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Tricome v. Ebay

October 19, 2009

DOMENIC TRICOME, PLAINTIFF,
v.
EBAY, INC., ET AL. DEFENDANTS.



The opinion of the court was delivered by: Jones II, J.

MEMORANDUM

Presently before the Court is Defendant eBay, Inc.'s Motion to Dismiss or Transfer Plaintiff's Amended Complaint (Docket No. 16), Plaintiff's Response thereto, and Defendant's Reply.*fn1 The Motion will be granted in part.

I. Background and Facts

EBay, Inc. ("Defendant") operates an online marketplace on which "users" -- i.e., individuals who register to use eBay's services -- may list items they wish to sell and through which buyers may purchase items from third-party sellers. In order to buy or sell on eBay, individuals must first register. As part of the registration process, a potential user must complete a registration form and electronically submit the form to eBay. In order to activate the registration process, the potential user must read and agree to eBay's User Agreement, which contains the terms and conditions pertaining to the relationship between the user and eBay. The potential user must accept the User Agreement by affirmatively checking a box that states "I accept the User Agreement and Privacy Policy," and then clicking on a button to continue with the registration process. Users who do not check the box stating "I accept the User Agreement and Privacy Policy" are not permitted to complete the registration process. The eBay User Agreement contains a provision (the "Forum Selection Clause") that specifically requires that disputes between eBay and its users be resolved through a court action filed in Santa Clara County, California. See User Agr., Resolution of Disputes.

In 2006, Domenic Tricome ("Plaintiff") was the owner/operator of www.supplementmarket.com, an online store which allowed customers to purchase various types of vitamins and supplements. Am. Compl. at 2. In conjunction with Plaintiff's own website, Plaintiff also listed items from his store for auction on eBay's website, www.ebay.com. Id. When Plaintiff registered with eBay, he explicitly followed the registration procedures by clicking the box stating "I accept the User Agreement and Privacy Policy." Had Plaintiff not clicked that box, he would not have been allowed to register.

Plaintiff was ranked as an "expert seller" by eBay's electronic ranking system. Id. In 2006, Plaintiff informed eBay that he had wrongfully received "negative feedback" from one of eBay's customers "in an attempt to extort the Plaintiff." Id. In response, eBay informed Plaintiff that it could take no action on Plaintiff's behalf and that Plaintiff's only recourse would be to file a civil action against the customer at issue. Id. at 3. Plaintiff thereafter filed such a civil action. Id. Upon learning of that civil action, eBay terminated Plaintiff's eBay account. Id. Plaintiff alleges that the termination forced him to sell his business at a fraction of what it was worth. Id.

Plaintiff filed an Amended Complaint on July 16, 2009, against eBay and its directors.*fn2

In his brief Complaint, Plaintiff "seeks recovery in fraud, negligence, gross negligence, breach of contract and negligent infliction of emotional distress," and "seeks to recover losses, costs, and attorneys' fees" pursuant to "the Sherman Antitrust Act." Id. at 1. Plaintiff is a Pennsylvania resident. Ebay is a California corporation with its principal place of business in California.

II. Discussion

A. Forum Selection Clause

A forum selection clause is prima facie valid "and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances." Applied Card Systems, Inc. v. Winthrop Resources Corp., No. Civ. A. 03-4104, 2003 WL 22351950, *2 (E.D. Pa. Sept. 23, 2003) (citing The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972)). See also Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30 (1988) (holding that, although not fully dispositive, a forum selection clause is to be given "substantial consideration" and overcomes a court's usual deference to the plaintiff's choice of forum); Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3d Cir. 1995) ("[A] forum selection clause is...a manifestation of the parties' preferences as to a convenient forum."). Where the forum selection clause is valid, the plaintiff "bear[s] the burden of demonstrating why [he] should not be bound by the[ ] [parties] contractual choice of forum." Id.

Plaintiff argues that the Forum Selection Clause contained in the User Agreement should not be enforced because the User Agreement is a standard form contract which is procedurally and/or substantively unconscionable.

Procedural unconscionability is generally found where the agreement is a contract of adhesion. Alexander v. Anthony Int'l., L.P., 341 F.3d 256, 265 (3d Cir. 2003). Plaintiff contends that this Court should find the User Agreement to be a contract of adhesion because "[p]laintiff never had the opportunity to discuss, much less negotiate the [Forum Selection Clause]." See Pl's Resp. at 9. A contract is not necessarily one of adhesion simply because it is a form contract, Feldman v. Google, 513 F. Supp. 2d 229, 241 (E.D. Pa. 2007), and failure to read the terms of an agreement is not a defense, Wilson of Wallingford v. Reliable Date Sys., Inc., 1995 WL 734232, at *2 (E.D. Pa. Dec. 5, 1995). Furthermore, failure to negotiate does not render an otherwise valid forum selection clause invalid. See Great W. Mortgage Corp. v. Peacock, 110 F3d 222, 229 (3d Cir. 1997) (illustrating that more than a disparity in bargaining power is needed in order to show that an agreement was not entered into willingly); Pritzker v. Merril Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1118 (3d Cir. 1993) (same); Wilson of Wallingford, 1995 WL 734232, at *2 (indicating that a party is presumed to have received appropriate consideration for a forum selection clause).*fn3 The United States Supreme Court has explicitly held that a forum selection clause in a standardized, non-negotiable contract may be quite permissible. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593-94 (1991) (finding the non-negotiable forum selection clause to be acceptable because the cruise line had a special interest in limiting fora as it could be subject to suit in many locales). Instead, the touchstone for unacceptability is whether the party challenging the agreement had any meaningful choice regarding acceptance of its provisions. Grant, 2009 WL 1845231 at *6.

The Court concludes that the User Agreement is not a contract of adhesion because of its Forum Selection Clause. Agreeing to the User Agreement, and thus all of its terms, was not necessary for Plaintiff; instead, Plaintiff did so merely to increase his business opportunities (and thus, his profits). Plaintiff had the opportunity to carefully read the User Agreement and reject the terms contained therein. However, he accepted the User Agreement. Moreover, eBay did not engage in high pressure tactics or put external pressure on Plaintiff to accept the User Agreement -- it simply made the opportunity available to the general public. Here, Plaintiff -- an experienced businessman -- sought out eBay's services, chose to become a registered user of eBay, and by doing so acknowledged that he had read and agreed to the terms of the User Agreement, including the Forum Selection Clause. ...


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