Vladeck questioned the ethics of X's terms in comments quoted by NPR. “For X to say we want all of our lawsuits to be in a forum that may have no connection to where we are, to where the plaintiffs are located, is in line with the federal system's preference for convenience,” Vladeck said. . “Are we going to allow companies to cast aside that principle of convenience in the name of trying to stack the deck in their favor when they have the power to make you agree to the terms of service?”
Legal precedents help X
Fitzpatrick said legal precedents support the enforceability of X's terms. He pointed Carnival Cruise Lines, Inc. to Shutein which the Supreme Court ruled that a non-negotiated forum selection clause requiring disputes to be heard in Florida was valid.
The 1991 Supreme Court ruling said the clauses are “subject to judicial scrutiny of fundamental fairness.” That means companies can't select certain locations to discourage people from making legitimate claims, and they can't obtain approval for terms through fraud or overreach. Parties bound by such terms must also be given sufficient notice of the forum clause.
Fitzpatrick said that “courts have upheld certain districts” mentioned in forum selection clauses, and that business-to-business “contracts often say you have to sue in New York City.”
Fitzpatrick said users could argue that terms are unconscionable, but he described this as a gamble. “If the forum has no connection with either party and there is no other good faith reason for choosing the forum, there may be an argument that the terms are unconscionable; into the Court Close leave that possibility open,” he said. “Even if you are poor and the dispute is minor, there may be an argument that it is unconscionable to make you travel to Texas to file a lawsuit.” But… I understand that unconscionability is still a very unfavorable doctrine.”
Media Matters' argument that the Northern District of Texas had no jurisdiction was rejected even before X moved its headquarters. Media Matters argued that Texas is an inappropriate forum for the dispute because “X is organized under Nevada law and has its principal place of business in San Francisco, California, where its own terms of service require users of its platform to arbitrate any disputes.”
O'Connor ruled that his court has jurisdiction because Media Matters articles “targeted” Texas-based companies that advertised on X, even though those companies were not parties to the lawsuit.
