D.C. Circuit Upholds Forum Selection Clause For Virginia Forum
Even For Class Actions Which Virginia Does Not Recognize
The U.S. Court of Appeals for the District of Columbia Circuit decided Forrest v. Verizon Communications on August 20, 2002. (D.C. App. No. 01-CV-1101). In a case of first impression for this circuit, the court adopted the prevailing rule that a forum selection clause in a contract is presumptively valid absent unreasonableness or unfairness. The case involved a standard, boilerplate clause in Verizon’s customer contract for DSL service. The plaintiff was a D.C. resident. The contract clause provided for exclusive personal jurisdiction and venue in a court of competent jurisdiction in Fairfax County, Virginia.
The suit was brought as a putative class action in the D.C. Superior Court challenging Verizon’s alleged contract breaches, negligent misrepresentation, and violations of the Virginia consumer protection laws. In a resounding affirmation of the validity of the forum selection clause, the D.C. Circuit affirmed the Superior Court’s dismissal.
Among other things, the court stated:
1. A boilerplate forum selection clause is enforceable, even if it is not in boldface, as reasonable, and it is presumed that the customer read it. It is enforceable even if the customer did not read the clause if he had the opportunity to do so.
2. There were no facts showing that the clause was unreasonable or unfair. Such a showing would require fraud, overreaching, the creation of such an unfair and inconvenient burden as to deprive the plaintiff of any remedy if enforced, or the violation of a strongly stated public policy in the forum where the case is filed.
3. The fact that the case was a class action, that D.C. recognizes class actions, and that Virginia does not, does not render the clause unfair because there is no duty to inform the consumer of every nuance of Virginia procedural remedies. There is no duty to give extra notice that Virginia does not recognize class actions.
4. Even as to claims arising outside of the contract, such as under the Virginia consumer protection law, the clause is enforceable because non contract claims that arise out of the same operative facts are governed by the selection clause.
As the D.C. Circuit acknowledged, its decision adopts the more modern line of authority that has evolved in today’s interstate and global economy that favors businesses being allowed to select a single forum to resolve disputes with contracting parties, a line of cases that began with the Supreme Court’s 1972 decision in The Bremen v. Zapata Offshore Co.,407 U.S. 1.
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