Net2Phone, Inc. v. The Superior
Court of Los Angeles County
Court of Appeal of the State of
California - Second Appelate District - Division Five
Decided Ju
ne
9, 2003
OPINION
In this mandamus proceeding, we hold that where a
private plaintiff which has itself suffered
no injury files a representative action under California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.)1
alleging that certain of defendant’s contractual
provisions subject its customers to an "unlawful, unfair or fraudulent
business. . . practice" and the contract contains a forum selection
provision, the plaintiff is bound by that
provision just as defendant’s customers would be bound had they filed the
action themselves.
FACTS AND PROCEDURAL HISTORY
Net2Phone provides internet telecommunication
services, commonly known as "telephony
services," that allow a computer user to place phone calls over the
internet, either to another computer or to a
regular telephone. Net2Phone has a worldwide customer
base, but its principal place of business is in New Jersey. Customers who wish to utilize Net2Phone’s services must download
software from Net2Phone’s website. The software
has links to an "End User License Agreement" and "Terms of Use."
The customer must accept both in order to use
the software. Net2Phone also offers a direct calling
card, also purchased via Net2Phone’s website, that enables customers to use a regular telephone to make a call that is carried
through the internet and then switched back
to a local telephone network. According to Net2Phone, both services allow customers to make long distance calls for
substantially less than current rates for traditional
calling methods. The "Terms of Use" hyperlink appears on each page of
the website. Language on the website advises
the user that in order to access the site, he or she
must agree to be bound by the "Terms of Use." The pertinent language
concludes: "If you do not wish to be
bound by these Terms of Use, you may not access or use the Site,
Materials, or any of the Services. By using the Materials or Service, you are agreeing to be bound by these Terms of Use." Consumer Cause contends Net2Phone’s failure to
disclose in its advertising and promotional
materials its billing practice of "rounding up" to the nearest minute
(that is, charging for its services in
full-minute increments regardless of use time) renders Net2Phone’s
promotional materials and advertising "false, misleading and fraudulent in violation of Business and Professions Code section
17200." Consumer Cause further contends
Net2Phone’s failure to disclose its billing practices except in its
"Terms of Use" and "End User
License Agreement," which are accessed via highlighted hyperlink, constitutes
an unfair business practice under the UCL. It seeks an injunction, restitution and attorney’s fees.
The "End User License Agreement" and
"Terms of Use" contain forum-selection clauses
providing that disputes arising under the contract shall be governed by New Jersey law. The clauses further provide: "Any
dispute between you and Net2Phone regarding
this agreement will be subject to the exclusive jurisdiction of the state and federal courts in the State of New Jersey. You agree
to submit to exclusive jurisdiction in the
State of New Jersey, and you expressly waive all defenses to jurisdiction." Citing these forum selection provisions, Net2Phone
filed a motion to stay or dismiss the action.
(Code Civ. Proc., § 410.30, subd. (a).)2 Consumer Cause
opposed the motion, arguing it should not be
bound by the forum selection clause in the contract because
it was neither a party to the contract nor "closely related" to those
who were. Consumer Cause further argued that
its UCL claim was exempt from the forum selection clause
because Net2Phone had failed to demonstrate that New Jersey was a suitable alternative forum for the action; unlike the UCL,
which permits a plaintiff who himself has not
suffered any injury to bring an action on behalf of the general public, New Jersey’s Consumer Fraud Act (N.J.S.A. 56:8-1 to
20) permits only an injured party or the Attorney
General to file such an action. Respondent
court found that Consumer Cause was not bound by the forum selection
clause in Net2Phone’s user agreement because Consumer Cause was acting as a private attorney general, and "had the real
Attorney General brought this action, I would doubt
if this court would be sending him to New Jersey to try the matter." The
court ruled that Consumer Cause could pursue
this action in California, but the action would be governed
by New Jersey law.
