Michigan Court Unwilling to Apply Website Terms of Use If Terms Were Not Presented In Unavoidable Way To Purchasers

Published On September 24, 2010 | By ZwillGen | General, Litigation

In Caldwell v. Cheapcaribbean.com, No. 2:09-cv-13828, 2010 WL 3603778 (E.D. Mich. Sept. 8, 2010), the District Court for the Eastern District of Michigan denied Defendant Cheapcaribbean.com, Inc.’s (“CheapCaribbean”) motions to dismiss, finding that the internet travel site was subject to limited personal jurisdiction in Michigan and that the forum selection clause included in the website’s terms of use was not binding upon the plaintiff. 

 Caldwell v. Cheapcaribbean is a wrongful death suit arising from a car accident involving Elizabeth Caldwell and her husband Robert Caldwell during their honeymoon trip to Mexico.  Ms. Caldwell purchased their honeymoon package including the transportation between the airport and hotel from CheapCaribbean by calling their 1-800 number after reviewing the vacation packages online.  The CheapCaribbean website included a link at the bottom of each page to its terms of use which contained a specific forum selection clause.  Additionally, the travel voucher emailed to Ms. Caldwell after her purchase stated “[a]ll CheapCaribbean.com reservations are non-refundable, non-cancellable, and non-changeable as per our terms and conditions which can be viewed at: www.CheapCaribbean.com/terms.jsp.”

 First, CheapCaribbean moved to dismiss the complaint for lack of personal jurisdiction, stating that it had not regularly conducted business in Michigan, was not incorporated there, had no offices, real or personal property, and no employees, representatives, agents, offices, shareholders or independent contractors located in Michigan.  The Court agreed that it did not have general jurisdiction over CheapCaribbean, but found that it had limited personal jurisdiction because CheapCaribbean had a commercial website with a high level of interactivity that reached Michigan residents and made approximately 1% of its bookings with Michigan residents.  Thus, the Court found that “while this only constitutes a small portion of CheapCaribbean’s overall business, these repeated commercial contacts with Michigan residents over a number of years constituted a conscious choice by CheapCaribbean to conduct business with the residents of the state of Michigan.”

 Additionally, the Court denied Defendant’s motion to dismiss based on the forum selection clause included in the www.CheapCaribbean.com terms of use.   The Court found persuasive the argument that the terms of use were not binding on plaintiff because she made her reservations over the telephone and because she was never notified that the defendants expected to apply the website terms of use to the telephone transaction until she received the travel voucher in the mail.  In its analysis, the Court pointed out that the terms of use were browsewrap terms, that there was no evidence that Ms. Caldwell had ever clicked on the terms and that the link to the 1-800 number was prominently featured at the top of the page, while the link to the terms of use was in small font at the bottom of the page.

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