Lawsuit Still Goes to Arbitration, Even Though Amazon Has Since Removed Its Arbitration Clause–Nicosia v. Amazon

October 29, 2021 · by Venkat Balasubramani · in E-Commerce, Licensing/Contracts

This is the latest update in Nicosia’s multi-year lawsuit against Amazon. That lawsuit has already resulted in two Second Circuit opinions (and three blog posts).

The district court found Nicosia was bound by the arbitration agreement in Amazon’s terms of service. The Second Circuit affirmed this decision. He now asks the district court to modify and vacate its ruling because Amazon has since eliminated its mandatory arbitration clause.

After the Second Circuit affirmed the district court’s rulings that the claims asserted by Nicosia must be arbitrated, the case went to arbitration. The arbitrator’s decision itself is filed under seal, but the court recaps the arbitrator’s findings:

Although the contracts between Plaintiff and Amazon concerning the purchase of the diet pills at issue were illegal and unenforceable, the CoU that governed the transactions were severable and remained enforceable.

The arbitrator denied Nicosia’s request for declaratory relief that the arbitration clause was void. According to the arbitrator, the plaintiff only sought declaratory relief and did not seek damages.

Following the date of the arbitrator’s decision, Amazon modified its terms to eliminate mandatory arbitration. The court says this does not warrant modification of its judgment. The two questions are whether the court’s judgment has “prospective application” and whether such application would be inequitable. The court finds neither condition satisfied. The court says this is the end of the road for Nicosia:

[t]here must be an end to litigation someday, and free, calculated deliberate choices are not to be relieved from.

Amazon was somewhat unique in its decision to get rid of mandatory arbitration. Companies (such as Uber) have dealt with a big volume of arbitration demands, but companies haven’t abandoned arbitration en masse. It would have been interesting to have been a fly on the wall in the room when Amazon made its decision.

I’m curious to know what prompted the court to allow the parties to seal the arbitration order. That seems like it would be interest to the general public. Perhaps some media organization will ask the court to unseal the arbitrator’s ruling.

When I first read the court’s most recent order, I predicted a return trip to the Second Circuit for Mr. Nicosia. Sure enough, a check of the docket confirms he will make his third trip there for this case.

Case citation: Nicosia v. Amazon, 2021 U.S. Dist. LEXIS 188893 (S.D.N.Y. Sept. 28, 2021)

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

Evidentiary Failings Undermine Arbitration Clauses in Online Terms

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

‘Flash Sale’ Website Defeats Class Action Claim With Mandatory Arbitration Clause–Starke v. Gilt

Some Thoughts On General Mills’ Move To Mandate Arbitration And Waive Class Actions

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

Qwest Gets Mixed Rulings on Contract Arbitration Issue—Grosvenor v. Qwest & Vernon v. Qwest

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