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What's a legally binding contract in cyberspace?
Published on Friday, November 07, 2003
Case Update
By ETHAN ZINDLER, STAFF WRITER
That question is at the heart of a simmering legal dispute between a Wellfleet business and a nationally known Internet Service Provider (ISP) that may one day affect thousands of Cape Codders. The case moved one step closer to trial thanks to the decision handed down by a federal appeals court last Friday.
West Waters, owner of Codder's House Furniture Co. in Wellfleet, sued ISP's EarthLink Inc. and OneMain.com in Barnstable Superior Court in September 2001. He and as many as 18,000 other Cape customers suffered when they were unable to connect to the Internet at times, and were forced to change e-mail and Web site addresses or lose them, the lawsuit claims.
Last Friday's ruling means the case will soon enter the discovery phase in which attorneys for both parties gather evidence to support their claims in advance of trial.
"(The decision) could conceivably affect all of the businesses that used EarthLink service on the entire Cape," said attorney Bruce Bierhans, who represents Waters.
Attorneys for EarthLink, which acquired OneMain.com in June 2000, said they would not comment on ongoing litigation.
Waters was traveling and unavailable for comment yesterday.
Friday's decision addressed the fundamental question of what constitutes a contractual obligation online. EarthLink had argued that Waters effectively forfeited his right to sue the company when he entered into legally binding arrangements with OneMain.com and EarthLink. The agreements stated Waters could only pursue arbitration to resolve any disputes that might arise between him and the service provider.
The agreements were publicized on OneMain.com's Web site and later on EarthLink's site, according to Bierhans. But they did not contain the "I Accept" click-on button that typifies most online agreements. It was also only accessible via obscure hyperlinks.
As a result, EarthLink cannot prove that West assented to the terms of the arrangement, the U.S. Court of Appeals for the First Circuit ruled.
In a two-page decision, the judges wrote: " ... we are at a loss to see how he could be found to have agreed to arbitrate any disputes with defendants."
On this particular issue, Waters appears to have a potentially strong case, said Michael Meurer, co-director of the Institute for Business Law and Technology at Boston University Law School.
Manifestation of "assent" In the past, courts have ruled that online legal documents must present the user with a clear opportunity to indicate that they have read and understand the given terms.
"There has to be some manifestation of assent like 'I accept,'" he said.
Bierhans said he ultimately hopes to have the case designated as a class-action lawsuit in which all area EarthLink users who were adversely affected by the company are represented.
Among those ready to join the suit is Bob McCaffrey, co-owner of the Even Tide Motel in South Wellfleet. The motel's site has long allowed users to make reservations. McCaffrey said his establishment lost bookings as a result of EarthLink's actions.
"Anyone trying to get on our Web site, for I don't know how many months it was, were sent to the EarthLink main Web site to sign up for their services," said McCaffrey. The mix-up was due to the company renaming various Web addresses when it took over OneMain.com's subscriber list.
"Links on any (other) Web site were no longer being forwarded to our Web site," he said.
McCaffrey declined to estimate how many bookings or dollars his business lost as a result of EarthLink's actions.
Moved to federal court the case landed in appeals court after EarthLink appealed a ruling by the U.S. District Court in Boston, which effectively gave Waters the green light to proceed with his suit. The case was originally moved from Barnstable Superior Court to the federal court at the request of EarthLink's attorneys.
The U.S. District Court will now decide whether the case will continue to be heard at the federal level or return to Barnstable Superior. Bierhans said he expects a hearing to be held on that matter by January.
Atlanta-based EarthLink Inc. has almost 5 million subscribers, according to its corporate Web site. The company had $1.4 billion in sales last year, according to its most recent filing with the Securities and Exchange Commission.
(Published: November 7, 2003 - Copyright 2003 Cape Cod Times)
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