We agree with respondent court that an unfair
competition action brought by a public
prosecutor would not be subject to the forum selection clause. This is because
of the fundamentally different nature of an
action brought by a prosecutor and privately pursued
representative actions. (See Payne v. National Collection Systems, Inc. (2001) 91 Cal.App.4th 1037, 1045-1047.) Although the label
"private attorney general" is often used
(or misused) to describe a private plaintiff in a UCL action, respondent court construed the term too literally. The filing of a
UCL action by a private plaintiff does not confer
on that plaintiff the stature of a prosecuting officer, and the fact that the
plaintiff may be acting as a so-called
"private attorney general" is irrelevant for purposes of the issue
presented here. The relevant inquiry in determining whether a plaintiff, not a
party to a contract, is bound by the contract’s
forum selection clause is whether (1) the third party
is "closely related to the contractual relationship," and (2) the
contractual forum state (in this case, New
Jersey,) provides a "suitable alternative forum" for the lawsuit. Both requirements are met here.
DISCUSSION
Both the United States Supreme Court and the
California Supreme Court have recognized that
"[f]orum selection clauses play an important role in both national and interstate commerce." (Lu v. Dryclean-USA of
California, Inc. (1992) 11 Cal.App.4th 1490,
1493, citing M/S Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1, 10,
15; Smith, Valentino
& Smith, Inc. v. Superior Court [(1976)]
17 Cal.3d [491,] at p. 496.) Such clauses
provide a degree of certainty, both for businesses and their customers, that contractual disputes will be resolved in a
particular forum. (Carnival Cruise Lines, Inc. v. Shute (1991)
499 U.S. 585, 593-594, 113 L.Ed.2d 622, 111 S.Ct. 1522, 1527.) California
courts routinely enforce forum selection clauses even where the chosen forum is far from the plaintiff’s residence. (See, e.g. Intershop
Communications AG v. Superior Court (2002)
104 Cal.App.4th 191, 196-202 [Hamburg, Germany forum]; CQL
Original Products, Inc. v. National
Hockey League Players’ Assn. (1995) 39
Cal.App.4th 1347, 1355-1356 [Ontario, Canada
forum].)
When a forum selection clause appears in "a
contract entered into freely and voluntarily
by parties who have negotiated at arm’s length, . . . forum selection clauses are valid and may be given effect, in the court’s
discretion and in the absence of a showing
that enforcement of such a clause would be unreasonable." (Smith,
Valentino & Smith, Inc. v.
Superior Court (1976) 17 Cal.3d 491,
495-496.) This rule "accords with ancient
concepts of freedom of contract and reflects an appreciation of the expanding horizons of American contractors who seek business
in all parts of the world." (M/S Bremen v Zapata Off-Shore Co. (1972)
407 U.S. 1, 10.)
A forum selection clause may also be enforced
against a plaintiff who is not a party to the
contract in question if the plaintiff is "closely related to the
contractual relationship." The plaintiff
challenging the forum selection clause has the burden of showing,
in response to a defendant’s motion to stay or dismiss, that enforcement of
the clause would be unreasonable under the
circumstances. (Lu v. Dryclean-U.S.A. of California, supra,
11 Cal.App.4th at p. 1493.)
Consumer Cause is "closely related"
to the contract between Net2Phone and its customers. As a threshold matter, we find that the forum
selection clause would be enforceable had
Net2Phone’s customers filed this action themselves. We perceive no unfairness
in Net2Phone’s requirement that certain contractual terms must be accessed via hyperlink, a common practice in internet
business. The fact that the forum selection clause
may have been a "take it or leave it" proposition, and not vigorously
"bargained for" as Consumer Cause
contends, does not make the clause unenforceable. (Carnival Cruise Lines, Inc. v. Shute, supra, 499
U.S. at pp. 593, 601.)
Although Consumer Cause is not itself a party to
the contract, it has sued in a representative
capacity challenging certain contractual terms. By so doing, Consumer Cause
purports to assert the rights of those who are parties to the contract.
If it prevails, Consumer Cause will succeed
in altering the terms of the contract, and reap the fruits of victory
including attorney’s fees. Consumer Cause is "closely related" to
the contractual relationship because it
stands in the shoes of those whom it purports to represent. Its argument
to the contrary is inconsistent with its position as a representative plaintiff. Were we to hold otherwise, a plaintiff could avoid a
valid forum selection clause simply by having
a representative non-party file the action. (See Lu
v. Dryclean USA, Inc., supra, 11
Cal.App.4th at p. 1494.)
