Allen Wiseley v. amazon.com, Inc.

FILED
NOT FOR PUBLICATION
SEP 19 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALLEN WISELEY, individually and on No. 15-56799
behalf of all others similarly situated,
D.C. No.
Plaintiff-Appellant, 3:15-cv-00096-BAS-DHB
and
MEMORANDUM*
ANDREA FAGERSTROM,
Plaintiff,
v.
AMAZON.COM, INC., a Delaware
Corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
Cynthia A. Bashant, District Judge, Presiding
Argued and Submitted August 30, 2017
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: W. FLETCHER and IKUTA, Circuit Judges, and BARKER,** District
Judge.
Allen Wiseley appeals from the district court’s order granting Amazon’s
motion to compel arbitration. We have jurisdiction under 9 U.S.C. § 16(a)(3).
The Conditions of Use (COU) created a valid contract between Amazon and
its customers, as Wiseley conceded. Applying California’s approach to
determining the enforceability of the choice-of-law provision in the COU, see
Restatement (Second) of Conflict of Laws § 187(2)(b); Nedlloyd Lines, B.V. v.
Superior Court, 3 Cal. 4th 459, 466 (1992), we conclude that Washington law
applies here. Wiseley fails to explain how California’s consumer protection
statutes are more protective than Washington’s consumer protection statutes;
rather, Washington’s and California’s consumer protection laws and protections
against unconscionable contracts appear to be substantially similar. See Davis v.
O’Melveny & Myers, 485 F.3d 1066, 1079 n.6 (9th Cir. 2007), overruling on other
grounds recognized by Ferguson v. Corinthian Coll., Inc., 733 F.3d 928, 937 (9th
Cir. 2013); Al-Safin v. Circuit City Stores, Inc., 394 F.3d 1254, 1261 (9th Cir.
2005). Therefore, applying Washington law is not contrary to a fundamental
policy of California law. While California’s sliding-scale approach to
**
The Honorable Sarah Evans Barker, United States District Judge for
the Southern District of Indiana, sitting by designation.
2
unconscionability, see Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1243–44
(2016), might hypothetically invalidate some contracts that would be upheld under
Washington’s single-prong approach, see Gandee v. LDL Freedom Enters. Inc.,
176 Wash. 2d 598, 603 (2013), the reverse is also true. Moreover, any distinction
does not bear on this case, as we would reach the same result under California law.
While the COU are adhesive in nature, adhesion is insufficient to support a
finding of procedural unconscionability under Washington law, Zuver v. Airtouch
Commc’ns, Inc., 153 Wash. 2d 293, 304 (2004), and creates only a minimal degree
under California law. See Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1261–62
(9th Cir. 2017); Baltazar, 62 Cal. 4th at 1245. No additional indicia of procedural
unconscionability are present.
The notices on Amazon’s checkout and account registration pages, which
alerted Wiseley that clicking the corresponding action button constituted
agreement to the hyperlinked COU, were in sufficient proximity to give him a
“reasonable opportunity to understand” that he would be bound by additional
terms. Zuver, 153 Wash. 2d at 304 (quoting Shroeder v. Fageol Motors, Inc., 86
Wash. 2d 256, 260 (1975)). Wiseley conceded before the district court that there
was sufficient notice to create a valid contract, and neither California nor
Washington allows a party to escape contract obligations if it had actual or
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constructive notice. See Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1176,
1179 (9th Cir. 2014) (applying California law); W. Consultants, Inc. v. Davis, 177
Wash. App. 33, 41 (2013).
There is no procedural unconscionability in the presentation of the
arbitration clause itself, which appears in the same size font as the rest of the COU,
with key terms bolded. Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899,
914 (2015) (explaining that any “obligation to highlight the arbitration clause of
[the] contract . . . would be preempted by the [Federal Arbitration Act]”).
Nor does the incorporation by reference of the American Arbitration
Association’s (AAA) rules create procedural unconscionability. See Poublon, 846
F.3d at 1262; Baltazar, 62 Cal. 4th at 1246; cf. Woodward v. Emeritus Corp., 192
Wash. App. 584, 593, 595, 607 (2016) (holding that a similar provision referencing
the AAA rules “effectively incorporates the Rules by reference”). Although
Wiseley argues that it was unclear which rules would apply, he had a “reasonable
opportunity to understand,” see Zuver, 153 Wash. 2d at 304 (quoting Shroeder, 86
Wash. 2d at 260), that the Consumer Arbitration Rules would apply in the context
of his consumer purchases, and he could call the provided phone number to resolve
any lingering uncertainty. While the AAA renamed the Supplementary Procedures
for Consumer-Related Disputes in 2014, this does not render the reference
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ambiguous or misleading in the version of the COU that applied when Wiseley
made his purchases in 2012 and 2013.
Wiseley’s three arguments for substantive unconscionability also lack
merit.1 First, the unilateral modification clause does not render the arbitration
provision substantively unconscionable because Amazon is limited by the implied
covenant of good faith and fair dealing.2 See Tompkins v. 23andMe, Inc., 840 F.3d
1016, 1033 (9th Cir. 2016) (applying California law); cf. Rekhter v. Dep’t of Soc.
& Health Servs., 180 Wash. 2d 102, 112–13 (2014) (holding that the duty of good
faith limits a party’s unilateral discretion to determine a contract term).
Second, the arbitration clause’s exemption of intellectual property claims for
injunctive relief does not make the provision overly harsh or one-sided. Under
Washington law, a provision that “gives [one party] alone the option of requiring
arbitration” is not substantively unconscionable, so whether one party is more
likely to bring such claims is immaterial. Satomi Owners Ass’n v. Satomi, LLC,
167 Wash. 2d 781, 815–16 (2009). Even if Amazon is more likely to bring
1
Because Wiseley has shown only a minimal degree of procedural
unconscionability under California law, a high degree of substantive
unconscionability is required under the sliding-scale approach. See Poublon, 846
F.3d at 1263.
2
Since the enforceability of provisions outside the arbitration clause is a
question for the arbitrator, we address unilateral modification only as it applies to
the arbitration clause. Tompkins, 840 F.3d at 1032.
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intellectual property claims than its consumers, California law grants Amazon “an
extra ‘margin of safety’ based on legitimate business needs.” See Tompkins, 840
F.3d at 1031 (quoting Baltazar, 62 Cal. 4th at 1250).
Finally, the attorneys’ fees provision does not create substantive
unconscionability because it mirrors Washington’s statutory right to attorneys’ fees
for frivolous claims. Wash. Rev. Code § 4.84.185. To the extent the provision is
unilateral, Washington law automatically converts it to a bilateral provision that
would afford Wiseley the same right. See id. § 4.84.330; McKee v. AT & T Corp.,
164 Wash. 2d 372, 400 (2008). The fees provision also complies with California
law, which permits Amazon to seek fees as a sanction for frivolous claims. See
Poublon, 846 F.3d at 1268. Further, Wiseley has not shown that the overall
arbitration fee scheme “would be unaffordable or would have a substantial
deterrent effect in [his] case.” Sanchez, 61 Cal. 4th at 920 (2015).
AFFIRMED.
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