WL 4916610, 4916610, Corp., AHM (JCGx), 2010 WL No. CV 10–5954 (quoting Mazzola v. Roomster In MER 58 See, e.g. Robinson Id. Id. See, e.g. 10P - G However, the notion that the Texas court will apply the forum court’s forum court will apply Texas the the notion that the However, The Illinois court’s choice of law decision in Calif.’s ‘Judicial Tell Full Story Hellhole’ Ranking Doesn’t lent inducements, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices of the and violations negligent lent inducements, misrepresentation, Act, which were all initially filed in New York federal court under New York law). (5th Cir. 2013) (applying Texas law). 62. dismissed with prejudice. dismissed http://www.judicialhellholes.org/wp-content/uploads/2013/12/JudicialHellholes-2013.pdf; http://www.judicialhellholes.org/wp-content/uploads/2013/12/JudicialHellholes-2013.pdf; http://www.law360.com/articles/497438/calif-s-judicial-hellhole-ranking-doesn-t-tell-full-story. http://www.law360.com/articles/497438/calif-s-judicial-hellhole-ranking-doesn-t-tell-full-story. 61. 56. 56. The applicability of state law to different results for the can lead plaintiffs involved. In 678 678 the statutes, lic policy protection its consumer by as declared rea- court law the as to which “required speculation such an argument soned that apply.” would ultimately transferee consumer protections than California laws, [p]laintiff is free to argue for the application of California law.” California of for the application is free to argue [p]laintiff law instead of Texas federal court applied Texas surprising that the claims of the plaintiffs’ were based pri- though many California law, even protection statutes. California consumer marilyon protections afforded by *14 (N.D. Cal. Feb.10, 2009)). 2009)). Feb.10, Cal. *14 (N.D. 57. at *3 (C.D. Cal. Nov. 30, 2010) (quotation marks omitted)). at *3 (C.D. Cal. Nov. 30, 2010) (quotation marks 58. contract was valid under Illinois law rather than Texas law. MoreIllinois law rather than under contract was valid often transferee the cases are transferred court’s to a new forum, than not, when laws are applied, particularly is a provision in- choice of law when there volved. this argument has some some has this argument merit. laws is a fallacy Illinois the accuracy in practice, underscoring the of court’s decision in 2010 WL 3895513, at *1 (N.D. Tex. applied Texas law to 2010), where a Texas federal court Sept. 30, 3895513, 2010 WL filed in New York under New was originally case the against Match.com, though even plaintiffs’ claims transferred to Texas by the New York federal laws and later contract protection and York consumer court). 59. n.1 (N.D. Tex. *1 at 3263992, L.L.C., WL 3:10-CV-2651-L, 2012 v. Match.com, Robinson cases against Match.com,consumer which were originally filed in more friendly states, such as New York, and later transferred to Texas. was correct forselection two additional reasons. First, enforcing a forum Coe, Aug. 10, 2012). 2012). 10, Aug. they represent, argues that Califor- and the consumers firms injury personal laws favorable to plaintiff’s 60. AssociationThe American (ATRA), to criticizing an Tort Reform organization dedicated nia is the worst “judicial hellhole” for businesses in consumer part because of its “plaintiff-friendly laws.” A 36219-ckt_90-2 Sheet No. 167 Side B 03/25/2015 13:32:44 B 03/25/2015 167 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 168 Side A 03/25/2015 13:32:44 63 , the forum 66 Illinois’s reason- Illinois’s 68 First National Bank v. First 679 679 In “the significant most 65 application of the law of law of the application an, 739 (Ill. 2000). N.E.2d 1263, 1269–71 § 187(2)(b) (1971) (emphasis added). AWS unless . . . unless L ) 3/5/2015) 12:41 PM no forum selection clause exists no forum selection 69 ONFLICT OF ONFLICT ELETE C D OF OT ) Illinois courts are prohibited from “rely[ing] on “rely[ing] Illinois courts are prohibited from N CONSUMER PROTECTIONCONSUMER LAWS case, Illinois courts have refused to apply the law to apply the law have refused case, Illinois courts O 67 , (D would be contrary to a fundamental policy of a state to a fundamental would be contrary ECOND (S DOCX DOCX . ,Townsend v. Sears, Roebuck & Co., 879 N.E.2d 893, 905 (Ill. 2007).,Townsend v. Sears, Roebuck & Co., 879 N.E.2d 893, 905 , Scentura Creations, Inc. v. Long, 756 N.E.2d 451, 456–57 (Ill. App. Ct. 2001). Morris & Assocs., B. Chapman Ltd. v. Kitzm OULD FINAL OULD Generally contract speaking, in most cases, Illinois courts follow ESTATEMENT 64 See, e.g. See Id. See, e.g. 10P - G Under conflict of law principles, when there is a dispute regarding dispute regarding is a when there of law principles, Under conflict Nevertheless, while there is much to be said about the best order in about to be said Nevertheless, while there is much However, when selection there is a forum the clause, as there was in The law of the state chosen by the parties to govern their contractual govern to parties state chosen by the of the The law . . . will be applied duties rights and the chosen state the chosen state deter- a materially greater interest thanthe chosen state in the which has 188, rule of § the under which, issue and of the particular mination of an effective state of the applicable law in the absence be the would the parties. of law by choice added). App. Ct. 1994) (emphasis 64. (Ill. 1286 of Ill., 643 N.E.2d 1280, Co. v. Nat’l Ben Franklin Ins. of Mount Carmel Soc’y 65. 1997). R 67. (Ill. 1182 Malpractice Research, Inc., 688 N.E.2d 1179, v. First Nat’l Bank of Springfield 68. 69. 66. 66. ing is drawn in part from the Restatement (Second) of Conflict of Laws § the Restatement ing is drawn in part from which states: 187(2), 63. 63. 2015] 2015] was contract that whether determining before clause in the first valid even the Illi- notably, the “cart beforeplace puts and most the horse.” Second, and Illinois precedent followed clear nois decision law rules. choice of lens of basic conflict the can be better of understood through This holding of law principles. law and choice which state’s laws to apply and relationship” analysis, public courts will also consider the state’s Illinois the litigation. policies impact and how those principles policy the Restatement (Second) of Conflict of Laws and applythe Restatement (Second) signifi- the “most where the lawcant relationship rule,” of the state that is most significantly of the litigation applies. related to the outcome foreign law to a contract that is illegal in the enforce and Illinois has forum, of the controversy.” outcome in the the stronger interest which courts should decide these conflicts of law disputes (and the differ- which courts should decide these conflicts by various state and federal courts), ent conflicts of law approaches used Jane Doe v. Match.com is at odds with Illinois selected when the contract or provision of the forum Court held in Illinois Supreme As the public policy. Malpractice Research court determines the governing law by using its own choice of law ap- choice of governing law by using its own the court determines proach. 36219-ckt_90-2 Sheet No. 168 Side A 03/25/2015 13:32:44 A 03/25/2015 168 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 168 Side B 03/25/2015 13:32:44 COM . In response, ATCH From the legal From 71 74 .M if the clauses contravene , former Match.com sub- , former Match.com [Vol 90:2 90:2 [Vol RODSKY V B : Brodsky ASE C In 70 . ) 3/5/2015) 12:41 PM EDERAL F 73 ELETE Instances of where the enforcement a forum is one of the primary Match.com cases at odds D Jane Doe 76 OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW ORK court stated that, pursuant to federal precedent, N O Y (D EW EW DOCX DOCX N . Brodsky HE Like in the Illinois case, Match.com’s contract with its New 72 Brodsky v. Match.com L.L.C., No. 09 Civ. 5328(NRB), 2009 WL 3490277, at *4 09 Civ. 5328(NRB), 2009 WL v. Match.com L.L.C., No. Brodsky II. T OULD FINAL OULD at *1. at *4. at *3–5. at *2–3. at *2. court held that the forum selection clause was valid and selection clause court held that the forum enforcea- See Id. Id. Id. Id. Id. Id. 10P - G Brodsky v. Match.com Despite this Law, with the Dating Services failure to comply the Under federal law, this presumption can be rebutted only if the plain- 75 with the Illinois decision, with the Illinois decision, standpoint, the standpoint, the claus- selection forum of enforcing favor in presumption there is a strong es. York subscribers failed to with several requirements comply of New York’s Dating Services Law. tiff establishes that the enforcement of the forum selection clause would be selection clause would of the forum tiff establishes that the enforcement “unreasonable or unjust.” (S.D.N.Y. Oct. 28, 2009). 28, 2009). Oct. (S.D.N.Y. 71. 70. 70. 680 680 and of arguments in support made the policy focus on only will this Article clauses. The of law of choice policy in arguments enforcement against the of in support those closelyof law clauses enforcing choice favor of mirror selectionforum clauses, where, as indicatedthe at this outset of Article, effi- economic and autonomy of individual pitted the values courts have it protects its to choose how right and a state’sciency federalism against consumers. Match.com filedMatch.com District of to transfer the case to the Northern a motion Texas pursuant to the forum selection Terms in Match.com’s clause of Use Agreement. 72. 72. 73. scribers fileda New in Match.com against a class action lawsuit in 2009 their ex- arising from alleging various causes of action York federal court periences with and service. the online dating website 74. 74. 75. 75. 76. 76. selection clausethe clause was incor- (1) if would be unreasonable include: of fraud or overreaching; (2) if for allporated into the agreement because practical purposes the plaintiff would be “deprived of his day in court, due (3) if the selected forum”; or unfairness of the to the grave inconvenience plaintiff would be deprived of a remedy; and (4) “ Brodsky justifications. public policy and ble—advancing both legal 36219-ckt_90-2 Sheet No. 168 Side B 03/25/2015 13:32:44 B 03/25/2015 168 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 169 Side A 03/25/2015 13:32:44 court court In the In the 84 court’s legal Brodsky 78 its policy of enforc- its policy Brodsky 681 681 The first policy argument 82 Any exceptions to the pre- to the exceptions Any of Lloyds, 996 F.2d 1353, 1361 (2d Cir. Cir. (2d 1361 1353, F.2d 996 Lloyds, of 77 .” When the New York federal court New York federal When the simply by simply a statute peculiar invoking does not override does not override In that regard, once parties reach an 79 83 ) 3/5/2015) 12:41 PM This is where the 81 ” . ELETE However, after weighing the interests for and However, after weighing D 80 OT N CONSUMER PROTECTIONCONSUMER LAWS O (D validly assented Permittingreason,” such behavior “defies as a plaintiff 85 court relied on two familiar public policy arguments— policy public familiar court relied on two DOCX DOCX . OULD FINAL OULD Brodsky (emphasis added) (quoting Roby v. Corporation Roby added) (quoting (emphasis at *2–4. at *4. (emphasis added). at *4. Id. Id. Id. Id. See id. Id. Id. Id. Id. 10P - G The In enforcing Match.com’s forum Match.com’sIn enforcing selection forum clause, the 79. 