Last month, a federal district court in the State of New Jersey granted a motion to transfer venue filed by Raymour & Flanigan (“Raymour”), pursuant to a forum-selection clause contained in its Sweepstakes Official Rules (“Sweepstakes Agreement”). Evelyn Manopla, the Plaintiff named in the sweepstakes law class action against Raymour, argued that the Sweepstakes Agreement was unenforceable because the hyperlink to the Sweepstakes Agreement was not conspicuous and, therefore, its constituent forum selection clause was invalid. The court found that the forum selection clause was valid and transferred the case to the Northern District of New York.

When have sweepstakes contest rules been agreed to?

Sweepstakes Lawsuit

In September 2017, New Jersey resident Evelyn Manopla sued Raymour in the U.S. District Court for the District of New Jersey (Case No. 17-cv-07649) for alleged violations of the Telephone Consumer Protection Act (“TCPA”). Ms. Manopla’s putative sweepstakes law class action complaint claims that Raymour delivered thousands of unsolicited promotional text messages to consumers’ mobile phones without consent and/or after consumers revoked their consent in a reasonable manner.

Raymour claims that Ms. Manopla entered one of its sweepstakes promotions and, at that time, agreed to: (1) receive automated, promotional text messages to her cell phone; and (2) be bound by the Sweepstakes Agreement. Ms. Manopla argued that there was no indication that she was agreeing to a forum selection clause in the Sweepstakes Agreement.

Validity of Clickwrap Agreements

A clickwrap agreement is a message (a dialog box or pop-up window) presented on the user’s computer screen that requires the user to manifest his or her affirmative assent to the terms of the agreement by clicking on an icon. Generally, courts have enforced forum selection clauses in clickwrap agreements because clickwrap agreements typically provide “reasonable notice” of their constituent terms. Courts have found clickwrap agreements to be unenforceable where the terms are so unnoticeable that they effectively conceal from the consumer that a specific clause lies within. The Court found that the two marked hyperlinks leading to the Sweepstakes Agreement was adequate notice and, therefore, that Ms. Manopla should be bound by the forum selection clause at issue in her sweepstakes law action.

Sweepstakes Law Liability

Promotional contests and sweepstakes have the potential to create buzz for the sponsor, but also substantial legal liability. Many sweepstakes-related legal risks can be minimized or eliminated by working with experienced sweepstakes law and marketing counsel before sponsoring a promotion. In the case at hand, Raymour was able to enforce its forum-selection clause because of a well-constructed clickwrap agreement. Litigating the lawsuit in New York instead of New Jersey will save Raymour time and money moving forward.