In Lu, a franchisor’s corporate parent
was found to be "closely related" to the contractual
relationship between the franchisor and its franchisee, because the franchisor was alleged to have participated in the fraudulent
misrepresentations that induced the plaintiff
to enter into the franchise agreement. Consumer Cause correctly points out that the case is factually distinguishable on that basis.
However, the plaintiff in Lu also alleged
that the parent was the "alter ego" of the franchisor that signed the
franchise agreement; in other words, for
purposes of the lawsuit, the two were one and the same. The
position of Consumer Cause, the representative plaintiff, is similar in that
respect.
Bancomer, S.A. v. Superior Court (1996)
44 Cal.App.4th 1450, cited by Consumer Cause
in its return to the petition, is distinguishable. That case involved a bank
that had no relationship to the contractual
dispute other than being thrust into a position as trustee, and
which was attempting to enforce, not defeat, a forum selection clause. Unlike Consumer Cause, the bank in that case had nothing to
gain from resolution of the contractual
dispute. America Online, Inc. v. Superior
Court (2001) 90 Cal.App.4th 1, cited by Consumer Cause, is also factually distinguishable.
In that case, a class action filed pursuant
to the California Consumers Legal Remedies Act (CRLA) (Civ. Code, § 1750 et seq.), the court held a forum selection clause
invalid because the CRLA contains a provision
that voids any purported waiver of rights as being contrary to California public policy. The UCL, under which Consumer Cause brought
this action, contains no such limitation.
New Jersey is a suitable alternate forum.
The Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to
20, is similar in many ways to the UCL.
However, it differs from the UCL in one crucial respect: an action under the CFA must be filed by either the Attorney General or
"[a]ny person who suffers any ascertainable
loss of moneys or property. . . ." Because Consumer Cause has itself suffered no ascertainable loss from Net2Phone’s
alleged unlawful business practices, it argues
that enforcement of the forum selection clause would be unreasonable because it would not have standing to bring this action in New
Jersey. Although the New Jersey legislature
has not seen fit to confer on private parties who
are not injured the right to bring a representative action on behalf of those
who are, this does not necessarily mean that
New Jersey does not provide the means to protect injured
consumers. Any customer of Net2Phone who claims to have been injured by Net2Phone’s
billing practices may bring an action in New Jersey, or may prevail on the Attorney General of New Jersey to do so.
Significantly, Consumer Cause does not claim Net2Phone’s
customers would not be adequately protected were they required to pursue their
claims in New Jersey. Instead, Consumer Cause has focused only in its own lack
of standing. While it is true that Consumer
Cause stands to lose the opportunity to recover attorney’s
fees should it prevail in a California UCL action, our paramount consideration is the protection of consumers, not the enrichment
of attorneys.
DISPOSITION
The petition for writ of mandate is granted. A
peremptory writ shall issue directing
respondent court to vacate its order of October 1, 2002, denying the motion of defendant Net2Phone to stay or dismiss the action,
and enter a new and different order granting
the motion to stay. Costs are awarded to Net2Phone.
CERTIFIED FOR PUBLICATION
ARMSTRONG, J.
I concur:
TURNER, P.J.
Net2Phone v. Superior Court
Case No. B162210
MOSK, J., Dissenting
I respectfully dissent.
A trial court’s decision to enforce or not
enforce a forum selection clause is reviewed
for an abuse of discretion. (Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457; but see Cal-State
Business Products & Services, Inc. v. Ricoh (1993)
12 Cal.App.4th 1666, 1680-1681 [substantial-evidence test].) For the following reasons, I do not believe the trial court abused its
discretion in refusing to enforce the forum
selection clauses in this case. The New
Jersey forum selection clause in the contracts between defendant Net2Phone,
Inc. (Net2Phone) and various consumers is not applicable or enforceable as to claims brought by plaintiff Consumer Cause, Inc.
