RUDDER v. MICROSOFT CORPORATION
ONTARIO SUPERIOR COURT OF JUSTICE
October 4, 1999
This is a motion by the defendant Microsoft for a permanent stay of this intended class
proceeding. The motion is based on two alternative grounds, first that the parties have agreed to
the exclusive jurisdiction, and venue, of the courts in King County in the State of Washington in
respect of any litigation between them, and secondly, that in any event, Ontario is not the
appropriate forum for the conduct of this proceeding and that the service ex juris of the
Statement of Claim ought to be set aside.
The Microsoft Network ("MSN"), is an online service, providing, inter alia, information and
services including Internet access to its members. The service is provided to members, around
the world, from a "gateway" located in the State of Washington through computer connections
most often made over standard telephone lines.
The proposed representative plaintiffs in this action were subscriber members of MSN. Both are
law school graduates, one of whom is admitted to the Bar in Ontario while the other worked as a
legal researcher. They were associated with the law firm which originally represented the
intended class. The plaintiffs claim under the Class Proceedings Act, 1992, S.O., C.6 on behalf
of a Canada-wide class defined as:
All persons resident in Canada who subscribed for the provision of Internet access
or information or services from or through MSN, The Microsoft Network, since
September 1, 1995.
This class is estimated to contain some 89,000 MSN members across Canada.
The plaintiffs claim damages for breach of contract, breach of fiduciary duty, misappropriation
and punitive damages in the total amount of $75,000,000.00 together with an accounting and
injunctive relief. The plaintiffs allege that Microsoft has charged members of MSN and taken
payment from their credit cards in breach of contract and that Microsoft has failed to provide
reasonable or accurate information concerning accounts. The Statement of Claim was served on
Microsoft at its offices in Redmond, Washington on January 5,1998.
The contract which the plaintiffs allege to have been breached is identified by MSN as a
"Member Agreement". Potential members of MSN are required to electronically execute this
agreement prior to receiving the services provided by the company. Each Member Agreement
contains the following provision:
15.1 This Agreement is governed by the laws of the State of Washington, U.S.A.,
and you consent to the exclusive jurisdiction and venue of courts in King County,
Washington, in all disputes arising out of or relating to your use of MSN or your
The defendant relies on this clause in support of its assertion that the intended class proceeding
should be permanently stayed.