79. 80. 1993)). 1993)). 78. 81. 81. 82. 82. 83. 84. 84. 85. analyzed and then rejected each of the exceptions that could rebut the pre- analyzed could rebut that each of the exceptions and then rejected in favor of enforcement. sumption individual autonomy and economic efficiency—in the pre- that concluding and economic autonomy individual outweighed New York’s interest in pro- enforcement of sumption in favor tecting its consumers and its laws. enforcing justification for enforcing Match.com’sjustification for enforcing forum clause selection the (i.e., public intertwined with its enforcement) federal presumption of in favor justifications. policy was essentially and negotiate the have the right to contract that individuals exchang- with one another, freely of their commercial relationships terms state) for another ben- parties to sue in a specific (requiring one benefit ing efit (lower prices for consumers). considered the public policy exception, it acknowledged that “[t]he State of “[t]he that acknowledged it exception, the public policy considered New York no doubt has great interest a and in its consumers in protecting seeing its laws enforced.” 77. 77. 2015] 2015] state the forum of policy public a strong “may circumvent forum selection . . . clauses merely byclauses stating claims un- . . . circumvent“may selection forum court’s words: “plaintiffs cannot avoid compliance with the forum selection with the forum compliance “plaintiffs cannot avoid court’s words: clause to which they against enforcement, the court concluded that “New interest in pro- York’s the court concluded against enforcement, and businesses tecting its consumers ing forum selection clauses ing forum to the forum to the forum in which they filed suit (expressly in defiance of the forum selection clause).” sumption of enforceability are to be narrowly construed. are to be narrowly sumption enforceability of agreement, they cannot then change the terms of the agreement when they terms agreement, they change the cannot then to the unfair not only such behavior is to do so; merely convenient find it contracting parties and their expectations, but goes against basic contract of their agreements. to the terms law principles holding parties 36219-ckt_90-2 Sheet No. 169 Side A 03/25/2015 13:32:44 A 03/25/2015 169 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 169 Side B 03/25/2015 13:32:44 This This 86 Under- 93 However, 87 91 Further, the Further, the 88 EASONS R EGAL [Vol 90:2 90:2 [Vol :L The public policy exception The public 92 IGHT 89 R T I OT G ) 3/5/2015) 12:41 PM Federal and state courts, including those in those in including Federal and state courts, ELETE 90 D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW LLINOIS LLINOIS N I of Forum Selection Clauses O (D HY court and legitimate” that it was “reasonable explained misinterprets the existing federal law misinterprets the broad ap- and existing federal the DOCX DOCX . III. W Part III.B. III.B. Part Part III.A.1.iii. Part III.A.1.i-iii. Part IV.A. IV.A. Part , 2009 WL 3490277, at *4. at *4. 3490277, 2009 WL , Brodsky , 996 F.2d at 1363. , 996 F.2d at 1363. OULD FINAL OULD Brodsky (quoting Roby v. Corp. of Lloyd’s, 996 F.2d 1353, 1360 (2d Cir. 1993). 1993). Cir. 1360 (2d 1353, 996 F.2d of Lloyd’s, Corp. v. Roby (quoting See infra Roby See infra Brodsky Id. See infra Id. See infra A. There is a “Public Policy” Exception to the Presumption in Favor Exception to A. There is a “Public Policy” 10P - G The second policy argument involved economic efficiency economic and practi- involved policyThe second argument But A number of federal courts have enforced forum selection clauses in courts have enforced forum of federal A number 93. 93. 91. 91. 92. 88. 88. 90. 89. 89. plication of the public policy exception by exception courts. Moreover, while the state policy public plication of the reasons justifying clauses selection public policy of forum the enforcement certainly have merit, particularly continues to inno- as the world economy they fail to respect the well-establishedvate and globalize, principles of federalism. conflict with state consumer protection laws on the grounds that forum selection clauses are presumptively pursuant to fed- valid and enforceable eral and state common law. standing the historical development of forum selection at clauses development of forum historical both the standing the court stated that Match.com had “no practical alternative than to include a than to alternative had “no practical Match.com court stated that oth- since selection Agreement, of law clause in its User forum choice and erwise Match[.com] could potentially in any subject to suit be of the fifty its website or service.”states arising from appears to be designed to acknowledge concerns of federalism. Illinois, have held that forum selection clauses are presumptively valid and enforceable “unless unreasonable under the circumstances.” these same courts have also repeatedly held that the presumption is not exception. absolute; there is a public policy 86. 86. 682 682 byrecognized not der laws the agreement.” in selected the forum behavior ultimately amounts to forum shopping by the plaintiff. by the shopping to forum ultimatelybehavior amounts 87. 87. cality. The and service operates a website which for Match.com, available “to users its service arising from that disputes to require anywhere country,” the in where the companybe resolved in Texas, is headquartered. 36219-ckt_90-2 Sheet No. 169 Side B 03/25/2015 13:32:44 B 03/25/2015 169 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 170 Side A 03/25/2015 13:32:44 valid , a German The contract 99 Francis M. Dougherty, prima facie During transport, During transport, 100 see also 97 . 683 683 is misguided. is misguided. Brodsky Courts . view of the judicial why (discussing 663, 666 (1997) L. L This change in attitude is reflected in the is reflected This change in attitude in the ) 3/5/2015) 12:41 PM ’ 96 The theory underlying this view was that M/S Bremen Off-Shore v. Zapata 94 ELETE D OT 101 In RANSNAT However, the judicial hostility se- toward forum N CONSUMER PROTECTIONCONSUMER LAWS Forum Selection Clauses: Problems of Enforcement in Diversity Cases Forum Selection Clauses: Problems 98 O 95 (D . J. T M/S Bremen v. Zapata Off-Shore M/S Bremen v. Zapata DOCX DOCX 404, 409–14 (1984) (citing numerous state court invalidat- cases pre-1972 that (1984) (citing numerous 404, 409–14 . OLUM TH , Carbon Black Export, Inc. v. S.S. Monrosa, 254 F.2d 297, 300–01 (5th Cir. 1958) (5th Cir. 1958) , Carbon Black Export, Inc. v. S.S. Monrosa, 297, 300–01 254 F.2d 1. Historical Development of Forum Selection Clauses Selection Development1. Historical of Forum , 35 , C OULD FINAL OULD Young Lee, Note, at 2. Validity of Contractual Provision Limiting Place or Court in Provision Limiting ActionWhich Validity of Contractual May Be at 4, 13, 17. 17. at 4, 13, at 3–4. a. Presumption in Favor of Forum Selection Clauses in Federal Favor of Forum Selection Clauses a. Presumption in Id. Id. Id. Id. See, e.g. See , 31 A.L.R. 4 10P - G The Court declined to follow the traditional attitude regarding forum The Court declined to follow Historically, most federal and state selection forum courts viewed In 1972, the United States Supreme Court addressed In 1972, the United States Supreme the validity of fo- (“agreements in advance whose object is (“agreements of controversy to oust the jurisdiction of the courts are contrary to public policy and will not be enforced.”). 96. and State Courts forum selection clauses began to change in the century). mid-twentieth selection clauses began to change forum 98. 97. 1, 9–10. 407 U.S. at 99. 100. 101. Annotation, Brought 94. 407 U.S. 1, 9 (1972); v. Zapata Off-Shore Co., M/S Bremen 2015] 2015] law today of the current state and the level and state federal light can shed in on why and reasoning holding the between the selection clauseparties included a forum that all mandating a supposed the agreement take place in London, from litigation arising admiraltyneutral forum with an expertise in disputes. landmark case of the American company’sdamaged off the coast of Florida. The the American rig was companyAmerican disregarded the forum selection clause and brought suit court. in a Florida federal ed forum selection clauses on the grounds that they were contrary to public policy). to public policy). were contrary they selection clauses on the grounds that ed forum 95. ship towing company entered into a contract with an American company American entered into a contract with an ship towing company to Louisiana to Italy. drilling rig from tow an ocean-moving lection clauses began to fade in the 1950s, as some courts embraced the to fade in the 1950s, as somelection clauses began embraced courts of contract. notion of freedom forum permittedselection clauses forum to impermissibly private parties “oust” through jurisdiction of a court established or statutorily the constitutionally contractual agreement. selection clauses, instead holding “ that such clauses are clauses with hostility, often refusing to enforce them because they clauses with hostility, them refusing to enforce often were “contrarypublic policy.” to rum selections clauses. selections rum 36219-ckt_90-2 Sheet No. 170 Side A 03/25/2015 13:32:44 A 03/25/2015 170 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 170 Side B 03/25/2015 13:32:44 , federal , federal discussed discussed invalid and 104 Bremen Forum-Selection Clauses Forum-Selection Clauses Only a handful of Onlyof a handful per se 108 Most state courts, in- Most state courts, 106 [Vol 90:2 90:2 [Vol “no longer treat[s] outbound forum forum treat[s] outbound longer “no its analysis has had an enor- 105 Enforcing Forum Selection Clauses in State in State Enforcing Forum Selection Clauses L.J. 51, 72 (1992) (stating that only “[a] handful “[a] handful (stating that only L.J. 51, 72 (1992) L ’ High Life Sales Co. v. Brown-Forman Corp., 823 High Life Sales Co. v. Brown-Forman Prof’l Ins. Corp. v. Sutherland, 700 So. 2d 347, 350 350 2d 347, So. 700 Prof’l Ins. Corp. v. Sutherland, NT I on this issue to be persuasive.”); Walter W. on this issue to be persuasive.”); Heiser, W. Walter ) 3/5/2015) 12:41 PM see also The of Forum Public Policy Exception the Enforcement to see also ORNELL have followed the Supreme Court’s lead Court’s lead the Supreme have followed The Court reasoned that the “oust[er]” reasoned that The Court argu- ELETE D 107 decision federal arose under the courts’ admiral- 102 M/S Bremen OT . 1009, 1013 (1996). (1996). 1009, 1013 . , 25 C CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N note 105, at 276. note 105, EV O (D supra .L. R .L. Bremen note 96, at 680; , 700 So. 2d at 350 (“[T]he courts of almost all . . . jurisdictions . . . now find . . . jurisdictions . . . all courts of almost , 700 So. 2d at 350 (“[T]he . 