Amazon List Price Class Action Lawsuit Pushed Into Arbitration

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A putative Amazon class action lawsuit that claims the online retail giant misrepresents competitive pricing by “cherry-picking” the highest price it can find for an item has been dismissed by a California federal court.

The court found that plaintiffs Andrea Fagerstrom and Allen Wiseley, who made multiple purchases through amazon.com, accepted the terms of Amazon’s arbitration agreement at the time they made their online purchase.

According to Amazon’s purchasing agreement, all customers are required to complete their orders by reviewing a final checkout page. The Amazon list price class action lawsuit states that at the top of the checkout page, under the heading “review your order,” there is a notice to customers that reads: “By placing your order, you agree to Amazon.com’s privacy notice and conditions of use.”

As part of the conditions of purchasing an Amazon item, customers must agree to the “conditions of use” which states: “Any dispute or claim relating in any way to your use of any Amazon Service, or to any products or services sold or distributed by Amazon or through Amazon.com will be resolved by binding arbitration, rather than in court.”

Amazon claimed that Fagerstrom and Wiseley agreed to their terms at the point of sale which also meant that they accepted the arbitration agreement that further prevents customers from bringing class action lawsuits against the online company. The court sided with Amazon based on this agreement and denied the plaintiffs’ claims that Amazon’s alleged ability to change the terms of arbitration at any time are invalid.

The Amazon list price class action lawsuit was filed by Fagerstrom and Wiseley over allegations that the online retailer used the highest price that a product was sold for as a “comparative” list price. By this action, the plaintiffs claim that customers are misled into believing they are getting a discount by purchasing items through amazon.com.

Fagerstrom alleges that she purchased a Vitamix blender from Amazon in September 2014. At the time, Fagerstrom claims that Amazon displayed a “list price” of $329, and an “Amazon price” of $299, which she believed would save her $30. The Amazon list price class action lawsuit states that $299 was actually the normal retail price offered through other retailers including the manufacturer and target.com.

Likewise, plaintiff Wiseley claims to have purchased a digital to analog audio converter from a third party seller on Amazon in April 2013. He claims that the Amazon display “list price” of $59, compared to a third-party seller’s price of $21, portrayed a savings of $38.

The plaintiffs allege that Amazon engaged in false and deceptive advertising in violation of California law.

The plaintiffs are represented by Jeffrey R. Krinsk, Mark L. Knutson, William R. Restis and Trenton R. Kashima of Finkelstein & Krinsk LLP.

The Amazon List Price Class Action Lawsuit is Fagerstrom, et al. v. Amazon.com Inc., et al, Case No. 3:15-cv-00096, in the U.S. District Court for the Southern District of California.

UPDATE: On Feb. 29, 2016, Allen Wiseley asked the 9th U.S. Circuit Court of Appeals to review a district court’s decision to enforce an arbitration agreement in this Amazon list price class action lawsuit.