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CMU ISR 08732 - MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS

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BackIn the complaint, plaintiffs allege that their computers were damaged by software distributed by defendant.This matter is before the court on the motion to dismiss of America Online, Inc. (“AOL”) for lack of properforum under Rules 12(b)(3) and 12(b)(6).(2) Alternatively, AOL moves for dismissal on forum nonconveniens grounds.Specifically, plaintiffs allege that installation of AOL Version 5.0 (“AOL 5.0") caused unauthorizedchanges to the configuration of their computers so they could no longer access non- AOL Internet serviceproviders, were unable to run non-AOL e-mail programs and were unable to access personal informationand files. Plaintiffs’ legal claims include G.L. c. 93A, negligence, breach of good faith and fair dealing,breach of implied warranties, fraud, negligent misrepresentation and tortious interference with contract.(3)Plaintiffs’ primary legal claim is that defendant’s conduct constitutes unfair or deceptive acts or practices inviolation of Chapter 93A.Defendant contends plaintiffs filed this action in Massachusetts in breach of a forum selection clause in aTerms of Service agreement (the “TOS”) and argues that Virginia is the exclusive forum for all AOLconsumer suits. In opposing the motion, plaintiffs claim that the forum selection clause does not apply inthis case because, among other things, the alleged harm to their computers occurred before they were askedto agree to the TOS and occurred even if a user declined to accept the TOS.For the following reasons, after a hearing, AOL’s motion to dismiss is DENIED.BACKGROUNDPlaintiffs Mark Williams and Sandra Mastroianni seek to represent a class of similarly situatedMassachusetts residents. After this case was filed, on April 7, 2000, AOL removed this action to the localUnited States District Court. That court remanded the case.Essentially the same factual claims plaintiffs make in this case have been made by other claimants innumerous federal cases throughout the country, including in the Eastern District of Virginia. On June 2,2000, with the agreement of AOL, the Judicial Panel on Multi-district Litigation (“the MDL Panel”)transferred pending federal cases, including the Virginia case, to the Southern District of Florida forcoordination and consolidation of pretrial proceedings. The MDL Panel subsequently transferred more than40 related cases to Florida. The transfer order states in relevant part:Common factual questions arise because, although the legal theories vary, all actions relate to use ofVersion 5.0 of the AOL software and name AOL as the sole defendant. More specifically, plaintiffs in theseactions, computer users who installed AOL Version 5.0 on their computers, allege that AOL Version 5.0DocketNo.:00-0962Parties:MARK WILLIAMS and another(1) vs.AMERICA ONLINE, INC.County: MIDDLESEX, ss.MEMORANDUM OF DECISION AND ORDER ONDEFENDANT’S MOTION TO DISMISSPage1of4MARK WILLIAMS and another(1) vs. AMERICA ONLINE, INC.10/27/2007file://C:\CMU\LawCourse2007\readings\Transactions\MARK WILLIAMS and another(1) vs...makes it difficult or impossible to access competing Internet service providers and disables, interrupts, orinterferes with the operation of various types of non-AOL software.DISCUSSIONAs noted above, plaintiffs argue that the forum selection clause should not be enforced because theircomputers or the computers of others in the putative class were altered before they were offered anopportunity to agree to the TOS. Thus, plaintiffs contend, their computers would have been damagedwhether or not they agreed to the forum selection clause. Plaintiffs also contend that the forum selectionclause is unfair and unreasonable because they did not receive adequate notice of the provision and becausethe expense and inconvenience of litigating in Virginia would effectively prevent them from seeking redressfor their relatively small damages.The forum selection clause at issue provides in relevant part:You expressly agree that exclusive jurisdiction for any claim or dispute with AOL or relating in any way toyour membership or your use of AOL resides in the court of Virginia and you further agree and expresslyconsent to the exercise of personal jurisdiction in the courts of Virginia in connection with any suchdispute . . . .A reasonable forum selection clause is generally enforceable. See Carnival Cruise Lines, Inc. v. Shute, 499U.S. 585; Cambridge Biotech Corporation v. Pasteur Sanofi Diagnostics, 433 Mass. 122 (2000)( forumselection clause in freely negotiated international transaction should be enforced “so long as it is fair andreasonable to do so”). In Jacobson v. Mailboxes Etc., U.S.A., Inc, 419 Mass. 572 (1995), applyingCalifornia law, the SJC concluded that the forum selection clause did not apply to harm which occurredbefore the parties entered into a contractual relationship. That forum selection clause specifically stated that“venue and jurisdiction for all actions enforcing this agreement” were agreed to be in California.. The SJCstated that if the majority of plaintiffs’ claims arose from the contract itself, all claims should be decided inCalifornia. If, however, the majority of the claims arose from precontract conduct, the forum selectionclause should not be enforced. Id. at 579.AOL argues that its forum selection clause is broader than that in Jacobson because the provision in thiscase applies to “any claim or dispute with AOL.” However, that argument does not address plaintiffs’ claimthat their injury, or those of others similarly situated, occurred before they had an opportunity to accept orreject the forum selection clause.Based on affidavits of David Cass, a computer and database consultant, and plaintiff Mastroianni, plaintiffscontend that the AOL 5.0 program performed the change in computer configuration at the beginning of theinstallation process before plaintiffs or other putative class members had an opportunity to agree to the TOS.Both affidavits show that plaintiffs and others similarly situated could reasonably claim inadequate notice ofthe AOL forum selection clause.Cass, who has more than 20 years experience with mainframe and personal computers, owns and operatesCass, Inc., a provider of database and computer support services. In his affidavit, Cass describes in detail theAOL 5.0 installation process. He states that the alleged harm occurs before the user clicks “ I agree”. Hedescribes a complicated process by which subscribers “agree” to


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CMU ISR 08732 - MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS

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