269 (2009); 265, DOCX DOCX . of state courts have held that contractual vast (“the 361, 371 (1993) majority UQ . EV does not that state mandate outside of courts enforce forum selection provisions EV Following the Supreme in Court decision the Supreme Following 109 supra , Scentura Creations, Inc. v. Long, 756 N.E.2d 451, 456 (Ill. App. Ct. 2001) (“An (Ill. 756 N.E.2d 451, 456 , Scentura Creations, Inc. v. Long, , 34 D , 103 . L. R Michael D. Moberly & Carolyn F. Burr, Michael Mousa Karayanni, Bremen Lee, . U. L. R OULD FINAL OULD at 10 (emphasis added). at 10 (emphasis LA at 12. W See Sutherland See Id. Id. See See See, e.g. b. Presumption in Favor of Forum Selection Clauses in State Courts Favor of Forum Selection Clauses b. Presumption in 10P - G Although the , 45 F , , 39 S , the Supreme Court’s reasoning in Court’s reasoning the Supreme Forum Selection Clauses in State Courts: Limitations on Enforcement After Stewart and Carnival After Stewart and Carnival Limitations on Enforcement Courts: Forum Selection Clauses in State Cruise Selection Clauses express choice-of-law provision contained in a contract will be given effect subject to certain limita- effect contract will be given in a provision contained express choice-of-law tions.”). 108. S.W.2d 493, 496 (Mo. 1992) (holding that Missouri conclude S.W.2d 493, 496 (Mo. 1992) (holding that Missouri of Procedure and the Privatization selection clauses as per se violations of public policy”); Michael E. Solimine, mous impact on subsequent state on subsequent impact litigation. court mous cluding those in Illinois, cluding those in 105. 105. 102. 102. 103. 684 684 to be “unreasonable deemed is enforcement unless be enforced” and should circumstances.” under the Court 104. 104. forum selection clausesforum are valid and enforceable”). 109. 107. 107. declaring forum valid. selection clauses presumptively declaring forum ty jurisdiction in the context of international commercial contracts and thus commercial contracts and international of the context ty jurisdiction in effect on state courts, has had no binding above in Part II. above in Part ment was a “vestigial legal fiction” and had “little place” in a world “little place” in a fiction” and had a “vestigial legal ment was where on a now operate businesses local where overloaded and courts are many global scale. (Ala. 1997) (“ 1997) (Ala. an admiralty context.”). 106. & Burr, Moberly jurisdictions still hold that forum selectionjurisdictions still hold that forum clauses are of states either hold [forum selection] clauses unenforceable per se or seem to apply a presumption to apply a presumption per se or seem selection] clauses unenforceable of states either hold [forum against their validity”). courts adopted a strong presumption across the federal courts that forum courts that forum across the federal a strong presumption courts adopted are validselection clauses exceptions, limited absent several unenforceable. 36219-ckt_90-2 Sheet No. 170 Side B 03/25/2015 13:32:44 B 03/25/2015 170 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 171 Side A 03/25/2015 13:32:44 115 , the Su- , the or judicial deci- Bremen Court “noted that public that public Court “noted In was simply applying , and the decisions of , and the decisions 110 statute statute Bremen The Court deemed that The Court 685 685 111 statutes Jane Doe ) 3/5/2015) 12:41 PM First National Bank of Springfield v. Mal- First National Bank , whether declared by, whether declared ELETE or if the designated forum was so substantially forum or if the designated D the Illinois Supreme Court made clear the Illinois Supreme that con- 112 OT c. The Public Policy ExceptionPolicy Public c. The N CONSUMER PROTECTIONCONSUMER LAWS 116 note 104, at 1017–20 (explaining that “[t]he presumption in favor of that “[t]he presumption (explaining 104, at 1017–20 note , O (D note 104, at 1010–12. note 104, at 1010–12. supra DOCX DOCX . supra , Scentura Creations, Inc. v. Long, 756 N.E.2d 451, 456–57 (Ill. App. Ct. 2001) App. Ct. 2001) (Ill. 456–57 N.E.2d 451, 756 , Scentura Creations, Inc. v. Long, , Gamayo v. Match.com L.L.C., Nos. C 11-00762 SBA, C 11-1076 SBA, C 11-1206 , Gamayo C 11-00762 SBA, C 11-1076 v. Match.com L.L.C., Nos. , 407 U.S. at 15 (emphasis added)., 407 U.S. at 15 (emphasis When holding that Match.com’s forum selection clause was forum When holding that Match.com’s The Court also held that such clauses maybe void and unen- if enforcement would contravene a strong public policy of the if policy enforcement contravene a strong public would Karayanni, 117 OULD FINAL OULD 113 The majorityfederal and stateof jurisdictions agree that a public See, e.g. Id. Bremen See See, e.g. 114 10P - G Illinois is no different. In Illinois is no different. As both federal and state courts have acknowledged, the presumption have acknowledged, federal and state courts As both the public policy exception—an exception recognized by both Illinois and Illinois bypolicyboth the public exception—an exception recognized policy recognition of the public universal federal courts. Given the almost selection clauses,exception to the enforcement of forum whythe two did Match.com cases reach different results? 115. 115. (citing McAllister 17 Ill.v. Smith, 328, that the Illinois 334 (1856)) (noting Court has held Supreme to be “contrary deemed to the selection clauses are invalid and unenforceable if they are that forum local government”). of the public policy 116. First Nat. Bank of (Ill. Inc., 688 N.E.2d 1179, 1182 Springfield v. Malpractice Research, 159 N.E. 250 (1927)). v. Folsom, Schuman-Heink 1997) (quoting 117. SBA, 2011 WL 3739542, at *3 (N.D. Cal. Aug. 24, 2011); Brodsky v. Match.com L.L.C., No. 09 Civ. No. 09 Civ. L.L.C., v. Match.com Brodsky 2011); (N.D. Cal. Aug. 24, at *3 3739542, SBA, 2011 WL at *2 (S.D.N.Y. Oct. 28, 3490277, WL 2009). 5328(NRB), 2009 114. void and unenforceable, the Illinois court in void and unenforceable, the Illinois practice Research, Inc. practice Research, policy exception to the enforcement of forum selection clauses exists. of forum the enforcement policy exception to such clauses may be void if they were obtained by influence fraud, undue means, or unconscionable forceable “ brought suit is forum in which inconvenient or unfair that it would deprive the plaintiff of his or her “day deprive the plaintiff of his or her or unfair that it would inconvenient in court.” 110. 110. 2015] 2015] enforcement of forum selection clauses . . . was not absolute, as the . . . selection clauses forum of enforcement tracts are void and unenforceable if they are “clearly contrary” to Illinois as declared bypublic policy its constitution, its courts. 111. Karayanni, Karayanni, [selection] clauses). to the policy was one of the exceptions set by the Court of forum enforcement 111. 112. 2007). Cir. 384 (2d 378, 494 F.3d Active v. Audio Ltd., M/S Bremen Off-Shore Co., v. Zapata 407 U.S. 1, 13–15 (1972); Phillips 113. preme Court provided a broad outline of the circumstances in which courts courts in which circumstances outline of the provided a broad Court preme may to refuse forum enforce selection clauses. in favor of forum clauses is selection of forum in favor absolute. not sion.” 36219-ckt_90-2 Sheet No. 171 Side A 03/25/2015 13:32:44 A 03/25/2015 171 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 171 Side B 03/25/2015 13:32:44 the the 121 , 127 120 The court sug- The court 125 [Vol 90:2 90:2 [Vol Other federal courts have reiterat- Other federal courts 126 Hall v. Super. Ct., 197 Cal. Rptr. 757, 761–63 (Cal. v. Super. Ct., 197 Cal. Rptr. 757, Hall The New York federal court enforced Some state courts have interpreted the Some state the courts have interpreted 123 with 118 ) 3/5/2015) 12:41 PM note 105, at 306–07. note 105, at 306–07. ELETE Analyzing the difference in federal how some D supra 119 OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW Luv2bfit, Inc. v. Curves International, Inc. International, Luv2bfit, Inc. v. Curves N O (D DOCX DOCX . at 301, 304. 2. Statutory Preemption: A Split Between the Courts Courts the A Split Between Preemption: 2. Statutory Pong v. Am. Capital Holdings, Inc., No. CIV. S-06-2527 LKK/DAD, 2007 WL S-06-2527 LKK/DAD, 2007 Capital Holdings, Inc., No. CIV. v. Am. Pong , (concluding that (1991) Carnival 499 U.S. 585, 595–97 Cruise Lines, Inc. v. Shute, , Moberly & Burr, OULD FINAL OULD The franchiser or, in the alternative, transfer to dismiss moved The court reasoned that to interpret the “anti-waiver provision to to the “anti-waiver provision The court reasoned that to interpret at *1–2. *6. at *3, at *3. 122 See also id. Compare Id. Id. Id. Id. Id. See, e.g. See, e.g. 124 10P - G In the federal case In the federal case Despite the almost universal recognition of the public policy exception exception policy of the public universal recognition almost Despite the 123. 123. 124. 125. 126. 127. the forum selectionthe forum clause was enforceable because there wasselection prohibition against forum no Limitation of Vessel clauses in the language of the Owner’s Liability Act or its legislative history); “[t]he that Ky. 2013) (holding (W.D. 1004 2d F. Supp. 923 Silver’s Inc. v. Nickleson, Long John and state courts the fate have decided at odds selection clauses of forum with state “anti-waiver” the point. of provisions is illustrative scope and application of the public policy broadly thanthe application of scope and more exception their federal counterparts. 119. 119. 120. 657790, at *5–7 (E.D. Cal. Feb. 28, 2007) (holding that a forum selection clause did not violate the not did selection clause a forum that (holding Cal. Feb. 28, 2007) (E.D. *5–7 at 657790, anti-waiver statute in securities fraud actions), Ct. App. 1983) (holding forum selection clause void because it was in conflict with the anti-waiver conflict with the selectionbecause it was in Ct. App. 1983) (holding forum void clause provision in California’s Corporate Securities Law). 121. Inc. v. Curves Int’l Inc.,Luv2bfit, No.Sept. 29, 2008). (S.D.N.Y. 4443961 2008 WL 06 CV 15415(CSH), 122. 118. 118. 686 686 ed the same narrow interpretation—that a statute must expressly prohibit disputes in another forum. agreeing to litigate their the parties from gested that to be held unenforceable, the language of the NYFSA had to unenforceable, the language gested that to be held “implicitly or explicitly” prohibit a New York franchisee from agreeing to resolve their disputes in other forums. the case to a Texas court pursuant to two forum selection clauses contained selection the case to a forum Texas court pursuant to two the parties. in the contract between mean that [the plaintiffs] cannot be required to contractuallymean that cannot be plaintiffs] [the consent to too broad a read- is . . . other than New York case in a forum litigating this York Franchise Sales Act (NYFSA)].” of the [New ing the forum selection clause and transferred the case to Texas, despite the clause and transferred the case the forum selection existence of an anti-waiver provision in New York’s business protection statute. plaintiffs, thirty-five current or former owners of a New York fitness fran- owners of a New York plaintiffs, thirty-five current or former fran- court against a Texas-based a New York federal chise, filed suit in chiser. to the enforcement of forum clauses, selection to the enforcement differ as to thecourts scope of the exception. and application 36219-ckt_90-2 Sheet No. 171 Side B 03/25/2015 13:32:44 B 03/25/2015 171 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 172 Side A 03/25/2015 13:32:44 Ac- 135 and its court, the court, the However, 136 Bremen a Colorado state a state Colorado Morris 128 , or by judicial deci- Relying on the public the public on Relying 687 687 130 137 statute 131 and the numerous Illinois courts and Illinois courts the numerous , the Colorado court held that the em- , the Colorado court As explained by the . 