384 F. Supp. 3d 254
E.D.N.Y2019Background
- Dean Nicosia purchased "1 Day Diet" on Amazon in Jan. and Apr. 2013 from an account registered to his wife, Annemarie, which had been enrolled in Amazon Mom (a promotional Prime trial) in Sept. 2011 and later in paid Prime in Oct. 2012.
- Amazon's Conditions of Use (COU) were amended on Aug. 19, 2011 to include a broad arbitration clause and a class-action waiver; Prime and Mom sign‑up flows contained hyperlinked T&C and language stating that signing up constituted agreement to Prime Terms and Conditions and the COU.
- Nicosia sued Amazon (July 2014) alleging sale of a product containing sibutramine; Amazon moved to dismiss/compel arbitration; Judge Townes granted dismissal but the Second Circuit reversed as to the checkout-page notice issue, finding factual questions about notice.
- After discovery the magistrate judge recommended compelling arbitration because Nicosia had actual or constructive notice via the checkout page; the district court adopted a different ground: Amazon can enforce an arbitration agreement entered into by Annemarie via Amazon Mom/Prime against Nicosia under equitable estoppel/direct‑benefits principles.
- Key legal determinations: (1) Annemarie, through an agent, validly assented to Prime/Mom terms that incorporated the COU arbitration clause; (2) those terms applied to subsequent purchases (not limited to Prime‑eligible items) and survived conversion from Mom trial to paid Prime; (3) Nicosia, a non‑signatory who used the account, is equitably estopped from avoiding arbitration because he knowingly accepted the account’s contractual benefits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Amazon can compel arbitration based on consent via checkout page | Nicosia: checkout-page notice was insufficiently conspicuous as a matter of law (per Second Circuit) | Amazon: checkout flow and repeated use gave actual/constructive notice | Court did not resolve on checkout notice; relied on alternate ground (account T&C) to compel arbitration |
| Whether Annemarie validly agreed to arbitration when enrolling in Amazon Mom/Prime | Nicosia: Mom/Prime enrollment irrelevant or did not supply notice binding for later purchases | Amazon: Mom sign‑up affirmatively notified users and incorporated Prime/COU (with arbitration); re-enrollment ratified terms | Court: Mom sign‑up provided reasonably conspicuous notice; Annemarie (via agent) assented; terms applied after re-enrollment |
| Whether the arbitration clause covers non‑Prime purchases like 1 Day Diet | Nicosia: clause inapplicable because purchases were not Prime‑eligible | Amazon: COU arbitration language is broad and covers any products/services sold through Amazon | Court: clause is broad; applies to all Amazon purchases, Prime‑eligible or not |
| Whether a non‑signatory user of an account (Nicosia) can be compelled to arbitrate | Nicosia: only individuals can consent; he never signed arbitration agreement | Amazon: equitable estoppel/direct‑benefits — a user who knowingly accepts account benefits is bound | Court: Nicosia is equitably estopped/direct‑benefits estoppel applies; compelled to arbitrate |
Key Cases Cited
- Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (hybridwrap/checkout‑page notice standard; factual question about conspicuousness)
- Bensadoun v. Jobe‑Riat, 316 F.3d 171 (2d Cir. 2003) (summary‑judgment‑style standard for motions to compel arbitration)
- Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (presumption favoring arbitration on scope questions)
- Granite Rock Co. v. Int'l Broth. of Teamsters, 561 U.S. 287 (U.S. 2010) (FAA purpose to place arbitration agreements on equal footing with other contracts)
- Thomson‑CSF, S.A. v. American Arbitration Ass'n, 64 F.3d 773 (2d Cir. 1995) (nonsignatory may be bound under ordinary contract/agency principles)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (preemption of state rules that single out arbitration; class‑waiver enforceability)