Ninth Circuit Sends Alexa Surreptitious Recording Case to Arbitration–Tice v. Amazon

Lawsuits over voice-activated assistants (and other smart home devices) are interesting. Plaintiffs have been creative about who asserts the claims to navigate around the issue that often sinks class actions: arbitration. This has resulted in claims brought by neighbors, spouses, and minors. This particular lawsuit is by a spouse (Hayley Tice).

Tice acknowledged that she used Amazon (i.e., to make purchases), but her husband purchased the device. She claimed that while she agreed to Amazon’s general terms of service, “she never agreed to the terms of the Alexa TOU.” She asserted claims under the California Information Privacy Act based on Alexa recording her without her consent. The district court analyzed her claim of surreptitious recording as arising in three possible scenarios:

• when she intentionally used Alexa
• “background recording” when someone else uses the device
• “surreptitious recording . . . without prompting and without permission from anyone in the household”

Citing equitable estoppel principles under California law, the district court held that Tice was bound by the Alexa arbitration agreement, which applied to the first two types of recordings. However, as to the third type of recording, the court says that “neither Plaintiff nor her family ever agreed to unanticipated surreptitious recording of their private conversations.” The district court worried about Amazon moving “criminal acts” into arbitration:

Although enforced through civil remedies, Plaintiff’s surreptitious recording claim is criminal in nature—far outside the bounds of both the Alexa TOU and Amazon COU. Through discovery, Plaintiff will need to show that this surreptitious recording actually occurs, but, taken as true, this claim cannot equitably be compelled into arbitration. A contract that allowed Amazon to compel every possible claim, even criminal acts or those completely unrelated to the contract, into arbitration would be unconscionable as a matter of law . . . .

As such, Plaintiff’s claim that Alexa surreptitiously records her voice without prompting has no basis in any agreement made by her or her husband and cannot be compelled into arbitration. The only question is whether Plaintiff has alleged sufficient facts to plausibly state a claim for relief under California law. Accepting the pleaded facts as true, the Court concludes Plaintiff has plausibly stated a claim. The issue of whether Alexa actually surreptitiously records its users is better determined on summary judgment.

The district court said that the pleadings were sufficient, so Amazon has to face discovery!

The appeals court reverses in a very short memorandum opinion because:

• The arbitrator, not the court, should determine whether the various factual scenarios fall under the arbitration clause.
• The lower court’s reliance on the fact that Amazon’s alleged conduct violates a criminal statute (although asserted in a civil case) was incorrect.

The court also says that the district court construed the arbitration clause too narrowly.

Concurring Judge Bumatay said he was worried about a jurisdictional defect: Article III standing. He thought that Tice did not satisfy Article III standing.

Judge Eaton (visiting) dissented. He agreed with the district court that an agreement to arbitrate cannot be a blank check to require arbitration for any and all conduct. “Equity requires more.”

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The appellate ruling is a great result for Amazon. Unless Tice convinces the court to rehear the case en banc, this is the end of the road for this lawsuit.

It’s slightly disappointing to see a case that raises so many important legal issues get resolved in a too-short memo opinion from a federal appeals court. I’d be curious to know why this happens. Is it a question of the judges simply not being able to agree and not wanting to take the time to explain their disagreements? Or is there some other metric the court uses to decide when a case does not warrant a published opinion?

Another case that raises similarly interesting issues is the case where minors asserted claims based on Alexa’s surreptitious recording of them (BF v. Amazon). Our blog post on that case is linked below. Contracting with minors (and how the right of disaffirmance works) is one of many vexing questions in the law of online contracts. In that case, the lower court (a federal judge in Seattle) ruled that the claims against Amazon asserted by minors could not be forced into arbitration. Interestingly, that case is also in front of the same panel that issued this ruling. Argument was heard on February 2, 2021, the same day this case was heard.

The other case we blogged about (the lawsuit against Google over surreptitious recording) is still in the district court where defendants and plaintiffs have agreed to a briefing schedule over a motion to dismiss.

Case citation: Tice v. Amazon, No. 20-55432 (9th Cir. Feb. 19, 2021)

the district court’s ruling [pdf]

Related posts:

Amazon Can’t Force Arbitration of Minors’ Privacy Claims Based on Alexa Recordings–BF v. Amazon

Ninth Circuit Reinstates Decade-Old Lawsuit Against Facebook For Tracking Logged-Out Users–In re Facebook Internet Tracking

Amazon Can’t Force Arbitration of Minors’ Privacy Claims Based on Alexa Recordings–BF v. Amazon

Court Sends Google Assistant Privacy Lawsuit Back for a Redo