2003)). §(West 8-4-125 133 ) 3/5/2015) 12:41 PM Jane Doe NN Bremen .A ELETE D TAT In that case, the employer attempted to dismiss to dismiss attempted the employer In that case, OT .S N CONSUMER PROTECTIONCONSUMER LAWS 129 O EV (D Morris v.Morris TowersCorp. Financial .R DOCX DOCX OLO . The CWCA also includes an anti-waiver The CWCA also includes an anti-waiver provision, declaring OULD FINAL OULD at 679 (emphasis added) (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)). Adams Reload Co. v. Int’l Profit Assoc., 143 P.3d 1056, 1059 (Colo. App. 2005) (holding (holding App. 2005) (Colo. 1059 1056, Assoc., 143 P.3d Co. v. Int’l Profit Reload Adams at 679. 134 (citing Lambdin v. Dist. Ct., 903 v. Dist. (citing P.2d 1126 (Colo. 1995)). Lambdin (quoting C The public policy of the forum, here Colorado, was embodied in in was embodied here Colorado, of the forum, The public policy Id. Id. Id. Id. Id. Id. Id. Id. Cf. 132 10P - G Illinois and Colorado courts are not alone in their decisions. Other decisions. alone in their Colorado courts are not Illinois and Like the Illinois court in Like the Illinois By in contrast, ployer’sselection forum clause was void because it violated the strong in the CWCA and in con- was directly embodied of Colorado public policy anti-waiver provision. flict with the CWCA’s its statutes, such as the CWCA. had there been no express anti-waiver provision prohibiting employers and provision prohibiting employers had there been no express anti-waiver with to waive compliance attempting from employees the CWCA,Col- the mayorado court have reached a different result. the employee’s wage claim, Yorkarguing that New exclusive was the ju- contract. employment to their pursuant risdiction [Minnesota Franchise Act’s or (MFA)] in a franchise agreement voids anything provision anti-waiver contract that explicitly waives . . . the MFA”). 128. 129. 916 P.2d v. Towers Fin. Corp., App. 1996). Morris 678 (Colo. 2015] 2015] court held the opposite, deciding that the anti-waiver provision that the the opposite, deciding court held in the Colo- employer’s an to invalidate was sufficient Act (CWCA) Claim rado Wage selectionforum clause. 130. 130. 131. 132. 133. 134. cordingly, the forum selection clause could not be enforced. selection clause the forum could not be cordingly, policy exception outlined in outlined exception policy 135. 135. 137. 137. Protection Act, the forum Consumer Colorado the provision in that because there was no anti-waiver and would violate policy selection clause did not necessarily Colorado public be enforced). 136. 136. that “any or oral, by an employee agreement, written purporting to waive or unenforceable. the CWCA is void and rights” under his to modify CWCA “provides a clear, comprehensive statutory scheme designed to statutory scheme CWCA “provides a clear, comprehensive wages earned by in a timelyrequire employersemployees to pay their manner.” state courts, such as those in California, have similarlystate courts, such as those in California, held that anti-waiver before that, the Colorado court did the simple math. Under simple court did the Colorado before that, the progeny, forum selectionprogeny, clauses are forum enforceable unless presumptively in policywould “contravene a enforcement strong public of the forum whether declared bywhich suit is brought, sion.” 36219-ckt_90-2 Sheet No. 172 Side A 03/25/2015 13:32:44 A 03/25/2015 172 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 172 Side B 03/25/2015 13:32:44 That That 139 The trend The 138 had the authority had the authority State courts State courts are also 140 142 [Vol 90:2 90:2 [Vol Without Congress stepping in, . For Illinois state . For Illinois state as wellcourts, 143 public policy exception more broad- more exception public policy Bremen Jane Doe v. Match.com ) 3/19/2015) 3:08 PM Bremen ELETE D note 105, at 306–07. note 105, at 306–07. OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O supra (D DOCX DOCX . note 96, at 681 (explaining that “[w]ith no federal statute that preempts state law federal statute that preempts note 96, at 681 (explaining that “[w]ith no It is also important to note that the “presence of a strong Part III.B. III.B. Part , Hall v. Super. Ct., 197 Cal. Rptr. 757, 762 (Cal. Ct. App. 1983) (“California’s , Hall v. Super. Ct., 197 Cal. 141 at 304–07. supra MoberlyBurr, & OULD FINAL OULD See See id. See, e.g. See infra 10P - G In sum, the Illinois in court In sum, policy to protect securities investors, without more, would probably justify denial of enforcement of the of the denial of enforcement justify would without probably more, investors, to protect securities policy to waive purporting provision which renders void any but section 25701, . . . provision forum choice of or evade the Corporate Securities Law, removes that discretion and compels denial of enforcement.”); buyers retail Court held that Oregon (Or. 1970) (Oregon Supreme 634–35 P.2d 633, Rose v. Etling, 467 140. 140. 141. they agreements the with made despite any recourse” “no have selection clauses,” defendants forum on plaintiffs to resolve their disputes in a specific forum). 142. Lee, 2006). 17, Mar. Tenn. at *5 (E.D. 752536, 2006 WL Serv., Inc., No. 1:05-CV-344, Serv., L.L.C. v. Citicorp Payment Elite Physicians 143. to refuse to enforce Match.com’s forum selection clause pursuant to the clause pursuant forum enforce Match.com’s selection to refuse to in exception outlined public policy state policy disfavoring forum selection clause[s]” is not binding on federal on federal is not binding clause[s]” selection forum state policy disfavoring are juststate courts; indeed, such state policies courts as it is on “one of consider. courts manymust which federal factors” states will (and should) continue to have the right to decide how they want have the right to states will (and should) continue to of federalism principles into the to protect their consumers. An examination whystates have this into right. provides insight as other across the state courts is immaterial whether there is it country, a public policy of the courts as to the scope and application the split amongst exception. The fact remains that the exception exists. If Congress wants to selection clauses, even enforce forum create a hard rule requiring states to if they with state conflict laws, it needs to pass legislation to that end and clarify the existing uncertainty in the law. is, “state courts are likely to be more familiar with, courtsis, “state and therefore familiar more to be more are likely of,” their own protective state’s laws. policies and of state courts interpreting the interpreting of state courts 138. 138. even contracts by agreement, any entering retail installment could not waive, grantedremedies to the under retail buyer law). Oregon 139. 688 688 state statutes in provisions clauses. selection forum invalidate more distrusting of courts in foreign jurisdictions and, therefore, be and, therefore, may foreign jurisdictions in of courts distrusting more enforce their to decide whether to foreign jurisdictions hesitant to permit state’s laws. ly federalism. attitudes and can be partially explained by provincial 36219-ckt_90-2 Sheet No. 172 Side B 03/25/2015 13:32:44 B 03/25/2015 172 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 173 Side A 03/25/2015 13:32:44 : 150 In 149 While While ]. EMOCRACY 145 D , SSUES OF AGAL , 2 I S Finding the Contract 689 689 ETER P WITH USA However, the states recognized that However, the states recognized that To understand America’s federal sys- To understand America’s 147 144 Many of the states wanted to retain the ) 3/5/2015) 12:41 PM available at 146 ONSTITUTION ELETE 1. History of Federalism Federalism 1. History of Finding the Contract in Contracts for Law, Forum and Arbitra- Finding the Contract in Contracts for Law, Forum , C D OT Protect Their Consumers Protect Their N CONSUMER PROTECTIONCONSUMER LAWS 9 (1997), 9 (1997), O (D Federalism DOCX DOCX . 148 American Federalism: Past, Present and Future note 145, at 9. . L. Woodward, J. 1, 45 n.152 (2006) [hereinafter EDERALISM US . F B M supra A OULD FINAL OULD at 10. Id. Id. Id. ASTINGS B. Federalism Gives States the Right to Decide for ThemselvesDecide Right to the Gives States B. Federalism to How 10P - G After the Americans won the Revolutionary War, there was a real Preempting state consumer protection laws violates violates of the very protection laws state consumer core Preempting Under the existing legal system, there is no legal authority for federal federal for is no legal authority there existing legal system, Under the , 2 H EINVENTING the newlyof independence; they states shared the goal independent also as theyhad strained relations, greatly differed in history,geography, popu- and politics. lation, economy, R http://usinfo.state.gov/journals/itdhr/0497/ijde/ijde0497.pdf. http://usinfo.state.gov/journals/itdhr/0497/ijde/ijde0497.pdf. 146. Linda R. Monk, Delegates from the states were summoned Philadelphia, where they to suc- 144. tion J. Jr., William Woodward, 2015] 2015] 1787, “George Washington, Alexander Hamilton, James Madison,1787, “George Washington, Alexander and strengthen the country and better de- leaders” sought to other [American] the states and the national government. fine the relationship between tem and how it relates to consumer protection laws, this Part will briefly laws, and how it relates to protection consumer tem The creation and development of our federal system. discuss the origins of the concept of federalism todates back In 1776, the American Revolution. declared independence fromthe thirteen colonies Great Britain. http://www.pbs.org/tpt/constitution-usa-peter-sagal/federalism/ (last 2015). visited Feb. 6, Katz, 147. 148. 149. 