(Consumer Cause) under California’s Unfair
Competition Law (Bus. & Prof. Code, § 17200 et seq.) (UCL).3
The enforcement of such forum selection
clauses to divest California of private attorney general
cases under the UCL is contrary to California public policy. If such clauses are enforceable, private attorney general actions under
California regulatory statutes could be frustrated.
In addition, the plaintiff is not a party to any contract with Net2Phone; the claims are statutory, not contractual; and New
Jersey is not a suitable alternative forum available
to plaintiff.
Public policy precludes enforcement of forum
selection clauses under these circumstances.
"California courts will refuse to defer to
the selected forum if to do so would substantially
diminish the rights of California residents in a way that violates our state’s public policy." (America Online, Inc. v.
Superior Court (2001) 90 Cal.App.4th 1, 12.) Enforcement
of the forum selection clause here would substantially diminish the rights of California residents in contravention of public
policy. The UCL prohibits "any unlawful,
unfair or fraudulent business act or practice and unfair,
deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of
Division 7 of the Business and Professions Code."
(§ 17200). The coverage of the UCL is "‘sweeping, embracing "‘anything
that can properly be called a business
practice and that at the same time is forbidden by law.’"’
[Citations.]" (Cel-Tech
Communications, Inc. v. Los Angeles Cellular Telephone Co.
(1999) 20 Cal.4th 163, 180.) A person (defined
to include a corporation (§ 17201)) who
undertakes such conduct may be enjoined from engaging in the unfair business practice and ordered to pay restitution. (§ 17203.)
The "primary purpose" of the UCL "is
to preserve fair business competition by extending
protections traditionally available to business competitors to the consuming public." (Rothschild v. Tyco Internat. (US),
Inc. (2000) 83 Cal.App.4th 488, 493.) The UCL
reflects "‘[T]he tendency of the law, both legislative and common . . .
in the direction of enforcing increasingly
higher standards of fairness or commercial morality in trade.’"
(People ex rel. Mosk v. National Research Co. (1962) 201 Cal.App.2d 765,
770.) Accordingly, the UCL constitutes an
important public policy of the State of California, notwithstanding
recent allegations of abuses in its use. (See Stern, Unfair Business Practices
and False Advertising: Bus. & Prof. Code § 17200 (5th ed. 2000), p. 5 [referring to the UCL as "a sprawling oak"
of consumer protection law].) That public prosecutors
in California must by California law be notified of UCL appellate proceedings
in California so that they may participate (§ 17209) is a further indication that the UCL reflects an important public policy of
California. In order to implement the
important public policies of the UCL, the Legislature provided
that multiple parties had standing to sue to enforce the act. Thus, rather than limiting enforcement of the UCL to aggrieved parties,
the Legislature specified that actions for
relief under the UCL may be brought by state or local prosecutors "in the name of the People of the State of California" "or
by any person acting for the interests of
itself, its members or the general public."
(§ 17204, italics added.) Accordingly, the UCL
allows anyone to act as, in effect, a private attorney general to protect the
public against certain commercial wrongs and
deceptions. The UCL reflects the Legislature’s conclusion
that individual claims or class actions in California courts or actions by California public officials are not adequate to
protect California consumers. To allow private
parties to restrict the availability of relief under the UCL to that offered by
the courts or public officials of another
state conflicts with the broad means of enforcement of
the UCL established by the California Legislature. That
restriction is precisely the effect of the majority’s opinion enforcing the forum selection clauses and sending this action to
New Jersey. New Jersey’s Consumer Fraud Act,
N.J.S.A. 56:8-1 to 20, does not allow private attorney general actions such as that brought by Consumer Cause here. The majority’s
opinion eviscerates the UCL by ordering the
dispute to a jurisdiction that does not permit private attorneys general to prosecute a statutory unfair competition action.
Contrary to the majority’s assertion, this is
not an issue of the "enrichment of attorneys."
