## Facts

- Former AOL subscribers in California filed a putative consumer class action alleging AOL continued to debit monthly service fees after subscribers cancelled.
- Plaintiffs alleged they paid monthly fees by automatic credit-card charges and that charges continued without authorization after cancellation; the named plaintiff alleged continued charges for several months after cancellation notice.
- Plaintiffs asserted statutory and common-law claims, including under the Unfair Competition Law (Bus. & Prof. Code § 17200 et seq.) and the Consumers Legal Remedies Act (Civ. Code § 1750 et seq.), plus conversion and fraud-based theories.
- AOL’s subscriber agreement contained a forum-selection clause requiring litigation in Virginia and a choice-of-law clause selecting Virginia law.
- AOL moved to stay or dismiss the California action as an inconvenient forum based solely on those contractual clauses; the trial court denied the motion.
- AOL sought writ relief to compel enforcement of the clauses and to require litigation in Virginia.

## Issues

1. Whether AOL’s forum-selection and Virginia choice-of-law clauses were enforceable against California consumers bringing putative class claims, including under the CLRA and California’s unfair competition law.
2. Whether enforcing the clauses would violate California public policy by effectively waiving nonwaivable statutory rights and materially reducing available remedies and procedures.

## Decision

- The Court of Appeal denied the petition for writ of mandate and left the action in California.
- The court held the forum-selection and choice-of-law clauses unenforceable as applied to the consumer claims.
- The court reasoned that forcing California consumers to litigate in Virginia under Virginia law would operate as the functional equivalent of waiving CLRA protections that California deems nonwaivable.
- The court also found, independently, that Virginia law’s unavailability of consumer class actions and more limited remedies would substantially diminish California consumers’ rights, contravening California’s strong consumer-protection policies.

## Legal Principles

- Forum-selection clauses are generally enforceable, but a California court may refuse enforcement when it would violate a strong California public policy.
- A contractual provision is invalid in effect when it functions as a waiver of rights the Legislature has made nonwaivable (including rights and remedies under the CLRA).
- A forum-selection clause may be unenforceable where the paired choice-of-law and forum terms would materially curtail procedural mechanisms (such as class treatment) and substantive remedies available under California consumer-protection statutes.
- In evaluating enforcement, courts consider the practical impact of the chosen forum and law on the plaintiff’s ability to vindicate California statutory protections, not merely the contract’s formal wording.

## Conclusion

The court refused to compel California consumers to litigate in Virginia under Virginia law because doing so would effectively waive nonwaivable CLRA protections and significantly reduce class and remedial options central to California’s consumer-protection policy, making the contractual forum-selection and choice-of-law clauses unenforceable for these claims.


America Online, Inc. v. Superior Ct., 90 Cal. App. 4th 1, 108 Cal. Rptr. 2d 699 (Ct. App. 2001)