150. in order to win the war and survive on the world stage, they had to coordi- in order to win the war and survive of with one another on a number nate their efforts and cooperate military issues. important powers of a sovereign nation (i.e., the ability to make treaties, receive am- make to (i.e., the ability powers of a sovereign nation bassadors, and regulate commerce). danger that the emerging country would fall apart, as states pursued their country would emerging danger that the own interests rather than the interests of the national States. United 145. Ellis Katz, Ellis 145. the United States’ federal system. courts to preempt state state of laws, regardless consumer protection preempt courts to how per- are. enforcement of in favor policy arguments suasive the 36219-ckt_90-2 Sheet No. 173 Side A 03/25/2015 13:32:44 A 03/25/2015 173 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 173 Side B 03/25/2015 13:32:44 , 5 154 . 32 (Alexander Hamil- . 32 (Alexander Another purpose Another purpose O Westlaw 1787 WL 356. 1787 WL Westlaw N 155 Powers traditionally traditionally Powers . (“The Tenth (2007) 503, 564 One of the goals of the One of 157 Westlaw 1788 WL 460. 460. 1788 WL Westlaw 159 EV 153 While the Constitution [Vol 90:2 90:2 [Vol 158 EDERALIST . L. R available at D F HE available at , 66 M note 159, at 523. note 159, at Federalism and the Tug of War Within: Seeking Within: War of Tug Federalism and the “Individuals are citizens of both the citizens are “Individuals 152 supra , “If [the peoples’] rights are invaded by rights are invaded , “If [the peoples’] ) 3/5/2015) 12:41 PM Erin Ryan, ELETE D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW see also . 1, T (citing (2012) § 5.1 N O . 46, at *1 (James Madison), . 28, at *3 (Alexander Hamilton), Hamilton), at *3 (Alexander 28, . DUC (D O O E N N The Relationship between the Federal Government and Local Government Local Government and Federal the between Relationship The note 145, at 13; Ryan, note DOCX DOCX . note 146. EGAL . amend. X; . I, § 8. art. note 145, at 10. L Federalist Papers supra supra ONST ONST EDERALIST EDERALIST supra F F Katz, OULD FINAL OULD “From these Constitutional origins, federal case law has origins, federal case “From these Constitutional devel- HE HE Id. Id. See Katz, ONTINUING 156 160 151 . 10P - G The Constitution expressly outlines which powers the federal govern- expressly outlines which The Constitution In the United States’ federal system, their basic people retain “the In the United .C 152 ASS left to the states include the power to police citizens, run local schools, to police citizens, run local left to the states include the power con- rules governing utilities and services, and establish regulate public tracts. 155. T 155. 156. Cove, Joseph C. M does not explicitly say which powers are allocated to the states, it makes not delegated to powers that: “[t]he clear through the Tenth Amendment the United States byby States, are the Constitution, nor it to the prohibited reserved to the States respectively,the people.” or to creating a federal system was to permit both levels of government—state of government—state both levels was to permit system creating a federal the rights of citizens in case and federal—to protect either body of govern- ex- As Alexander Hamilton tyrannical. powerful and ment became too plained in the redress.” of the other as the instrument of use can either, they make 154. T 154. 153. 153. national government and their respective states.” their respective and government national Checks and Balance in the Interjurisdictional Gray Area Gray in the Interjurisdictional Balance Checks and ton)). 157. 158. U.S. C Amendment tells us that there [are] realms of respective state and federal authority, without squarely Amendment telling us what powers lie in which realm.”). 160. 151. Monk, Monk, 151. Likewise, James Madison stated that the national and state governments state governments Madison stated that the national and Likewise, James constituted with and trustees of the people, agents “are in fact but different and designeddifferent powers, for different purposes.” 690 690 “federal- of cessfullynotion the and introduced the Constitution drafted ism.” of creating a federal system was to protect local the autonomy of the states. 159. U.S. C U.S. 159. oped a body of law giving deference to of local rights,” including “the right of oped a body own courts . . . .” a state to enforce its own laws in its ment possesses. These powers include the right to levyment possesses. These powers include war, taxes, declare and regulate interstate and foreign commerce. sovereignty and they delegate some powers to the national government and government to the national powers some delegate they sovereignty and states.” powers for the reserve other 36219-ckt_90-2 Sheet No. 173 Side B 03/25/2015 13:32:44 B 03/25/2015 173 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 174 Side A 03/25/2015 13:32:44 Prior to 165 However, in 163 U.S. Consumer Protection 168 691 691 The Supremacy Clause is par- The Supremacy 162 . 305, J. 306 (2011). However, as the country became more However, as the more country became OUNS ) 3/5/2015) 12:41 PM 167 C ELETE D EFENSE OT N CONSUMER PROTECTIONCONSUMER LAWS O 2. The Lack of Federal Legislation , 78 D , (D note 104, at 1032–33. note 104, at 1032–33. note 159, at 541. DOCX DOCX . note § 5.5.2. 156, supra supra supra Ryan, OULD FINAL OULD at 306–07. The Framers of the Constitution anticipated of the Constitution that The Framers there wouldbe Instead, the responsibility of protecting consumers rested with the consumers rested with the protecting of Instead, the responsibility See Id. Id. Id. Id. 161 166 10P - G There areThere many traditionally powers other by exercised states the To date, there is no federal legislation To date, there is no federal legislation mandating the enforcement of 164 situations where it is situations where law is preempted, uncertain whether state theory“[c]onstitutional absence of preemption on the rationale favors the causes authority, and if such presumption better to presume local that it is can alwaysdifficulties Congress enforce its legislative purpose by remedial inter- to the federal authority than subordinating local legislation rather est.” 165. Edward M. Crane, Nicholas J. Eichenseer & Emma S. Glazer, Law: A Federalist Patchwork Law: 166. 166. 167. 168. some overlap between state and federal powers, and consequently there and consequently and federal powers, between state overlap some To provide clarity their laws. between conflict could be in such situations, included a “Supremacy law the Framers that if a state declaring Clause,” enumer- law enacted pursuant to a constitutionally conflicts with a federal law is ated power, the federal controlling. 163. Karayanni, Karayanni, Cove, 163. 164. 161. 161. 162. 2015] 2015] states and local municipalities. ticularly significant to this Article’s discussion because it gives the federal discussion ticularly Article’s significant to this state the power to preempt consumer protection laws through government federal laws Commerce enacted pursuant to the Clause. 1900, the federal government rarely passed federal consumer protection laws. industrialized and manufactured goods increasingly streamed increasingly stateacross goods industrialized and manufactured step in, passing legislation target- began to government borders, the federal productsand unfair business practices ing specific categories of consumer and banking). drugs, food, (e.g., laws regulating trade, which are actuallywhich are shared by powers state govern- and both the national ments. forum selection and choice of law clauses. While the “Constitution does selection of law clauses. While the “Constitution forum and choice not [directly] the address authoritythe federal government to of protect thispower nonetheless possesses federalconsumers,” the government through its ability to regulate interstate domestic commerce. 36219-ckt_90-2 Sheet No. 174 Side A 03/25/2015 13:32:44 A 03/25/2015 174 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 174 Side B 03/25/2015 13:32:44 171 174 Clause 19 of to require a judi- “Section 2 of the 2 of the “Section 176 170 . 763 (1998). 759, is illustrative of this this illustrative of is EV 169 [Vol 90:2 90:2 [Vol .L. R .L. cl. 19, cl. 19, AND COM . , 51 V 51 , 175 ATCH As one court put it, by enacting Section it, by enacting Section As one court put ,M ) 3/5/2015) 12:41 PM 172 ELETE Since the FAA’s enactment, and both federal D 173 withdrew the power of the states of the withdrew the power OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O Restrictions on Forum-Selection Clauses in Franchise Agreements andRestrictions on Forum-Selection Clauses in Franchise note 170, at 763–64. note 170, at 763–64. (D , 960 P.2d at 727–28. , 960 P.2d at 727–28. DOCX DOCX . supra Grohn , OULD FINAL OULD (quoting 9 U.S.C.A. § 2). at 728 (emphasis added). Match.com Terms of Use Agreement Id. Id. See e.g. 10P - G There is an important policy reason why only federal legislation can policy federal legislation reason whyThere is an important only Congress can enact federal legislation stating that forum selection selection forum that stating legislation enact federal can Congress 176. 176. FAA proclaims that in all contracts ‘involving commerce,’ an arbitration commerce,’ an ‘involving contracts that in all FAA proclaims save upon such be valid, irrevocable, and enforceable, agreement ‘shall of any the revocation law or in equitygrounds as exist at for contract.’” 171. 171. 172. U.S.C.A. § 1). 9 1998) (quoting 725 (Colo. App. of Charity Health Servs., 960 P.2d 722, Grohn v. Sisters 173. 174. Zimmerman, Zimmerman, 174. 175. state courts have of state regardless agreements upheld arbitration law. the Federal Arbitration Act: Is State Law Preempted? 170. James Zimmerman, Zimmerman, James 169. 170. 