Anderson v. Amazon.com, Inc.

• Decision Date: 10 August 2020
• Docket Number: No. 3:19-cv-01151,3:19-cv-01151
• Citation: 478 F.Supp.3d 683
• Court: U.S. District Court — Middle District of Tennessee
• Parties: Keith ANDERSON, Matthew Cooper, and Sabrina Warner, on behalf of themselves and all others similarly situated, Plaintiffs, v. AMAZON.COM, INC., Walmart, Inc., Wal-Mart.com USA, LLC, and eBay, Inc., et al., Defendants.

478 F.Supp.3d 683

Keith ANDERSON, Matthew Cooper, and Sabrina Warner, on behalf of themselves and all others similarly situated, Plaintiffs,

v.AMAZON.COM, INC., Walmart, Inc., Wal-Mart.com USA, LLC, and eBay, Inc., et al., Defendants.

No. 3:19-cv-01151

United States District Court, M.D. Tennessee, Nashville Division.

Filed August 10, 2020

Dan C. Stanley, Stanley & Kurtz, PLLC, Richard Everett Collins, II, R.E. Collins Firm, Knoxville, TN, for Plaintiffs.

Lela M. Hollabaugh, Bradley Arant Boult Cummings LLP, Nashville, TN, Scott B. Smith, Bradley Arant Boult Cummings LLP, Huntsville, AL, for Defendant Amazon.com, Inc.

Austin K. Purvis, Samuel Lanier Felker, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Nashville, TN, for Defendants Walmart Inc., Wal-Mart.com USA, LLC.

Lauren Paxton Roberts, Stites & Harbison, PLLC, Nashville, TN, for Defendant eBay, Inc.

MEMORANDUM OPINION

ELI RICHARDSON, UNITED STATES DISTRICT JUDGE

Pending before the Court is Defendant eBay Inc. ("eBay")’s Motion to Compel Arbitration as to Plaintiff Matthew Cooper ("Plaintiff Cooper") and Stay Proceedings (Doc. No. 17, "Motion"), supported by an accompanying Memorandum of Law (Doc. No. 18). Plaintiff Cooper filed a response (Doc. No. 27), and Defendant replied (Doc. No. 37). For the reasons stated herein, Defendant eBay's Motion will be GRANTED .

BACKGROUND¹

On December 12, 2019, Plaintiff Cooper purchased a seatbelt extender online from Defendant eBay. (Doc. No. 18-1 at ¶ 12). After selecting the "Buy Now" option, and then selecting the option to "Check out as a guest," eBay's website provided Plaintiff Cooper with a screen containing the following language: "By placing your order, you authorize PayPal to process your payment, and you agree to PayPal's user agreement and privacy statement and eBay's User Agreement and Privacy Notice." (Doc. No. 27-1 at 8). Underneath this language is a link titled "Confirm and Pay" that must be clicked on in order to complete the purchase. (Id. ; Doc. No. 18-1 at ¶ 5). As revealed in the below image below, a purchaser must click on the "User Agreement" hyperlink to view the terms of eBay's User Agreement. (Doc. No. 27-1 at 8).

(Id. ).

The User Agreement's Agreement to Arbitrate ("Arbitration Agreement") provides in part:

You and eBay each agree that any and all disputes or claims that have arisen, or may arise, between you and eBay (including any disputes or claims between you and a third-party agent of eBay) that relate in any way to or arise out of this or previous versions of the User Agreement, your use of or access to the Services, the actions of eBay or its agents, or any products or services sold, offered, or purchased through the Services shall be resolved exclusively through final and binding arbitration, rather than in court. Alternatively, you may assert your claims in small claims court, if your claims qualify and so long as the matter remains in such court and advances only on an individual (non-class, non-representative) basis. The Federal Arbitration Act governs the interpretation and enforcement of this Agreement to Arbitrate.

(Doc. No. 18-1 at ¶ 12). The Arbitration Agreement also includes an opt-out procedure, which allows eBay account holders to opt out of the Arbitration Agreement by following the given procedure:

IF YOU ARE A NEW USER OF OUR SERVICES, YOU CAN CHOOSE TO REJECT THIS AGREEMENT TO ARBITRATE ("OPT-OUT") BY MAILING US A WRITTEN OPT-OUT NOTICE ("OPT-OUT NOTICE"). THE OPT-OUT NOTICE MUST BE POSTMARKED NO LATER THAN 30

DAYS AFTER THE DATE YOU ACCEPT THE USER AGREEMENT FOR THE FIRST TIME. YOU MUST MAIL THE OPT-OUT NOTICE TO EBAY INC., ATTN: LITIGATION DEPARTMENT, RE: OPT-OUT NOTICE, 583 WEST EBAY WAY, DRAPER, UT 84020.

For your convenience, we are providing an Opt-Out Notice form. You must complete and mail that to us in order to opt out of the Agreement to Arbitrate. You must complete the Opt-Out Notice form by providing the information called for in the form, including your name, address (including street address, city, state and zip code), and the user ID(s) and email address(es) associated with the eBay Service account(s) to which the opt-out applies. You must sign the Opt-Out Notice for it to be effective. This procedure is the only way you can opt out of the Agreement to Arbitrate. If you opt out of the Agreement to Arbitrate, all other parts of this User Agreement and its Legal Disputes Section will continue to apply to you. Opting out of this Agreement to Arbitrate has no effect on any previous, other, or future arbitration agreements that you may have with us.

