Ninth Circuit Blesses Amazon’s Terms of Service

September 22, 2017 · by Venkat Balasubramani · in E-Commerce, Licensing/Contracts

Plaintiff appealed from a district court order granting Amazon’s motion to compel arbitration based on an arbitration clause in its “Conditions of Use.” My blog post on the trial court ruling: “Court Enforces Arbitration Clause in Amazon’s Terms of Service–Fagerstrom v. Amazon“. In a memorandum opinion, the Ninth Circuit affirms because:

Washington law appropriately applies (and the result is the same under California law)
the notices on the account creation and checkout pages were “in sufficient proximity” to give plaintiff a “reasonable opportunity to understand” that he’d be bound by the terms
there is no procedural unconscionability since there’s no obligation to “call out” arbitration
incorporation by reference to the AAA rules is acceptable (despite AAA’s renaming of certain rules)
the terms are also not substantively unconscionable (either due to the unilateral modification clause, the carve-out for intellectual property claims, or the legal fee provision)

This is welcome news for Amazon of course, whose formation process was faulted by the Second Circuit in Nicosia.

Ninth Circuit case law on online contract formation is unpredictable. Contrast the reasoning and result in this case with Tompkins v. 23andMe and Nguyen v. Barnes and Noble.

It’s surprising to see this end up as an unpublished ruling.

Case citation: Wiseley v. Amazon.com, Inc., No. 15-56799 (9th Cir. Sept. 19, 2017)

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Evidentiary Failings Undermine Arbitration Clauses in Online Terms

Court Enforces Arbitration Clause in Amazon’s Terms of Service–Fagerstrom v. Amazon

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Second Circuit Says Arbitration Clause in Terms Emailed After-the-Fact Not Enforceable – Schnabel v. Trilegiant

Users Can’t Sue Sony for Changing Online Terms to Require Arbitration – Fineman v. Sony Network Entertainment

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Zynga Wins Arbitration Ruling on “Special Offer” Class Claims Based on Concepcion — Swift v. Zynga