9 U.S.C.A. § 1 2014). (West Notably, when refusing to enforce forumNotably, when refusing selection clauses, many state forum selection agreements from courts have distinguished arbitration clauses by the en- highlighting the lack of federal legislation requiring selection clauses. of forum forcement 692 692 “‘commerce’The FAA defines the ‘commerce to include [any] among several States or with foreignnations,’” intent to interpret the with the term commerce” broadly. “involving 2 of the FAA, “Congress 2 of the FAA, “Congress cial forum for the resolution of claims which the contracting parties agreed of claims which the contracting for the resolution cial forum to resolve by arbitration.” point. In 1925, Congress point. In the FAAenacted the existing“to overrule com- agreements.” arbitration invalidated law that often mon require state courts to enforce forum selectionwith state clauses in conflict require state courts to enforce forum laws. When the federal government passes legislation, in theory, all fifty states have in the Senate and a voice through their representatives House. Moreover, the entire country vote for the President may of the United justification does States, who can veto any bill. However, the same federal not apply level because stateon the state have no say in the laws legislators any federal legislation Withpassed by legislators in other states. of the lack selection clausesmandating the enforcement of forum and the resulting uncertainty in the federal such clauses can be and state courts as to when to include has recentlyopted enforced, it is not surprising that Match.com an arbitration clause in its Terms of Use Agreement. clauses preempt anyclauses preempt laws to the state contrary, any including anti-waiver Federal The provisions. (FAA) Arbitration Act 36219-ckt_90-2 Sheet No. 174 Side B 03/25/2015 13:32:44 B 03/25/2015 174 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 175 Side A 03/25/2015 13:32:44 As As 184 Match.com ., Feb. 5, 2008, 2008, 5, Feb. ., In the online da- In the online RIB 183 . T HI 693 693 , C In fact, having differences 181 180 Rather, consumer protection laws Rather, consumer protection laws 178 administered by Arbi- administered the American note 29, at 11–14. at 11–14. note 29, supra note 165, at 305. , ) 3/5/2015) 12:41 PM 3. Making Trade-offs 3. Making Trade-offs ELETE supra As the United States Supreme Court has em- As the United States Supreme D 182 OT This patchwork is not by accident; it is the conse- This patchwork is not by accident; N CONSUMER PROTECTIONCONSUMER LAWS O 179 ]. (D 177 How do I catch a Valentine? I catch How do DOCX DOCX . Constraining Opt-Outs OULD FINAL OULD at 305–06. (emphasis in original). at 50 (citing New State Ice Co. 285 U.S. 262, 280 (1932) (Brandeis, v. J., Liebmann, BINDING ARBITRATIONBINDING Id. Id. Id. Id. 10P - G However, federalHowever, legislation clarifyingthe is not the only solution for While permitting each of the fifty to create states their own consumer The IDRSA is a consumer protection statute. Unlike many foreign ju- ting context, the states “as a laboratory” concept is illustrated by the increase in various services laws online dating across the country. in the United States are a “patchwork” of often interrelated and overlapping of often interrelated in the United States are a “patchwork” federal and state laws. amongst the states regarding what is the best trade-off is not only accepta- only best trade-off is not states regarding the what is the amongst ble, but also encouraged. phasized, one of the biggest strengths ofphasized, one of the biggest strengths in the “Nation-State relationship our federal system” is the freedom provided to states to “serve as a labora- experiments.” tory; and try social and economic novel http://www.match.com/registration/membagr.aspx (last revised Feb. 5, 2014) [hereinafter 2014 Terms of Use Agreement 177. 2015] 2015] Match.com’sstates: Use Agreement of Terms 2014 exclusive “The means anyof resolving Agree- relating to this arising out of or dispute or claim anyment (including thereof), the Service, alleged breach or the Website shall be 178. Crane, Eichenseer & Glazer, 184. Eric Gwinn, Eric dissenting)). 184. http://articles.chicagotribune.com/2008-02-05/features/0802040358_1. http://articles.chicagotribune.com/2008-02-05/features/0802040358_1. tration Association.” quence of the United States’ system. federal quence of the uncertainty in the law. As exemplified byuncertainty creation of the Uniform the the law. As exemplified in Commercial Code, states can pass codes similar to one model another if to all the par- codes would be they such believe mutually beneficial model that thisticipant states. Given yet—at has not happened least not success- their ownpassing and enforcing fully—the content with states seem their residents. best suited for deem laws, which they consumer protection protection laws can be burdensome for businesses engaged in interstate our federal system. trade-off of trade, it is the 179. 179. Woodward, 180. 181. 182. 183. v. Rodriguez, 411 U.S. Sch. 1, San Antonio Indep. (1973). Dist. 49–50 risdictions, the United States does not have a single, comprehensiverisdictions, the United States does code protection laws. its consumer outlining 36219-ckt_90-2 Sheet No. 175 Side A 03/25/2015 13:32:44 A 03/25/2015 175 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 175 Side B 03/25/2015 13:32:44 This Article This Article EASONS R 189 185 OLICY P [Vol 90:2 90:2 [Vol . 32 (Alexander Hamilton)). . 32 (Alexander Hamilton)). O N UBLIC court drew on many of the the of court drew on many :P Brodsky EDERALIST F T RIGHT I HE ) 3/5/2015) 12:41 PM the OT 191 G ELETE D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O Lacking federal legislation, these courts simply Lacking federal legislation, these en- (D LLINOIS LLINOIS I 188 DOCX DOCX court and its progeny have highlighted numerous policy numerous highlighted and its progenycourt have . HY note 156, § 5.1 (citing T § 5.1 note 156, note 145, at 10. Part II. , Brodsky v. Match.com L.L.C., No. 09 Civ. 5328 (NRB), 2009 WL 3490277, at *4 *4 3490277, at WL (NRB), 2009 L.L.C., No. 09 Civ. 5328 v. Match.com , Brodsky , Roby v. Corp. of Lloyd’s, 996 F.2d 1353, 1363 (2d Cir. 1993). 1993). Cir. (2d 1363 1353, 996 F.2d of Lloyd’s, v. Corp. Roby , supra supra IV. W are contracts less persuasive in personal injury cases involving OULD FINAL OULD This theory was in recognition of the belief that “law arises out of of “law arises out recognition of the belief that This theory was in in Personal Injury Cases Involvingin Personal Injury Contracts of Adhesion Bremen As discussed above, See, e.g. See supra Id. See, e.g. Accordingly, without federal legislation mandating the enforcement 186 A. The Public Policy Arguments Cited in Bremen are Less Persuasive Policy Arguments Cited in Bremen A. The Public 190 10P - G The courts that have enforced forum selectionwith clauses in conflict The courts that have enforced forum Moreover, the Framers of Moreover, that states expected Constitution the would The 187 Bremen 190. 190. 187. Cove, 187. reasons for enforcing forum selection clauses, including economic efficien- selection clauses, including economic reasons for enforcing forum practicalitycy, and (in an era of party autonomy, increasing globaliza- tion). (S.D.N.Y. Oct. 29, 2009). 29, 2009). Oct. (S.D.N.Y. 189. the need to address distinctly local problems” and, in that vein, states were and, in that vein, states distinctlythe need to address local problems” inbackyards, the problems best suited for solving their own as they are their own familiar with most geography, distinct popula- and economy, tion. 186. Katz, 186. 185. 185. 694 694 have of Americans millions websites, dating online to use begun con- and online safetycerns for have risen, states have experimented with differing states protection, with some levels of servicesonline dating even requiring background practices. their criminal to disclose screening of forum selection clauses,of forum states can continue their own trade-offs to make their consumers. and decide for themselves how they to protect want same policy arguments. same policy arguments. 188. 188. gaged in a weighing of values, where individual autonomy and economic and economic autonomy where individual gaged in a weighing of values, outweighedefficiency any arguments federalism concerns. takes the opposite position because: first, the public policy arguments cited first,takes the opposite position because: the public in state con- wholesale displacement of there is a risk of second, of adhesion; are at protectionssumer even greater disad- an and third, consumers laws; vantage vis-à-vis big business. state consumer protection laws have based their decision on primarily pub- state consumerlaws have based their decision on primarily protection grounds. lic policy be the principal lawmakers in the federal system when in the federal system lawmakers be the principal came to it domestic issues. 36219-ckt_90-2 Sheet No. 175 Side B 03/25/2015 13:32:44 B 03/25/2015 175 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 176 Side A 03/25/2015 13:32:44 As numer- 195 For example, For example, Similarly, by Similarly, 199 197 200 Simply put, pre- 198 where a potential de- where a potential 196 695 695 The conservation of judi- 201 . 700 (1992). 700, In agreeing to litigate future dis- to litigate future In agreeing EV 193 . U. L. R . U. L. ) 3/5/2015) 12:41 PM W ELETE , 86 N , and where debt-ridden federal and state gov- and where debt-ridden federal and D OT 202 N CONSUMER PROTECTIONCONSUMER LAWS , 499 U.S. at 593–94. , 499 U.S. at 593–94. O (D Parties able to choose a forumare also that is conven- leading to the smooth functioning and growth of of growth and to the smooth leading functioning note 104, at 1009. note 104, at 1009. note 104, at 1009. note 104, at 1009. My Way and the Highway: The Law and Economics of Choice of Forum and the Highway: The Law and Economics of My Way 194 192 DOCX DOCX . supra supra note 96, at 664. Part II. , 996 F.2d at 1363. , 996 F.2d at 1363. , 996 F.2d at 1363. supra Carnival Cruise Lines, 499 U.S. 585, (1991). Inc. v. Shute, 593–94 OULD FINAL OULD See Id. Roby See supra See Roby Carnival Cruise Lines 10P - G Third, proponents argue that in addition to businesses and the courts, businesses and the courts, to Third, proponents argue that in addition Second, these proponents argue that forum selection clauses provide argue that forum Second, these proponents First, these proponentsFirst, play clauses selection that forum argue im- an 200. Lee Goldman, Lee 199. 200. Clauses in Consumer Form Contracts Clauses in Consumer consumers benefit as well. This is because predictability and lower transac- 196. element acceptable to both parties is an indispensable on a forum uncertainties by agreeing in advance of all such elimination (1972) (“The 407 U.S. 1, 13–14 M/S Bremen v. Zapata Off-Shore Co., in international trade, commerce, and contracting.”). Karayanni, 197. 198. 195. 195. ous courts have emphasized, providing predictability and certainty is providing emphasized, ous courts have in theparticularly international context, important 201. 201. ernments are continually trying to cut down on unnecessary spending. putes in a specific forum, parties are able to plan ahead and consider the and consider a specific forum,putes in parties are able plan ahead to costs associatedrisks and should unforeseena business transaction with develop. problems 191. Lee, 191. 192. Karayanni, 193. 194. 2015] 2015] cial resources is particularly beneficial in an era where many American courts are “overloaded,” interstate interstate commerce.and international fendant can if he is forced to litigate disputes face tremendous burdens forums and laws. under unexpectedlydistant and/or hostile dictability and certainty to reduced transaction costs. lead enforcing forum selection clauses, litigants are also spared the time and time are also spared the selection clauses, litigants enforcing forum thereby the correct forum motions, through pretrial expense of determining judicial resources. further conserving limited through the use of standard form contracts, businesses can contracts, standardthrough the use of mandate that all form take place litigation related to a product or service a specific in state or businesses to enhance county,efficiency allowing and reduce costs by con- same local counsel. solidating actions and retaining the ient, neutral, and possesses expertise inient, neutral, and the related business. economic advantageseconomic to both and the businesses courts. portant role in providing predictability and certainty for parties in commer- parties and certainty predictability providing for in portant role cial relationships, 202. v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972). M/S Bremen 36219-ckt_90-2 Sheet No. 176 Side A 03/25/2015 13:32:44 A 03/25/2015 176 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 176 Side B 03/25/2015 13:32:44 By 210 They concede They concede um agreements should agreements um For example, a a example, For 205 203 and its progeny have [Vol 90:2 90:2 [Vol Bremen Cir. 1993) (reasoning that for ) 3/5/2015) 12:41 PM ELETE D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N , 499 U.S. at 594 (explaining that passengers purchasing cruise tickets tickets cruise passengers purchasing that U.S. at 594 (explaining , 499 O (D , 407 U.S. at 12. 