(Maj. opn. ante, at p. 8.) It is an issue of preserving the statutory
scheme enacted by the Legislature and of
maintaining means of enforcing the UCL’s important public
policies. As this court recently observed, "‘[R]epresentative UCL actions
make it economically feasible to sue when
individual claims are too small to justify the expense of
litigation, and thereby encourage attorneys to undertake private enforcement
actions.’" (Rosenbluth Internat.,
Inc. v. Superior Court (2002) 101
Cal.App.4th 1073, 1077.) "Where the
subject of the action is an unlawful business practice or false advertising that harms individual consumers, the consumer/victims,
powerless individually, may welcome the
opportunity to have their rights vindicated in a representative action under the UCL." (Id. at pp. 1077-1078.)
The enforcement of forum selection clauses under
the circumstances of this case will allow
parties to conduct business in California but provide themselves with immunity
from one important and widely-used procedure to deter certain proscribed conduct—that
procedure being the enforcement of rights by private attorneys general. (See,
e.g., §§ 17200 & 17204; §§ 17500 & 17535; Code Civ. Proc., §
1021.5; Angelheart v.
City of Burbank (1991) 232 Cal.App.3d 460
[private attorney general principle applies to
constitutional rights, statutory rights and important public policies].)
In Hall v. Superior Court (1983) 150
Cal.App.3d 411 (Hall), the court held that a forum
selection clause could not be enforced so as to result in an evasion of the protections of California’s Corporate Securities
Law (Corp. Code, § 25000 et seq.). In America
Online, Inc. v. Superior Court, supra, 90
Cal.App.4th 1 (America Online) the court
held that a forum selection clause could not be enforced in connection with an action under California’s Consumers Legal Remedies
Act (Civ. Code, § 1750 et seq.). As stated
in America Online, "In this respect injunctive relief afforded by
the CRLA is unique, as its purpose is not
simply to correct future private injury but to remedy a public wrong.
As explained by our Supreme Court in Broughton
[v. Cigna Healthplans of California (1999)]
21 Cal.4th [1066] at page 1080: ‘Whatever the individual motive of the
party requesting injunctive relief, the benefits of granting injunctive relief
by and large do not accrue to that party, but
to the general public in danger of being victimized by
the same deceptive practices as the plaintiff suffered. . . . In other words,
the plaintiff in a CLRA damages action is
playing the role of a bona fide private attorney general. [Citation.]’
(Fn. omitted.)" (Id. at p. 16.)4 The
same principle applies here. It is true that in both Hall, supra,
150 Cal.App.3d 411 and America Online,
supra, 90 Cal.App.4th 1, there were express antiwaiver
provisions in the statutes in question. But it appears that the protections of a statute such as the UCL generally may not be waived
by contract because the public interest is
involved. (Civ. Code, § 1668; see also Tunkl
v. Regents of University of California
(1963) 60 Cal.2d 92, 94-98; Henrioulle
v. Marin Ventures, Inc. (1978) 20 Cal.3d
512, 517.)
Moreover, the court in Hall, supra,
150 Cal.App.3d at page 418, said that even in the
absence of an antiwaiver provision, the trial court may have discretion to
enforce or not enforce the forum selection
clause and that "California’s policy to protect securities investors,
without more, would probably justify denial of enforcement of the choice of forum provision . . . ." Under that rationale,
in the instant case, the trial court’s discretion not
to enforce the forum selection clause should be upheld.5
That another regulatory statute may have a
specific provision preventing enforcement of
a forum selection clause (see, e.g., the California Franchise Relations Act, § 20040.5; Jones v. GNC Franchising, Inc. (9th
Cir. 2000) 211 F.3d 495; but see Bradley v. Harris Research (9th
Cir. 2001) 275 F.3d 884 [§ 20040.5 preempted by the Federal Arbitration
Act as to arbitrations]) does not suggest that absent such a provision, a court is precluded from enforcing a forum selection clause
when such enforcement would contravene public
policy reflected in a statute. It is established that forum selection clauses
that violate public policy are not enforced, and statutes are a principal
reflection of public policy.
The majority acknowledge that persons cannot
bring representative actions under the New
Jersey statute that is comparable to the UCL, but point to the fact that under
that New Jersey statute, actions may be
brought in New Jersey by public prosecutors on behalf
of the customers and other members of the public. (Maj. Opn. ante, at p.
7.) In California, however, any person can
act as a "private attorney general" in bringing a UCL action.
