Breaking Terms of Service News: Musk Chooses Northern District of Texas as His Venue

According to Jon Brodkin, writing for Ars Technica, new terms of service for Twitter (a/k/a X) will take effect on November 15th. If you want to bring an action relating to the terms of service, you will have to do so in the Northern District of Texas, home to Judge Reed O’Connor (left), who has disclosed that he owns between $15,001 and 50,000 in Tesla stock. Judge O’Connor is currently presiding over a case brought by Twitter (X Corp.) and has refused to recuse himself. While Twitter did recently move its headquarters from San Francisco to Texas, those headquarters are not within the Northern District of Texas. Twitter likes having a jurisdictional mistress on the side while sticking with the wife, forty miles outside of Austin, the San Francisco of Texas.

Here is the relevant language of the revised Terms of Service:

All disputes related to these Terms or the Services, including without limitation disputes related to or arising from other users’ and third parties’ use of the Services and any Content made available by other users and third parties on the Services, will be brought exclusively in the U.S. District Court for the Northern District of Texas or state courts located in Tarrant County, Texas, United States, and you consent to personal jurisdiction in those forums and waive any objection as to inconvenient forum. Without prejudice to the foregoing, you agree that, in its sole discretion, X may bring any claim, cause of action, or dispute we have against you in any competent court in the country in which you reside that has jurisdiction and venue over the claim. To the extent permitted by law, you also waive the right to participate as a plaintiff or class member in any purported class action, collective action or representative action proceeding. 

The Ars Technica report duly notes that courts will likely enforce the choice of forum, especially if users of Twitter are given notice of the new terms and have to click something to make that notice disappear from their screens. That will surely happen.

But I do wonder if there might not be an unconscionability problem. The choice-of-forum clause is decidedly one-sided. Users can only sue Twitter in the Northern District or in state courts in Tarrant County, Texas, but Twitter can sue users anywhere in the world. Blog Founder Frank Snyder points out that the one-sidedness makes sense here. Twitter may not be able to sue in Texas because the Texas courts might not have in personam jurisdictions of the defendants.

There is also a class-action waiver “to the extent permitted by law.” We know that SCOTUS has upheld such class-action waivers in the context of arbitration clauses, even if there is contrary state law. But that is a product of the Federal Arbitration Act and the Supremacy Clause, which give priority to federal statutory law over state law to the extent of any contradiction. 

It may be that Texas law throws up no impediments to class-action waivers, in which case this will not be an issue. Moreover, Twitter has wisely limited its class action waiver “to the extent permitted by law.” Presumably, a court troubled by the waiver would simply sever it but enforce the rest of the choice of forum provision.