709 F. App'x 862
9th Cir.2017Background
- Allen Wiseley purchased from Amazon in 2012–2013 and challenged enforcement of Amazon's Conditions of Use (COU) arbitration provision after the district court compelled arbitration.\
- Wiseley conceded the COU formed a valid contract but argued the choice-of-law clause (California law) and the arbitration clause were unconscionable.\
- Amazon moved to compel arbitration; the district court granted the motion and Wiseley appealed.\
- The Ninth Circuit applied California choice-of-law principles (Restatement §187) and concluded Washington law governs because Washington has the most significant relationship.\
- The court found only minimal procedural unconscionability from the COU’s adhesive form and sufficient notice on Amazon’s checkout/registration pages; no additional indicia of procedural unconscionability existed.\
- The court rejected Wiseley’s substantive-unconscionability challenges to: (1) the unilateral-modification clause, (2) the IP-exception for injunctive relief, and (3) the attorneys’ fees provision, and affirmed the order to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for enforceability | California law should apply, protecting consumers more | Washington law governs under §187 and Nedlloyd because of contacts | Washington law applies; California protections not shown to be more protective here |
| Procedural unconscionability — notice/formation | COU adhesive and inadequate notice of arbitration terms | Notices on checkout and account pages gave reasonable opportunity to understand and Wiseley conceded valid contract | No procedural unconscionability; notice was sufficient to form contract |
| Procedural unconscionability — presentation of arbitration clause | Presentation and incorporation by reference to AAA rules ambiguous/unfair | Clause formatting, bolding, and AAA reference were adequate; phone number available | No procedural unconscionability from clause formatting or AAA incorporation |
| Substantive unconscionability — unilateral modification, IP carve-out, fees | Clauses are one-sided and chill claims (modification, IP exception, fees) | Clauses limited by implied covenant of good faith; IP carve-out justified; fees mirror statutory and convertible rights | Clauses are not substantively unconscionable; arbitration compelled |
Key Cases Cited
- Nedlloyd Lines, B.V. v. Superior Court, 3 Cal.4th 459 (choice-of-law test for consumer contracts)\
- Davis v. O’Melveny & Myers, 485 F.3d 1066 (comparison of state consumer-protection regimes)\
- Poublon v. C.H. Robinson Co., 846 F.3d 1251 (California procedural/substantive unconscionability framework applied to arbitration clauses)\
- Zuver v. Airtouch Commc’ns, Inc., 153 Wash.2d 293 (Washington law on notice and adhesion)\
- Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (notice and browsewrap/clickwrap principles under California law)\
- Tompkins v. 23andMe, Inc., 840 F.3d 1016 (limiting unilateral modification by implied covenant of good faith)\
- Baltazar v. Forever 21, Inc., 62 Cal.4th 1237 (California sliding-scale unconscionability analysis)\
- Satomi Owners Ass’n v. Satomi, LLC, 167 Wash.2d 781 (analysis of one-sided arbitration options under Washington law)\
- Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899 (standards for arbitration-fee burden and unconscionability)\
- McKee v. AT & T Corp., 164 Wash.2d 372 (conversion of unilateral fee-shifting clauses under Washington law)