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Evans v Linden TOS Upheld

Evans v Linden TOS Upheld

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Published by Eric Goldman
Second Life rewrites user agreement's arbitration clause and the court upholds its forum selection clause--reaching a different result than the Bragg case
Second Life rewrites user agreement's arbitration clause and the court upholds its forum selection clause--reaching a different result than the Bragg case

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Published by: Eric Goldman on Feb 08, 2011
Copyright:Attribution Non-commercial

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02/08/2011

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-1-IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF PENNSYLVANIACARL EVANS, et al., : CIVIL ACTION: NO. 10-1679Plaintiffs, ::v. ::LINDEN RESEARCH, INC., et al, ::Defendants. :M E M O R A N D U MEDUARDO C. ROBRENO, J. FEBRUARY 3, 2011
INTRODUCTION
Plaintiffs Carl Evans, Donald Spencer, Valerie Spencer,and Cindy Carter (collectively “Plaintiffs”) initiated thiscontract and tort action against Defendants Linden Research, Inc.(the “Linden”) and Philip Rosedale (“Rosedale”), (collectively“Defendants”) on
Defendants bring three motions: (1) Motion to DismissCount I, arguing that Plaintiffs did not file their Complaintappropriately under
 
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Defendants move to dismiss Count I, alleging thatPlaintiffs violated the CLRA by failing to file a “venueaffidavit” concurrently with the Complaint. (Def. Mot. toDismiss, doc. no. 11, page 22). To bring an action under theCLRA, a plaintiff is required to file an affidavit “concurrentlywith the filing of the complaint” stating “facts showing that theaction has been commenced in a county or judicial districtdescribed in this section as a proper place for the trial of theaction.” Cal. Civ. Code § 1780(d). “If a plaintiff fails tofile the affidavit required by this section, the court shall,upon its own motion or upon motion of any party, dismiss theaction without prejudice.” Id.However, California’s venue affidavit requirement is aprocedural rule under Erie and as such, the Plaintiff in thiscase is not required to follow it. Whether a state rule issubstantive or procedural involves a two step analysis. First,the Court must determine whether the state rule is in directconflict with a Federal Rule of Civil Procedure. Id.; Hannah v.Plumer, 380 U.S. 460 (1965). If so, the Federal Rule prevails.See Gasperini v. Center for Humanities, Inc., 518 U.S. 415(1996). However, if there is no direct conflict, the courtconsiders the “twin aims” of the Erie doctrine: “discouragementof forum shopping and avoidance of inequitable administration ofthe laws.” Hannah, 380 U.S. at 468. The Supreme Court has addedtwo qualifications to the Erie analysis. First, a strong federalinterest may dictate the application of the federal rule.Second, the Erie doctrine cannot be used to avoid a Federal Ruleof Civil Procedure. See Chamberlain v. Giampapa, 210 F.3d 154,159 (3d Cir. 2000) citing Byrd v. Blue Ridge Rural ElectricCoop., Inc., 365 U.S. 525, 538 (1958); Hannah, 380 U.S. at 470.California’s venue affidavit requirement is aprocedural rule. Although there is no direct conflict with aFederal Rule of Civil Procedure or a local rule, the venueaffidavit requirement asks Plaintiffs to provide additional venuematerials that federal courts do not. Ultimately, the venueaffidavit requirement is procedural (regardless of a conflict)because application of the requirement does not have asignificant impact on the outcome of the case. Under therequirement, the only penalty for failing to provide theaffidavit is to have the claim dismissed without prejudice. Thus,Defendants’ Motion to Dismiss Count I of Plaintiffs’ Complaintwill be denied.
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; (2) Motion to Dismiss Plaintiffs’ Complaint in itsentirety, arguing that the case must be brought in the NorthernDistrict of California pursuant to a mandatory forum selectionclause in the relevant terms of service agreed to by the
 
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Defendants argue in the alternative that if the Courtdenies Defendants’ Motion to Dismiss for Lack of Jurisdiction,this case should be transferred to the Northern District ofCalifornia under 28 U.S.C. § 1404(a). As the Court finds thatthe forum selection clause applies in this case and as the Courtis transferring the case to the Northern District of California,this argument is moot.
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Plaintiffs; and (3) Motion to Transfer, arguing that if the Courtdoes not dismiss Plaintiffs’ Complaint, the case should betransferred to the Northern District of California as a moreappropriate forum
under 28 U.S.C. § 1404(a)
.is granted in part and denied in part
, and the case willbe transferred to the Northern District of California.

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