Nicosia v. Amazon.com, Inc.

• Citation: 384 F.Supp.3d 254
• Decision Date: 14 June 2019
• Docket Number: 14-CV-4513 (ILG) (LB)
• Parties: Dean NICOSIA, on behalf of himself and all others similarly situated, Plaintiff, v. AMAZON.COM, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

384 F.Supp.3d 254

Dean NICOSIA, on behalf of himself and all others similarly situated, Plaintiff,

v.AMAZON.COM, INC., Defendant.

14-CV-4513 (ILG) (LB)

United States District Court, E.D. New York.

Signed June 14, 2019

Gregory S. Duncan, Pro Hac Vice, Office of Gregory S. Duncan, Charlottesville, VA, Joseph S. Tusa, Tusa, P.C., Southhold, NY, Peter D. St. Phillip, Jr., Scott Vincent Papp, Lowey Dannenbery P.C., White Plains, NY, Paula M. Roach, Pro Hac Vice, Timothy G. Blood, Pro Hac Vice, Blood Hurst & O'Reardon LLP, San Diego, CA, for Plaintiff.

David Abraham Snider, Kevin T. Rover, Regina Schaffer-Goldman, Morgan Lewis & Bockius LLP, New York, NY, Ezra D. Church, Gregory T. Parks, Pro Hac Vice, Jacqueline Gorbey, Pro Hac Vice, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Defendant.

MEMORANDUM AND ORDER

GLASSER, Senior United States District Judge:

On January 30, 2013 and April 19, 2013, Plaintiff Dean Nicosia went on Amazon.com and placed orders of 1 Day Diet, a product marketed as a weight-loss supplement, which contained the harmful compound sibutramine. The account from which these purchases were made was held in his wife's name and was previously enrolled in a program called "Amazon Mom." As described below, to enroll in Amazon Mom, a user must accept the "Amazon Prime Terms and Conditions," which incorporate an arbitration provision. Plaintiff subsequently brought a putative class action against Defendant Amazon.com, Inc. ("Amazon" ), asserting that Amazon's sales of 1 Day Diet violated the Consumer Product Safety Act, 15 U.S.C. § 2051, et seq. , and state law. After Amazon moved to compel arbitration, the matter was referred to the Hon. Lois Bloom for a Report and Recommendation ("R&R" ), which advised that the motion be granted.

The Court adopts the R&R's conclusion that arbitration be granted, finding that it is supported by its careful analysis of the facts and the law which is manifest, and not impugned by Plaintiff's objections to it, which are denied. The Court is driven to this conclusion upon its de novo review of the evidentiary record, parties' motion and objection papers, and applicable legal authority, as mandated by 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b)(3), for the reasons expanded upon below.

STANDARD OF REVIEW

In deciding a motion to compel arbitration, "courts apply a ‘standard similar to that applicable for a motion for summary judgment.’ " Nicosia v. Amazon.com, Inc. , 834 F.3d 220, 229 (2d Cir. 2016) (quoting Bensadoun v. Jobe-Riat , 316 F.3d 171, 175 (2d Cir. 2003) ). Accordingly, the Court will "consider all relevant, admissible evidence submitted by the parties and contained in the pleadings, depositions, answers to interrogatories, and admissions on file, together with ... affidavits." Id. (quoting Chambers v. Time Warner, Inc. , 282 F.3d 147, 155 (2d Cir. 2002) ). "In so doing, the court must draw all reasonable inferences in favor of the nonmoving party." Id. (citing Wachovia Bank, Nat. Ass'n v. VCG Special Opportunities Master Fund, Ltd. , 661 F.3d 164, 171-172 (2d Cir. 2011), cert. denied , 566 U.S. 1010, 132 S.Ct. 2439, 182 L.Ed.2d 1063 (2012) ). "If there is an issue of fact as to the making of the agreement for arbitration, then a trial is necessary." Nicosia , 834 F.3d at 229 (quoting Bensadoun , 316 F.3d at 175 ); see also 9 U.S.C. § 4. "But where the undisputed facts in the record require the matter of arbitrability to be decided against one side or the other as a matter of law, [the Court] may rule on the basis of that legal issue and ‘avoid the need for further court proceedings.’ " Nicosia , 834 F.3d at 229 (alterations omitted) (quoting Wachovia Bank , 661 F.3d at 172 ).

BACKGROUND

I. Factual Background

1. The Nicosias' Amazon.com Account

Plaintiff Dean Nicosia ("Plaintiff" ) resides with his wife, Annemarie Nicosia ("Annemarie" ), and his family in North Carolina. (D. Nicosia Dep. at 47:12-48:7, ECF No. 118-2). Before March 2012, he and his family lived in New York. (Id. at 46:25-47:24, 55:7-25).

"Amazon.com" is an online retail website and marketplace through which consumers may purchase hundreds of millions of products. (Ressmeyer Decl. ¶ 3, ECF No. 116). In order to make a purchase on Amazon.com, a customer must create an Amazon account or use an existing account. (Id. ¶ 5). It is not possible to check out as a "guest" on Amazon.com. (Id. ).