204 note 96, at 666. note DOCX DOCX . , 407 U.S. at 11 (explaining that a favorable approach toward forum selection favorable approach toward forum , 407 U.S. at 11 (explaining that a As one federal court put it, “One aspect of personal liberty liberty put it, “One aspect of personal As one federal court and bargain away certain rights when they it benefi- deem but argue that individual parties should have the freedom to should have the freedom parties but argue that individual to supra Omron Healthcare, Inc. v. Maclaren Exports Ltd., 28 F.3d 600, 604 (7th Cir. 1994) Cir. 1994) Healthcare, 604 (7th Inc. v. Maclaren Exports Ltd., 28 F.3d 600, Omron 208 207 206 Accordingly, when forum selection clauses forum Accordingly, when are included in con- Gen. Instrument Corp. v. Tie Mfg., 517 F. Supp. 1231, 1235 (S.D.N.Y. 1981) (“[t]he 1235 (S.D.N.Y. 1981) (“[t]he 1231, F. Supp. Corp. v. Tie Mfg., 517 Gen. Instrument Lee, OULD FINAL OULD 209 See See M/S Bremen See also Id. M/S Bremen See Carnival Cruise Lines Carnival Cruise 10P - G Undoubtedly, the policy arguments in arguments the policy Undoubtedly, Lastly, proponents argue that forum selection clauses should be en- be clauses should selection Lastly,that forum argue proponents (presuming that a party who has agreed compensation(presuming for the risk); to litigate abroad has received some (2d 996 F.2d 1353, 1363 v. Corp. of Lloyd’s, Roby principally be enforceable because the financial effect ofprincipally be enforceable because the selection a forum financial effect clause will be reflected in the value of the contract). bench and bar has always regarded choice of forum as a significant right.”). of forum bench and bar has always regarded choice 207. 208. 208. 209. 2002). Cir. (7th Metro E. Ctr. for Conditioning & Health v. Qwest Commc’n Int’l, Inc., 294 F.3d 924, 929 210. containing the forum selection clause likely got reduced prices “reflecting the savings that the cruise savings that “reflecting the prices got reduced selection clause likely forum the containing line enjoys by limiting the fora in which it bemay sued.”). 204. 205. clauses “accords with ancient concepts of freedom of contract and reflects an appreciation of the ex- an appreciation of contract and reflects of freedom concepts with ancient clauses “accords seek business in all parts of the world”). contractors who American of panding horizons 206. refusing to enforce forum selection clauses, courts would be permitting clauses,refusing to enforce forum selection courts would be permitting certain parties to receive better deals than either partyor bar- intended gained for. some some merit. worldAs the among globalizes and competition economy businesses increases, the and its legal systemUnited States must adapt to edge. There is a le- and innovative growth ensure the country’s continued concern that substantial increases in legal costs (and other associ- gitimate cial to do so. is the entitlement to exchange statutory rights for something valued more more valued to exchange statutoryis the entitlement for something rights highly.” tracts, proponents argue that theytracts, proponents are often bargained for in consideration reducedfor some other benefits, such as a cost in product or service, and thus accurately reflect the negotiated value of the contract as a whole. 203. 203. 696 696 prices in lower result costs often tion for consumers. that a litigant’s right to select a forum to bring suit is unquestionably a val- is unquestionably to bring suit to select a forum that a litigant’s right uable right, $1,000 ticket for a cruise would likely cost more if the cruise line had to the cruise line if cost more would likely for a cruise $1,000 ticket in the United a suit anywhere of litigating potential costs the consider and would certainly impact the be expensive such litigation could States, as company’s profits. control the terms and expectations of their commercial of and expectations relationships with control the terms one another, forced because and individual to contract notions of individual freedom the American judicial system. of root are at the autonomy 36219-ckt_90-2 Sheet No. 176 Side B 03/25/2015 13:32:44 B 03/25/2015 176 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 177 Side A 03/25/2015 13:32:44 214 According- 213 There is a stark 212 , and presuming the en- , and presuming and its progeny certainly 697 697 Bremen Bremen ) 3/5/2015) 12:41 PM ELETE D OT N CONSUMER PROTECTIONCONSUMER LAWS O (D note 104, at 1040. note 104, at 1040. DOCX DOCX . supra OULD FINAL OULD 211 Id. 10P - G While the policy in arguments made First, personal injury claims are distinguishable from contract dis- claims are distinguishable from First, personal injury ly, in situations “where one must decide whether to a certain implement at aimed of humans or one the physical aimed at protecting integrity norm to the former.” welfare, preference should be given protecting economic 211. PACER, https://ecf.ilnd.uscourts.gov/cgi-bin/login.pl (last visited Feb. 6, 2015). 212. not commercial benefits negotiated contracts between sophisticated entities. However, the same may freely selectionThe benefits associated with forum involving clauses are quite clear in cases selection of a forum terms “agreed” to the who consumers unsophisticated in cases involving apply Karayanni, did not read). clause through a click-wrap agreement (which they likely 213. 214. 214. 2015] 2015] could negativelyburdens) ated in turn, and, businesses American impact spirit. The in- entrepreneurial growth and economic the country’s hamper likelyabove could by be swallowed described and costs creased burdens larger businesses, as such Match.com, of who have teams attorneys to ensure compliance with local laws places; litigate in remote and same the have the not typically businesses, which smaller do said about cannot be Still, technologysame resources. is a two-way street. It has not only brought businesses and consumers from thereby across the world together, a driv- but it has also been increasing interstate litigation, and international tech- with digital the costs of litigation. For example, ing force in reducing both saving parties taken remotely, can be Skype,depositions nologies like so- time and and more Internet money. of the with the advent Similarly, courtwebsites phisticated government and databases, as documents, such across the can be filed online in pleadings and courtrooms many motions, country. difference between presuming the enforcement of forum selection of forum clauses enforcement difference between presuming the freely for bybargained sophisticated commercial assented to and entities, in such as the contract between the parties do raise important concerns, they should not be determinative to the issues be determinative not concerns, they should do raise important of contract pol- efficiency and freedom economic the at hand. Specifically, When de- icy all circumstances. are not equally persuasive in arguments whether to enforce forum selection clauses,termining courts consider must the typeparties involved in the contract, the of circumstances in which the contract was agreed to, and the nature of the dispute. forcement of forum selection clauses in personal injury cases involving forcement cases. at issue in the Match.com contracts of adhesion, such as the contract of putes. As a matter of principle, courts have “recognized that the interests with when compared life weigh heavily human protecting and preserving integrityvarious entities.” of that of protecting the economic 36219-ckt_90-2 Sheet No. 177 Side A 03/25/2015 13:32:44 A 03/25/2015 177 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 177 Side B 03/25/2015 13:32:44 . T S ALE ALE HIO , 28 Y , , 26 O [Vol 90:2 90:2 [Vol Unsurprisingly, most con- One familiar of a example 219 216 These types of contracts are 218 There typically is no contemplation or or no contemplation typically is There 215 ) 3/5/2015) 12:41 PM ELETE D OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW 220 N Consumer Contract Exchanges and the Problem of Consumer Contract Exchanges and the Problem Adhesion , Jane was allegedly, Jane was where the in Chicago, raped O (D Getting a Bad Rap? Unconscionability in Clickwrap Dispute Resolution in Clickwrap Unconscionability Getting a Bad Rap? DOCX DOCX . In these types of contracts, the public policy justifications for . (2011). 160–61 119, Jane Doe 217 OULD FINAL OULD ESOL at 160. at 347. .R . 346 (2011). 313, Id. Id. Id. Id. ISP EG 10P - G Second, it is important to distinguish contracts of adhesion from those contracts of adhesion from to distinguish Second, it is important R D ON ON negotiation over any of the terms of the contract, which are generally drafted by the “stronger party the transaction.” to enforcement contracts of adhesion, because are diminished enforcement like the click- “accepted knowingly often not are wrap agreements used by Match.com, consideration).” for (and and voluntarily 220. 220. 215. J. Andrew A. Schwartz, 698 698 local. For more and thus personal more inherently torts are vein, In that in example, filed. All of thelawsuit was witnesses as were in Chicago well as the as- sailant, Ryan injury In Jane’s personal Logan. where Ryan lawsuit, Logan had subject have not would a Texas court named as a defendant, was also Ryan. Ulti- jurisdiction over personal suit or over the matter jurisdiction and one Illinois, one in Chicago, mately, be two trials, there would need to Byin Dallas, Texas. over a pay-had Jane Doe sued Match.com contrast, have been a weaker personal would ment dispute, there to Chi- connection residents,Chicago to Chicago-area in advertised Match.com cago. While and the contract enteredwas in Chicago, a contract into dispute over payment does not inherently strike the deeply local and same personal nerve associated witha or rape. And from sexual assault fairness it standpoint, of an assault, battery,other simi- or any that the victim right does not seem lar tort be forced to bear burden of extra travelthe costs ex- and related penses. contracts that are freely negotiated. “Contracts of adhesion” are standard contracts presented on a take-it-or-leave-it basis,form “usually presented to entity.”a consumer by a business sumers do not read them. do not read sumers 217. 217. 218. 