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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

 DALLAS DIVISION

ELAINE ABRAMSON, §

 §

Plaintiff, §

 §

v. § Civil Action No. 3:05-CV-0076-M

 §

AMERICA ONLINE, INC., §

 §

Defendant. §

MEMORANDUM OPINION AND ORDER

Before the Court is the Motion to Dismiss filed by Defendant America Online, Inc. (“AOL”)

on March 2, 2005. Plaintiff has requested oral argument of Defendant’s Motion. The Court

DENIES Plaintiff’s request for oral argument and DENIES Defendant’s Motion to Dismiss. The

Court finds that Plaintiff filed this suit in an improper forum, and therefore TRANSFERS the suit

to the United States District Court for the Eastern District of Virginia. See 28 U.S.C. § 1406(a)

(2005). 

Background 

Plaintiff Elaine Abramson (“Abramson”) is a professional artist, who designs and licenses

children’s cartoon characters. In 1999, Abramson obtained an internet account with AOL, and began

using the email address AAArtwork@aol.com in connection with her business. Abramson claims

that since January of 2002, AOL has permitted her email address to be used as the purported

originator of “thousands of emails. . . with a pornographic or otherwise lascivious content.” She

asserts claims against AOLfor breach of contract, negligence, deceptive trade practices, conversion,

an unspecified copyright offense, and a violation of the Lanham Act. 

 

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In its Motion to Dismiss, AOL alleges Abramson is bound by a forum selection clause,

contained in its Member Agreement, which obligates her to file suit exclusively in “the courts of

Virginia”. In response, Abramson alleges she did not agree to be bound by the Member Agreement,

and had no actual notice of its existence. She claims her son set up her AOL account for her. In

addition, Abramson protests that dismissal would result in some of her claims being barred by

statutes of limitations, and that she would suffer financial hardship if forced to reinitiate her suit in

Virginia. 

Analysis

I. Validity of the Member Agreement

Before the Court turns to the forum selection clause, it must determine whether a valid

contract exists between the parties. Plaintiff argues she is not bound to the Member Agreement,

because her son set up her AOL account on her behalf, and because she never received actual notice

of the Agreement. However, under Texas agency law, Abramson is bound under the Agreement if

she: (1) gave her son actual authority to sign it on her behalf; (2) conferred apparent authority on her

son by acting in such a way as to indicate to a reasonably prudent person that her son had authority

bind her; or (3) ratified the contract. Humble Nat. Bank v. DCV, Inc., 933 S.W.2d 224, 237 (Tex.

App.-- Houston [14 Dist.] 1996, writ denied). Ratification occurs where the principal’s “acts,

conduct or affirmative acquiescence” indicate her willingness to be bound to a contract, despite her

lack of signature thereon. Little v. Clark, 592 S.W.2d 61, 64 (Tex. Civ. App.--Fort Worth 1979,

writ ref'd n.r.e.). 

It is unclear from the evidence before the Court whether Abramson gave her son actual

authority to bind her to the Member Agreement when he created an AOL account for her. In her

Affidavit, Abramson claims she expressed her desire for internet access to her husband, who then

 

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asked their son to create the account. The evidence does not indicate whether Abramson expressly

agreed to delegate this task to her son. However, assuming the son did not have actual authority, the

Court finds Abramson gave her son apparent authority to bind her to the Member Agreement. A

principal confers apparent authority on her agent when she knowingly or voluntarily permits the

agent to hold himself out as her representative. See id. at 63-64 (husband was bound under a real

estate contract because he permitted his wife to sign his name). Here, Abramson gave permission,

either directly or through her communications with her husband, for her son to agree electronically

to the contract with AOL. 

In the alternative, the Court finds Abramson ratified the contract. Abramson admits that

immediately after her son initiated her AOL account, he informed her that he had done so.