(See Mortera v. North America Mortgage Co. (N.D. Cal. 2001) 172 F.Supp.2d 1240, 1242-1243.) As the Supreme Court said in Stop
Youth Addiction, Inc. v. Lucky Stores,
Inc. (1998) 17 Cal.4th 553 at page 561,
in pointing out that both public prosecutors
and persons may enforce the UCL, "That the Legislature in section 17204 used the disjunctive when listing the entities
empowered to bring UCL ‘[a]ctions for . . . relief’
plainly suggests it means to designate such entities in the alternative."6
The continued existence of one avenue of
relief does not make acceptable the extinction of others
provided by the UCL statutory scheme. The
forum selection clause is not applicable here. Net2Phone’s
standard form agreement with its customers includes the following provision:
"GOVERNING LAW; JURISDICTION These Terms of Use shall be governed
and construed in accordance with the laws of the State of New Jersey. You agree that in any legal action or proceeding between
you and Net2Phone for any purpose concerning
this Agreement, you agree to submit to exclusive jurisdiction [sic] the
state and federal courts of New Jersey and
you expressly waive all defenses to jurisdiction. Any
cause of action or claim you may have with respect to the Site, Services or
Materials must be commenced within one (1)
year after the claim or cause of action arises or such claim
or cause of action is barred. Net2Phone’s failure to insist upon or enforce
strict performance of any provision of these
Terms of Use shall not be construed as a waiver of any
provision or right. Neither the course of conduct between the parties nor trade practice shall act to modify any provision of these
Terms of Use. Net2Phone may assign its rights
and duties under these Terms of Use to any party at any time without notice to you."
Plaintiff’s consumer complaint contains
allegations of false advertising and violations
of section 17200. Consumer Cause contends that Net2Phone’s failure to disclose
in its advertising and promotional materials its practice of "rounding
up" the time elapsed for internet
telephone calls to the nearest minute renders its promotional materials
and advertising "false, misleading and fraudulent in violation of Title 15
U.S.C. section 45(a)(1) (unfair methods of
competition and unfair or deceptive acts or practices affecting
commerce) therefore of Business and Professions Code section 17200." Consumer Cause also alleges that Net2Phone’s
practice of charging consumers for "ringing
time"—the time elapsing once a call is placed and prior to connection
with the recipient of the call—without
disclosing the billing system in its promotional materials, usage
instructions, or website constitutes false advertising and an unfair business practice. Finally, Consumer Cause alleges that
Net2Phone’s practice of refusing to connect
calls made on its prepaid calling cards when the balance on the cards is less
than $1—also undisclosed in Net2Phone’s
promotional materials—constitutes an unfair business
practice and false advertising.
The claims are brought by Consumer Cause, which
has no contractual relationship with
Net2Phone. Consumer Cause alleged it filed the action on behalf of California residents "billed by Net2Phone for such
services during the four years preceding the filing
of the action." Whether all of such residents had contracts with forum
selection clauses is not clear.7
Consumer Cause did not need to represent only Net2Phone customers
in order to bring an action under the UCL. The action may be brought "by
any person acting for the interests of . . .
the general public." (§ 17204.) As the plaintiff seeks
to enjoin certain alleged unfair and deceptive practices, including advertising
and non-disclosure activities,8
plaintiff is, in effect, acting on behalf of the general public, rather
than only for any group of Net2Phone customers.9
The forum selection clause is not applicable here
because Consumer Cause is not a party to any
contract containing a forum selection clause and neither are members of the California public who would be the purported
beneficiaries of the action. Generally, a nonsignatory
to an agreement is not bound by a forum selection clause in the agreement.
(Berclain America Latina v. Baan Co. (1999)
74 Cal.App.4th 401, 405.) The exception to
this rule is when the party sought to be bound by the forum selection clause is
closely related to a signatory to the
agreement. In Lu v. Dryclean-U.S.A. of
California, Inc. (1992) 11 Cal.App.4th
1490, the court held that a forum selection clause could be enforced
against codefendants who had not signed the agreements containing the forum selection clause but who were alleged to have
participated in the alleged franchise law violations
and to be the "alter ego" of the party that did sign the agreement.