219. Lucille M. Ponte, the Quality of These Online Consumer “Products” for Improving Clauses and a Proposal 216. 216. J. contract of adhesion is the Google Terms of Service Agreement, which Terms contract of adhesion is the Google or the use of Google’s Gmail, websites, such as Google search, “govern[s] YouTube.” often excessively long and contain legalese. The use of small printoften excessively also The use of small long and contain legalese. and understand. to read difficult makes them 36219-ckt_90-2 Sheet No. 177 Side B 03/25/2015 13:32:44 B 03/25/2015 177 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 178 Side A 03/25/2015 13:32:44 227 But the But the 225 699 699 State legislatures ultimate- State legislatures 222 note 144, at 45. 226 Through the wide-scale use of forum use of Through the wide-scale forum In theory, a favorable business environ- 221 ) 3/5/2015) 12:41 PM supra 224 Protection Laws Protection ELETE D As Woodward explains, when state lawmakers explains, when As Woodward OT N CONSUMER PROTECTIONCONSUMER LAWS 223 O The system works the way and is fair designed The system it is (D 228 DOCX DOCX . 229 B. We Risk theB. We Wholesale Displacement Consumer of State OULD FINAL OULD at 40, 45. at 39. at 45 n.152. at 45 n.152. at 45. Id. Id. Id. Id. Id. Id. Id. Id. 10P - G In addition, by selection In addition, of law clauses and choice forum enforcing In the article in Contracts for Contract “Finding the Forum Law, and Under the U.S. federal system, each state can decide for itself the Under the U.S. federal system, each can decide for itself the state promulgated en acrosspromulgated masse the country,of whether they regardless con- state’s a forum flict with of wholesale displacement laws, we risk the own state consumer protection laws. 222. 222. 223. 223. 224. 224. 225. 226. 227. 228. question is: at what cost? States have toquestion is: at what cost? States have trade-offs, make where they create or more for a in exchange protection up some level of consumer or give less favorable business environment. 229. 229. determine how much consumer protection they will provide their residents, will provide their they consumer protection how much determine theyin a complicated political process that engage the state’s balances with the state’s its residents in creating interest interest in protecting a favorable business environment. selection and clauses choice of law in contracts, businesses can adhesion those and impose choose a state protection laws with favorable consumer forty-nine states. the other laws on citizens of 221. Finding the Contract, Woodward, While some states, like Delaware, favor- on a more have prided themselves like other states, able business California, have chosen a environment, more consumer friendly even if it balance, the State’smakes environ- business ment less favorable. 2015] 2015] ly lose their ability to protect consumers in their own state. consumers in their own state. protect ly lose their ability to J. Woodward highlights someArbitration,” William of the serious prob- a to impose chosen state’s with allowing laws on consum- businesses lems state. ers of a different so long as the citizens of a state receive the benefit of the actual “mix” their state provides. ment can create more jobs and tax revenue, which can be redistributed to a which can jobs and tax revenue, ment can create more state’s residents in the form of lower taxes and other benefits. proper “mix” of consumer protection it provides vis-à-vis its businesses. protection of consumer proper “mix” 36219-ckt_90-2 Sheet No. 178 Side A 03/25/2015 13:32:44 A 03/25/2015 178 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 178 Side B 03/25/2015 13:32:44 236 230 233 AUL P E , 62 D Rather, they Rather, they 238 [Vol 90:2 90:2 [Vol 234 Repeat players do not just consider 237 If citizens of a “high” consumer If citizens of a “high” protec- Business 232 ) 3/5/2015) 12:41 PM The people living in “high” consumer living in “high” The people protec- ELETE D 231 OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O (D How the “Haves” Come Out Ahead in the Twenty-First Century the Twenty-First Out Ahead in “Haves” Come the How DOCX DOCX . OULD FINAL OULD at 523–24. at 523. 239 Businesses have enjoy superior economic power and resources, Id. Id. Id. Id. Id. Id. Id. Id. Id. 235 C. We Put Consumers at an Even Greater Disadvantage Vis-à-Vis Big at an Even Greater Disadvantage C. We Put Consumers . 519 (2013). 519, 10P - G Similarly, states risk putting their citizens at an even greater disad- Similarly, states If citizens do not receive the actual “mix” their state provides, and in- and provides, their state “mix” the actual not receive do If citizens EV often play the odds in their favor by odds in their that settling cases would create the often play adverse precedent and litigating cases that will likely their create rules promoting interests. protection states have higher taxes (in exchange for more protections), and protections), exchange for more taxes (in states have higher protection in “low” consumer protection states the people living (inhave lower taxes protections). exchange for fewer L. R Unlike consumers, who are typically businesses engage in “one-shotters,” and try considerations shape the development to litigation with long-term precedent. of the law through court 230. 231. 232. 233. Talesh, Shauhin 234. 235. “Low” regulation states have an incentive to encourage this result because states have an incentive to encourage “Low” regulation even it makes them more attractive to businesses. 700 700 purposes, assumeFor illustrative the truth of what many lob- pro-business byists assert—that a state’sis a correlation between there protec- consumer tion laws its taxand level. vantage vis-à-vis big business, which already the terms of their vantage vis-à-vis big dictates interactions with consumers. Generally, businesses, as players”“repeat in have huge advantages the legal system, dispute resolu- over consumers in tion. 237. 237. 238. 239. 236. 236. economies of scale, and, through repetitive interactions, can develop interactions, of scale, and, through repetitive economies and the courts. cooperative relationships with court officials friendly and tion state are subjected to the laws of a “low” protection state (by to the laws of a “low” protection tion state are subjected forum they of law provisions), selection and choice an unintended, and receive protection). (i.e., high taxes and low consumer often unfair, balance the immediate financial stakes of an individual dispute. the immediate financial stakes of stead receive the “mix” of stead receive state,another the “mix” is the federal balance then upset. 36219-ckt_90-2 Sheet No. 178 Side B 03/25/2015 13:32:44 B 03/25/2015 178 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 179 Side A 03/25/2015 13:32:44 , 242 case and other case and other Brodsky 701 701 had the authority to, and Unlike consumers, busi- Unlike 240 Consumer protection statutes Consumer protection statutes . The 243 Bremen http://www.phawker.com/2012/01/12/qa-with-online- ONCLUSION C ) 3/5/2015) 12:41 PM ELETE D available at Jane Doe v. Match.com OT N CONSUMER PROTECTIONCONSUMER LAWS O Common Law Protection of Individuals’ Rights in Personal Information Common Law Protection of Individuals’ (D The death of several bills in the 1990s that attempted to bills in the 1990s that attempted The death of several DOCX DOCX . note 235, at 526. 241 . 951, 987–89 (1996) (explaining how the marketing lobby was able to derail lobby how the (1996) (explaining marketing . 951, 987–89 244 EV supra L. R OULD FINAL OULD Id. Id. 10P - G The Illinois court in Accordingly, consumer protection when are passed, states statutes In addition to shaping the law through strategic gamesmanship, busi- gamesmanship, strategic through the law shaping to In addition ORDHAM 65 F Inst. of Tech. (Jan. 12, 2013), privacy-expert-lori-andrews/. 241. 242. William J. Fenrich, cases that came to the same conclusion have missed the mark. For Illinois the mark. have missed cases that came to the same conclusion state courts, as well as other state courts across the country,it is immaterial courts as to the scope and application whether there is a split amongst the To exception exists. is that the The fact exception. policy public of the protect consumers’ personalprotect consumers’ credit including an individual’s information, history, and travel purchases, patterns, supports this argument. nesses have thenesses have money to hire lobbying and resources influence to groups internet The influence large federal legislation. state and companies has had illustra- industry marketing is behavioral the regarding on state legislation Andrews explains, Lori privacybig data expert point. As online tive of the companies sums and Google give immense like Facebook of to money any in against their interests or influence politicians to block legislation use lobbyists politicians arm” to “strong collecting user information—and they buy. cannot 240. Interview by Phawker.com with Lori Andrews, Director, Inst. for Sci., Law & Tech. at Ill. 2015] 2015] attempts by the California, New Jersey, and New York legislatures to protect consumers’ personal protect consumers’ to New Jersey, and New York legislatures by the California, attempts Talesh, information). 243. 244. attempt to equalize the playing consumers field, so to speak, by providing attempt with fee-shifting, and attainable benchmarks for estab- punitive damages, lishing liability. did, refuse to enforce Match.com’s forum selection clause pursuant to the outlined exception public policy in should be provided the means to enforce those laws, to enforce the means federal legisla- absent should be provided tion to the contrary, helps because it unequal playingequalize the field. As in “How the Shauhin Talesh explains “Haves” Come Out Ahead in the remedial Twenty-First and Century,” legislatures pass consumer protection protect one-shotters” and/or statutes, in theory, the position of to “bolster as consumers. disadvantaged groups, such nesses legislation. shape the law through also 36219-ckt_90-2 Sheet No. 179 Side A 03/25/2015 13:32:44 A 03/25/2015 179 Side Sheet No. 36219-ckt_90-2 36219-ckt_90-2 Sheet No. 179 Side B 03/25/2015 13:32:44 [Vol 90:2 90:2 [Vol ) 3/5/2015) 12:41 PM However, without However, in, fed- Congress stepping ELETE D 245 OT CHICAGO-KENT LAW REVIEW CHICAGO-KENT LAW N O (D DOCX DOCX . note 143 and accompanying text. OULD FINAL OULD See supra 10P - G eral courts should respect the principles of federalism and not enforce of federalism the principles should respect eral courts selectionprotection state consumer in conflict with clauses that are forum of adhesion. contracts injurylaws— cases involving least in personal at 245. 245. 702 702 state consumer preempt and any laws protection associated anti-waiver the exist- pass legislation end and clarify to that must Congress provisions, ing uncertainty law. the in 36219-ckt_90-2 Sheet No. 179 Side B 03/25/2015 13:32:44 B 03/25/2015 179 Side Sheet No. 36219-ckt_90-2