Abramson subsequently accepted the benefits of that transaction, and took affirmative actions to

reinstate her service on several occasions, after it was suspended for non-payment. Although there

is no evidence indicatingwhether she actually became aware of the terms of the Member Agreement,

it is beyond doubt Abramson knew her service with AOL was subject to a contract. Her failure to

review the terms of that contract, while accepting its benefits, demonstrates affirmative acquiescence

to the Member Agreement. See Motel Enterprises, Inc. v. Nobani, 784 S.W.2d 545, 547 (Tex. App.-

Hous. [1 Dist.] 1990, no writ) (ratification may be “inferred from the existing facts and

circumstances, as where a party retains the benefits of an invalid contract with full knowledge of the

facts that make the contract voidable”).

II. Enforceability of the Forum Selection Clause

 A party seeking to enforce a contractual forum selection clause may pursue one of two types

of relief from the Court: (1) dismissal of its opponent’s claims, under FED. R. CIV. P. 12(b)(3), for

improper forum; or (2) transfer of its opponent’s claims to the forum contemplated by the contract.

 

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The Fifth Circuit, in Int'l Software Sys., Inc. v. Amplicon, Inc., 77 F.3d 112, 115 (5th Cir.1996), held

that Motions to Dismiss based on forum selection clauses are examined under the test outlined in

M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972). See also Vartec Telecom, Inc. v. BCE Inc.,

2003 WL 22364302 (N.D. Tex. Oct. 9, 2003) (same). The Bremen test requires that the Court treat

forum selection clauses as prima facie valid, and enforce them “unless enforcement is shown by the

resisting party to be unreasonable under the circumstances.” Bremen, 407 U.S. at 10. In contrast,

when a party asserts a Motion to Transfer Venue, the Court engages in an “individualized,

case-by-case consideration of convenience and fairness.” Amplicon, 77 F.3d at 115, citing Stewart

Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988). 

Here, AOL has asserted a Motion to Dismiss, rather than a Motion to Transfer Venue.

Consequently, Abramson bears the heavy burden, under Bremen, of showing: (1) the incorporation

of the forum selection clause into the agreement was the “product of fraud or overreaching”; (2) she

will “for all practical purposes be deprived of [her] day in court because of the grave inconvenience

or unfairness of the selected forum”; (3) the fundamental unfairness of the chosen law will deprive

her of a remedy; or (4) enforcement of the clause would contravene strong public policy of the forum

state. Haynsworth v. The Corporation, 121 F.3d 956, 963 (5 Cir. 1997). th

A. Incorporation of the Forum Selection Clause Was Not the Product of Fraud or Overreaching

Under the Bremen test, the question is not whether the contract, itself, is the product of fraud

or overreaching. Instead, the Court’s focus is whether the inclusion of the forum selection clause

in the contract was fraudulent or coerced. Haynsworth, 121 F.3d at 963. Plaintiff does not allege

AOL engaged in fraud or any deceitful activity. She argues the clause is overreaching because it

consists of a boilerplate provision in a contract of adhesion. 

The Supreme Court has held that forum selection clauses in form types of contracts are

 

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enforceable, so long as they satisfy “judicial scrutiny for fundamental fairness.” Carnival Cruise

Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991) (upholding a clause that was contained within the fine

print that accompanied the plaintiffs’ cruise tickets). The forum selection clause in Carnival was

held to be fair, despite the disparity of bargaining power between the parties, because: (1) the

defendant had a valid reasoning for limiting the fora in which it could be subject to suit; (2) the

defendant was headquartered in the chosen forum; (3) the clause reduced confusion for prospective

litigants; and (4) the clause likely benefited the plaintiffs by reducing the price they paid for the

defendant’s services. See id. at 594. Each of the same arguments apply in this case, and suggest that

the forum selection clause in AOL’s Member Agreement is not fundamentally unfair. Plaintiff’s

efforts in her Response to distinguish Carnival and its progeny are unpersuasive. 

In the alternative, the Court finds Plaintiff cannot show the insertion of the clause represents

overreaching. The form nature of the contract and alleged disparity of bargaining power apply to the

Member Agreement as a whole. Abramson has not alleged that Defendant’s insertion of the forum

selection clause into the Member Agreement was, in isolation, an act of overreaching. Therefore,

she has not satisfied the first prong of the Bremen test. See Haynsworth, 121 F.3d at 963.