Because of this close relationship, to not
enforce the forum selection clause under the circumstances "would
be to permit a plaintiff to sidestep a valid forum selection clause simply by naming a closely related party who did not sign the
clause as a defendant." (Id. at p. 1494.)
No such sidestepping is taking place here to
justify departing from the general rule that
parties are not bound by the provisions of contracts to which they are not
parties. Although Consumer Cause purports to
act on behalf of consumers, many of whom are parties
to contracts containing the forum selection clause, it is not a party to such contracts. Moreover, Consumer Cause raises
noncontractual claims, and it acts on behalf of
the general public.
New Jersey is not a suitable alternative forum.
The California Supreme Court has stated that an
action may not be dismissed for an
alternative forum "unless a suitable alternative forum is available to the
plaintiff [citations]." (Stangvik v.
Shiley, Inc. (1991) 54 Cal.3d 744, 752.) New Jersey is not a suitable
alternative forum for this action, an unfair business practices lawsuit brought
by Consumer Cause on behalf of California
consumers. As conceded by the majority, this lawsuit
could not be brought in New Jersey, for New Jersey’s Consumer Fraud Act, N.J.S.A. 56:8-1 to 20, does not confer upon private
parties who are not personally injured the
ability to bring a representative action on behalf of others. As discussed above,
this ability is an important component of the
rights of the members of the public in California. Because
Common Cause cannot bring this suit as a private attorney general in New Jersey,
the trial court correctly ruled that New Jersey is not a suitable alternative
forum and declined to enforce the forum
selection clause.
CONCLUSION
For each of the reasons I have given, I would
have affirmed the ruling of the trial court
denying the motion to dismiss.
MOSK, J.
1 All
further statutory references are to the Business and Professions Code unless otherwise indicated.
2 Code
of Civil Procedure section 410.30, subdivision (a), provides: "When a court
upon motion of a party or its own motion
finds that in the interest of substantial justice an action
should be heard in a forum outside this state, the court shall stay or dismiss
the action in whole or in part on any
conditions that may be just."
3 Undesignated
statutory references shall be to the Business and Professions Code.
4 The
court also noted that the plaintiff’s "complaint also includes a cause of
action under California’s unfair
competition law (Bus. & Prof. Code, § 17200 et seq.) which shares some remedial similarities with CLRA, including a private
right to sue as a class action [citation], recovery
of restitution and injunctive relief [citations], plus enhanced remedies for
senior or disabled persons (Bus. & Prof.
Code, § 17206.1)." (America Online, supra, 90 Cal.App.4th at p. 15, fn. 10.)
5 In
Furda v. Superior Court (1984) 161 Cal.App.3d 418, 427, fn. 5, the court
suggested that policies underlying statutes
such as the UCL did not preclude enforcement of choice-of-forum clauses
when the chosen state had a forum with "a strong interest in this
transaction" andthe parties had a "substantial number of contacts"
with that forum. That case involved breach of contract
and fraud claims and was not brought under the UCL.
6 Payne
v. National Collections Systems, Inc. (2001) 91 Cal.App.4th 1037, 1045-1047
does not suggest what the majority call a
"fundamentally different nature of an action brought by a prosecutor
and privately pursued representative actions" (maj. opn. ante, at p.
4) because that case distinguished actions
brought by a prosecutor and private class actions.
7 Net2Phone
stated that the provision has been in its contracts since before January, 1998, but customers billed during the last four years may
have had contracts from an earlier period.
8 A
violation of the false advertising law (Bus. & Prof. Code, § 17500)
constitutes a violation of the UCL. (Freeman
v. Time, Inc. (9th Cir. 1995) 68 F.3d 285, 288-289.)
9 The
forum selection clause contains a one-year limitations period, while the UCL provides for a four-year statute of limitations (§
17208.) (See Moreno v. Sanchez (2003) 106 Cal.App.4th
1415, 1430 [contractual limits on statutes of limitations must be reasonable and generally involve "straightforward commercial
contracts plus the unambiguous breaches or accrual
of rights under those contracts"].)
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