On June 9, 2008, an Amazon account was created in the name of "Annemarie Nicosia" (the "Account" ). (Id. ¶ 25). At all relevant times, the Account was used by both Plaintiff and Annemarie, although Plaintiff relied on Annemarie to manage it. (D. Nicosia Dep. at 138:9-139:9, 143:18-146:2; A. Nicosia Dep. at 45:3-11; 62:22-63:3, ECF No. 118-3; Def. 56.1 ¶ 57, ECF No. 115).¹

2. The Amazon Conditions of Use

It is undisputed that, at the time the Account was created, Amazon's Conditions of Use ("Conditions of Use" or "COU" ) did not contain an arbitration provision. (Ressmeyer Decl. ¶ 15). On August 19, 2011, the following arbitration clause was added to the COU:

Any dispute or claim relating in any way to your visit to Amazon.com or to products or services sold or distributed by Amazon or through Amazon.com will be resolved by binding arbitration, rather than in court , except that you may assert claims in small claims court if you qualify.

(Id. ; Ressmeyer Decl. Ex. M, at AMZ000365, ECF No. 116-15) (bold in original). The arbitration provision was also accompanied by a class action waiver, which provides that "any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated or representative action ." (Ressmeyer Decl. Ex. M, at AMZ000365) (bold in original). Finally, the COU contains a choice-of-law clause specifying that "the Federal Arbitration Act, applicable federal law, and the laws of the state of Washington ... will govern these Conditions of Use and any dispute of any sort that might arise between you and Amazon." (Id. at AMZ000366).

3. Amazon Prime and Amazon Mom

Amazon Prime ("Amazon Prime" or "Prime" ) is a bundle of services, including free two-day shipping, discounted one-day shipping, and access to movies and television shows, offered to Amazon accountholders for an annual membership fee. (Ressmeyer Decl. ¶ 8).

Amazon Mom ("Amazon Mom" or "Mom" ) was a free membership program launched by Amazon in September 2011 which offered limited, promotional Prime benefits. (Id. ¶ 13). By signing up for Mom, an accountholder could receive discounts on diapers and baby products, as well as three months of free two-day shipping. (Id. ). By purchasing products on Mom, the accountholder could extend their free two-day shipping benefits to up to one year. (Id. ).

Amazon Mom was explicitly promoted as a kind of free trial for Prime. In the promotional FAQ, the free shipping benefits were expressly referred to as "Amazon Prime benefits." (Ressmeyer Decl. Ex. J, at AMZ000369, ECF No. 116-10). Extending these benefits by making qualifying purchases on Mom gave the accountholder "more free months of Prime." (Id. ). The Amazon Mom sign-up page contained text reading: "After your free period, you'll be charged $79 for a year of Amazon Prime and Amazon Mom benefits ...." (Id. at AMZ000372, ECF No. 116-11). Bolded language near the sign-up button read: "Amazon Prime membership continues until cancelled. If you do not wish to continue for $79/year, select ‘Do not renew’ from Your Account before your annual renewal date ." (Id. ). Annemarie testified that, before this lawsuit was brought, she believed in her mind that Prime and Mom were the same program. (A. Nicosia Dep. at 59:24-60:3, 93:18-20). Amazon's Associate General Counsel for Marketing, too, viewed Mom as an "an addition" to Prime, whose "underlying program is a Prime program." (Ressmeyer Dep. at 204:11-13, ECF No. 118-1).

4. September 30, 2011: The Account enrolls in Amazon Mom

Annemarie testified that, while she was pregnant with her second son, she heard about Amazon Mom from a friend, Albert Dennis ("Dennis" ), who told her that the program offered diapers at a "good price." (A. Nicosia Dep. at 15:20-16:7, 58:8-11, 73:11-13). Annemarie gave Dennis her password (id. at 44:4-11), and Dennis told her that he was signing her up for Mom "to get diapers and formula if [she] needed it" (id. at 39:3-8). On September 30, 2011, Dennis enrolled Annemarie in Mom with her "permission." (Id. at 36:12-37:7):

"Q: And your friend Al Dennis told you, ‘There's this Amazon.com Mom program where you can get a discount on diapers,’ right?

"A: Yes, sir.

"Q: And that sounded pretty good to you?

"A: Yes, sir.

"Q: So your friend Al Dennis signed you up for that?

"A: Yes, sir.

"Q: And that was okay with you?

"A: Yes, sir."

(Id. at 58:8-18).

As of September 30, 2011, in order to sign up for Amazon Mom, a customer would be required to complete a two-step process. (Ressmeyer Decl. ¶ 27; Ressmeyer Decl. Ex. J, at AMZ000371-372). First, the customer would enter certain information about themselves and click a button that says "Continue." (Ressmeyer Decl. Ex. J, at AMZ000371). Directly above the "Continue" button was a line that read: "By clicking the Continue button, you acknowledge that you agree to the Amazon Mom Terms and Conditions." (Id. ) (bold in original). The underlined term was a hyperlink to the Amazon Mom Terms and Conditions ("Mom T&C" ) (Ressmeyer Decl. ¶ 28), which contained the following language:

Welcome to the terms and conditions ("Terms") for Amazon Mom, which govern the Amazon Mom membership. Please note that your use of the Amazon.com website and the Amazon Mom membership are also governed by our Conditions of Use, ... Amazon Prime Terms and Conditions, as well as all other applicable terms, conditions, limitations and requirements on the Amazon.com Web Site.

(Ressmeyer Decl. Ex. K, at AMZ000494, ECF No. 116-13). The Mom T&C further provide: "Once your free shipping benefits have expired, you may continue to receive Amazon Prime...