Plaintiffs Must Arbitrate Amazon Prime Class Action Lawsuit

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On Dec. 9, the lead plaintiffs of the Amazon Prime hidden charges class action lawsuit were told by the presiding Washington federal judge that they must enter into arbitration with Amazon Services LLC, ruling that the plaintiffs’ and the Class’ consumer claims are legally bound to arbitration per Amazon’s “clickwrap” agreement.

The Amazon Prime class action lawsuit alleges the internet vendor worked with third party sellers to increase the price of Prime eligible items, thus charging Prime Members, who already pay a yearly premium to use the free-shipping service, additional hidden fees.

According to Tuesday’s court ruling, U.S. District Judge John Coughenour sided with Amazon’s arguments and granted the company’s motion to arbitrate claims, ruling that arbitration provision included in the Amazon Prime clickwrap agreement was enforceable and applicable to the hidden charges allegations brought against the internet retailer in this Amazon class action lawsuit.

In late September, Amazon filed a motion to dismiss the hidden charges class action lawsuit, claiming that per the terms and conditions set out in the Amazon Prime user agreement, all legal consumer claims must be arbitrated with the company. This arbitration provision includes claims set out by the plaintiffs in this Amazon class action lawsuit and any claims brought up by potential Class Members.

The plaintiffs disagreed, arguing the arbitration provisions that all Amazon Prime users agree to before signing up for the Amazon Prime service could not be legally enforced because Amazon retains the right to change the Prime terms of agreement without notice or consent from Prime Members.

However, according to Judge Coughenour’s ruling, “there is no binding legal authority compelling a finding that the reservation of the right to change the terms makes the [conditions of use]/arbitration agreement unenforceable.” The judge also pointed out that the cases cited by the plaintiffs in their hidden charges class action lawsuit to support their argument against arbitration are not considered binding authorities and differ from the Amazon class action lawsuit “on several salient points.”

Lead plaintiffs Cemal Ekin and Marcia Burke originally filed this Amazon Prime class action lawsuit in February, alleging the online retailer’s Amazon Prime free-shipping service charged user hidden fees. The plaintiffs claim Amazon encourage its third party vendors to artificially increase the cost of Amazon Prime eligible items. Since Amazon allegedly receives a cut of the price for each item sold by a third party vendor, the plaintiffs claim the Amazon encouraged this price inflation in order to make-up for the money spent on Prim free-shipping  for these third-party eligible items.

Recently, a similar Amazon class action lawsuit was filed in California Superior Court at the at the end of November, alleging the online retailer purposefully misrepresents the list price of products sold in its website in order to lead customers to believe they are receiving greater discounts.

The plaintiffs are represented by Sirianni Youtz Spoonemore and Scott & Scott LLP.

The Amazon Prime Hidden Charges Class Action Lawsuit is Dr. A. Cemal Ekin v. Amazon Services LLC, Case No. 2:14-cv-00244, in the U.S. District Court for the Western District of Washington.