## Facts

- Ohio residents Rose Wong and Patrick Gibson played online poker on PartyGaming’s website and agreed during registration to the site’s Terms and Conditions of Use.
- The Terms stated that PartyGaming prohibited multiple accounts, represented that it used systems to detect collusion and cheating, and described policies addressing underage and problem gambling.
- The Terms contained a governing-law and forum-selection clause requiring that disputes be governed by Gibraltar law and litigated exclusively in Gibraltar courts.
- The Terms included a conspicuous instruction telling users to read the Terms carefully and print and store them.
- Plaintiffs filed a putative class action in federal court in Ohio (diversity jurisdiction), alleging breach of contract, misrepresentation, and violations of Ohio consumer-protection law based on alleged failures to follow the stated anti-collusion and related policies.
- PartyGaming sought dismissal based on the forum-selection clause; the district court dismissed the case on forum non conveniens grounds, enforcing the Gibraltar forum.
- Plaintiffs appealed, challenging enforceability of the clause and the forum non conveniens dismissal.

## Issues

1. In a diversity action, is the enforceability of a forum-selection clause governed by federal law or state law?
2. Did plaintiffs carry their burden to invalidate the Gibraltar forum-selection clause based on fraud/overreaching, unfairness of the forum, or extreme inconvenience?
3. Did the district court abuse its discretion by dismissing the action on forum non conveniens grounds in light of the forum-selection clause?

## Decision

- The Sixth Circuit affirmed the dismissal.
- Federal law governs enforceability of forum-selection clauses in diversity cases because enforcement is treated as a matter of federal procedure.
- The Gibraltar forum-selection clause was enforceable; plaintiffs did not show the clause itself was procured by fraud, duress, or other unconscionable means.
- Plaintiffs did not establish that Gibraltar courts would ineffectively or unfairly handle the dispute; procedural differences such as lack of class actions or civil juries were insufficient.
- Plaintiffs did not demonstrate that litigating in Gibraltar would be so seriously inconvenient as to be unjust, particularly given their contractual assent.
- The district court did not abuse its discretion in dismissing for forum non conveniens, giving substantial weight to the parties’ contractual forum choice.

## Legal Principles

- Enforceability of a forum-selection clause in a federal diversity case is governed by federal law as a procedural question.
- A forum-selection clause should be enforced absent a strong showing that it should be set aside.
- The party opposing enforcement bears the burden to show: (1) the clause was obtained by fraud, duress, or unconscionable means; (2) the chosen forum would ineffectively or unfairly handle the suit; or (3) the forum is so seriously inconvenient that enforcement would be unjust.
- Fraud allegations aimed at the contract generally do not defeat a forum-selection clause; the showing must be directed to procurement of the clause itself.
- Differences between U.S. litigation procedures and those of a foreign forum, without more, do not render the foreign forum inadequate for enforcement or forum non conveniens purposes.
- When a valid forum-selection clause selects a foreign forum, the plaintiff’s preferred forum receives reduced deference and the contractual choice is given substantial weight in forum non conveniens analysis.

## Conclusion

The Sixth Circuit held that federal law controls enforceability of forum-selection clauses in diversity cases, enforced the clickwrap Gibraltar forum-selection clause, and affirmed dismissal on forum non conveniens because plaintiffs failed to show clause-specific fraud, forum unfairness, or extreme inconvenience.


Wong v. PartyGaming Ltd., 589 F.3d 821 (6th Cir. 2009)