B. Abramson Will Not Be Deprived of Her Day in Court By the Grave Inconvenience or

Unfairness of the Chosen Forum

Abramson argues she will suffer grave inconvenience if the Court dismisses her claims,

because some of her claims will be barred by statutes of limitations. She also claims that her

financial circumstances make her unable to retain new counsel to reassert her claims in Virginia.

The Court finds that these assertions, if true, do not satisfy Abramson’s burden under Bremen. 

The evidence before the Court indicates Abramson had knowledge of the facts underlying

each of her causes of action in early 2002. Abramson admits that soon after AOL allegedly allowed

 

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her email account to be used to transmit pornographic and other unauthorized emails, she began

receiving complaints from recipients of those communications. However, Abramson inexplicably

did not file suit until January of 2005. Assuming Abramson will be inconvenienced if the Court

dismisses her claims, the evidence indicates her inconvenience will be caused by her delay in filing

suit, rather than any characteristic of the parties’ chosen forum. 

Abramson's assertion that she may not be able to afford to retain counsel in Virginia is also

insufficient to demonstrate the unfairness or grave inconvenience of the Virginia courts. This Court

notes no evidence that Plaintiff cannot obtain counsel in Virginia on a contingent fee basis. As the

Supreme Court suggested, in dicta, in Carnival, the expense of trying a case in a particular forum

is insufficient to satisfy a party's burden under Bremen. See Carnival, 499 U.S. at 594. The Court

finds no evidence that the consequence of granting AOL’s Motion is so grave as to deny unfairly to

Plaintiff her day in court. 

C. Abramson’s Claims Will Not Be Subjected to Fundamentally Unfair Law

Plaintiff has not alleged that a transfer of her claims to Virginia would subject her claims to

law that is “fundamentally unfair”, and therefore, this element of the Bremen test weighs in favor of

granting AOL’s Motion to Dismiss. 

D. Enforcement of the Clause Does Not Contravene Strong Public Policy of the State of Texas

 Abramson alleges that enforcement of the forum selection clause would violate public policy

of the State of Texas, because it would bind her to a contract she never read. However, as discussed

above, Texas law binds her to the Member Agreement by virtue of her agency relationship with her

son, and her subsequent ratification of the contract. A person in Abramson’s position has a duty to

read the “plain terms of the agreement”, and cannot rely solely on another person’s representations.

Haynsworth, 121 F.3d at 965. Therefore, as the Fifth Circuit has indicated, enforcement of a forum

 

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selection clause against a party who has chosen not to read the terms of her contract does not conflict

with the public policy interests of the State of Texas. Id., at 966.

Remedy

Plaintiff has failed to satisfy her heavy burden, under Bremen, of showing the forum selection

clause is unenforceable. As a result, the Court has discretion to either dismiss her claims or transfer

the case, sua sponte, under 28 U.S.C. § 1406(a). (if the Court determines a case is sitting in the

wrong district or division, it “shall dismiss, or if it be in the interest of justice, transfer such case to

any district or division in which it could have been brought”); See also Jackson, 245 F.3d at 522-23;

Caldwell v Palmetto State Sav. Bank, 811 F2d 916, 919 (5 Cir. 1987). The Court is of the opinion th

that justice would be served by transferring Abramson’s claims to Virginia. See, e.g. National Voice

Communications, Inc. v. Federal Transtel, Inc., 2001 WL 460867 (N.D. Tex. Apr 30, 2001) (the

Court, finding the defendant had proven improper venue, elected to transfer the plaintiff’s claims to

Georgia, as an alternative to dismissing them). 

It is therefore ORDERED that AOL’s Motion to Dismiss is DENIED, and this suit is

TRANSFERRED to the United States District Court for the Eastern District of Virginia.

SO ORDERED.

DATED: May 25, 2005.

___________________________

Barbara M. G. Lynn

UNITED STATES DISTRICT JUDGE

 

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