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On August 15, 2012, a federal court in Arizona dismissed a
putative class action asserting false-advertising claims against
internet domain-name registrar GoDaddy.com. See WineStyles, Inc. v. GoDaddy.com, LLC, No. 2:12-cv-00583-SRB (D. Ariz. Aug. 15,
2012). In doing so, the court enforced a contractual provision
requiring particular claims to be brought within one year, holding
as a matter of law that the provision was neither unreasonable nor
unconscionable.
The plaintiff in the case, a wine retailer, had agreed to
GoDaddy's Uniform Terms of Service in the course of paying for
domain registrations online. One of the provisions in the terms
stated claims "arising out of or related to [GoDaddy's]
Site or the Services found at [its] Site" must be brought
within one year of the accrual of the claim. The plaintiff
subsequently filed a putative nationwide class action against
GoDaddy, alleging that its practice of charging fees for automatic
renewals of certain domain registrations violated state deceptive
trade practices acts, the Electronic Funds Transfer Act, and
various common-law doctrines.
GoDaddy moved to dismiss the lawsuit, arguing that the
plaintiff's claims were barred by the contractual one-year
limitations period because the claims had accrued when the
plaintiff was first charged renewal fees, which was more than one
year before the plaintiff filed suit. The court agreed that the
common-law claims were barred, but held that the statutory claims
were timely because they also were based on other events that had
occurred within the one-year period. (The court ultimately
dismissed those statutory claims for other reasons.)
The plaintiff contended that the contractual one-year
limitations period was unconscionable because GoDaddy's online
terms were a "contract of adhesion" and because it
purported to shorten statutes of limitations. The court rejected
this argument, explaining that even though this was a
"contract of adhesion," the provision reducing the
applicable statute of limitations was enforceable so long as the
contractual limitations period was reasonable in length. In the
court's view, a one-year period satisfied that test.
The court's decision in WineStyles should be of interest to
any business that includes (or is considering including) in its
contracts with customers or other contracting parties a clause
requiring that disputes be brought within a certain time frame.
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issues and developments of interest. The foregoing is not a
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