(Id. ). Furthermore, the User Agreement prohibits class action and other non-individualized relief:

YOU AND EBAY AGREE THAT EACH OF US MAY BRING CLAIMS AGAINST THE OTHER ONLY ON AN INDIVIDUAL BASIS AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, OR REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL ACTION OR PROCEEDING. UNLESS BOTH YOU AND EBAY AGREE OTHERWISE, THE ARBITRATOR MAY NOT CONSOLIDATE OR JOIN MORE THAN ONE PERSON'S OR PARTY'S CLAIMS, AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A CONSOLIDATED, REPRESENTATIVE, CLASS, OR PRIVATE ATTORNEY GENERAL ACTION OR PROCEEDING. ALSO, THE ARBITRATOR MAY AWARD RELIEF (INCLUDING MONETARY, INJUNCTIVE, AND DECLARATORY RELIEF) ONLY IN FAVOR OF THE INDIVIDUAL PARTY SEEKING RELIEF AND ONLY TO THE EXTENT NECESSARY TO PROVIDE RELIEF NECESSITATED BY THAT PARTY'S INDIVIDUAL CLAIM(S). ANY RELIEF AWARDED CANNOT AFFECT OTHER USERS.

(Id. , "Class Action Waiver").

On December 21, 2019, Plaintiff Cooper, together with Plaintiffs Keith Anderson and Sabrina Warner (collectively "Plaintiffs"), filed the Complaint in this case on behalf of themselves and all others similarly situated, alleging fraud and negligent misrepresentation regarding the sale of seatbelt extenders. (Doc. No. 1 at ¶ 1). In their Complaint, Plaintiffs allege that Defendants Amazon.com, Inc., Walmart, Inc., Wal-Mart.com USA, LLC, and eBay, Inc. (collectively "Defendants") fraudulently misled consumers regarding the proper usage and safety ratings of seatbelt extenders. (Id. at ¶¶ 12-36). Specifically, Plaintiffs allege that eBay advertised a seatbelt extender as safe for use with children's car seats despite numerous car manufacturers’ warning against such use, which led Plaintiff Cooper to purchase the item for use with his child's convertible booster seat. (Id. at ¶¶ 29, 32-33). As indicated, Defendant eBay now moves to compel arbitration of Plaintiff Cooper's (the only plaintiff that asserts claims against eBay) claims against it. Defendant eBay also seeks an order precluding class arbitration, staying Plaintiff Cooper's claims against Defendant eBay pending arbitration, and staying Defendant eBay's current litigation deadlines pending the resolution of this Motion. (Doc. No. 17 at 1).

LEGAL STANDARD

The Federal Arbitration Act ("FAA") provides that a written provision in a contract "to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. This section of the FAA "embodies the national policy favoring arbitration and places arbitration agreements on equal footing with all other contracts." Seawright v. Am. Gen. Fin. Servs., Inc. , 507 F.3d 967, 972 (6th Cir. 2007) (internal citation and quotation omitted).

Under the FAA, if a party establishes the existence of a valid agreement to arbitrate, the district court must grant the party's motion to compel arbitration and stay or dismiss proceedings until the completion of arbitration. Glazer v. Lehman Bros., Inc. , 394 F.3d 444, 451 (6th Cir. 2005) (citing 9 U.S.C. §§ 3 - 4 ). Furthermore, "courts are to examine the language of the contract in light of the strong federal policy in favor of arbitration." Stout v. J.D. Byrider , 228 F.3d 709, 714 (6th Cir. 2000) (citation omitted). Therefore, any doubts regarding arbitrability must be resolved in favor of arbitration. Fazio v. Lehman Bros., Inc. , 340 F.3d 386, 392 (6th Cir. 2003). However, while the courts must respect "the liberal federal policy favoring arbitration agreements ... arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit." Seawright , 507 F.3d at 972 (internal citation and quotation omitted). Because arbitration agreements are fundamentally contracts, the enforceability of a purported agreement to arbitrate is evaluated according to applicable state contract law. Id.

When considering a motion to dismiss and compel arbitration under the FAA, a court has four tasks:

[F]irst, it must determine whether the parties agreed to arbitrate; second, it must determine the scope of that agreement; third, if federal statutory claims are asserted, it must consider whether Congress intended those claims to be nonarbitrable; and fourth, if the court concludes that some, but not all, of the claims in the action are subject to arbitration, it must determine whether to stay the remainder of the proceedings pending arbitration.

Stout , 228 F.3d at 714 (citing Compuserve, Inc. v. Vigny Int'l Finance, Ltd. , 760 F. Supp. 1273, 1278 (S.D. Ohio 1990) ). The parties dispute whether they mutually agreed to arbitrate; thus, the first step (and really only the first step) is at issue here.

As noted above in a footnote, "in evaluating motions to compel arbitration, ‘courts treat the facts as they would in ruling on a summary judgment.’ " Yaroma , 130 F. Supp. 3d at 1062 (quoting Kovac , 930 F. Supp. 2d at 864 ). "Therefore, the party opposing arbitration bears the burden of ‘showing a genuine issue of material fact as to the validity of the agreement to arbitrate.’ " Id. (citing Great Earth Cos. v. Simons , 288 F.3d 878, 889 (6th Cir. 2002) ). Thus, the court views "all facts and inferences drawn therefrom in the light most favorable" to the party opposing arbitration and "determi...