Amazon Shopper Should Go to Arbitration, Not Sue, Judge Says

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By Alexis Kramer

An Amazon.com Inc. user should have known about the company’s arbitration clause because he repeatedly ordered from the site while locked in a three-year court battle against the e-commerce giant, a magistrate judge told the U.S. District Court for the Eastern District of New York Aug. 18 ( Nicosia v. Amazon.com Inc. , 2017 BL 293003, E.D.N.Y., No. 1:14-cv-04513, report and recommendation 8/18/17 ).

Magistrate Judge Lois Bloom recommended that the court grant Amazon’s bid to compel arbitration and stay the case for six months or until the arbitration is complete.

Bloom declined to analyze whether the type of online agreement Amazon had on its website played a role in whether the plaintiff, Dean Nicosia, knew or should have known its terms. Courts have struggled with analyzing terms-of-use agreements that don’t fit neatly into the category of clickwraps—in which users must affirmatively check a box or click an “I agree” button to assent to terms—or browsewraps, in which the terms are typically available via a hyperlink at the bottom of the screen. Bloom assumed that Amazon’s terms-of-use agreement was a hybrid.

Nicosia brought consumer protection claims against Amazon for allegedly selling weight loss products containing sibutramine, which the Food and Drug Administration withdrew from the market. Amazon moved to dismiss on the grounds that the dispute was subject to mandatory arbitration, as required in its terms of use.

Amazon users aren’t required to click an “I agree” box, but they are required to click a “Place your order” button after being told elsewhere on the page that by placing the order they agreed to the terms. For such an agreement, a user must have had actual or constructive notice of the terms for them to be enforceable, Bloom said in her report and recommendation.

Bloom said that even though reasonable minds may disagree on whether the website design and placement were sufficient, Nicosia had notice of the arbitration clause based on his repeat Amazon.com purchases. By placing those orders, Nicosia agreed that all past, present, and future disputes would be resolved through arbitration, Bloom said.

The district court earlier held that Amazon could enforce its arbitration clause. On appeal, the U.S. Court of Appeals for the Second Circuit found that “reasonable minds could disagree” about whether Amazon’s order page gave Nicosia notice of the terms and returned the case to the lower court. The district court is now weighing Bloom’s recommendation.

An attorney for Nicosia didn’t immediately respond to a request for comment.

The Law Offices of Gregory S. Duncan represented Nicosia. Morgan Lewis & Bockius LLP represented Amazon.

To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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