Nicosia v. Amazon.com, Inc.
2016 U.S. App. LEXIS 15656
| 2d Cir. | 2016Background
- In 2013 Nicosia purchased "1 Day Diet" from Amazon; the product contained sibutramine, a drug the FDA withdrew in 2010 for serious cardiovascular risks. Nicosia did not know the product contained sibutramine and had no prescription.
- Nicosia sued Amazon under the Consumer Product Safety Act and state law seeking damages and an injunction requiring Amazon to stop selling sibutramine-containing products and to notify past purchasers.
- Amazon moved to dismiss under Rule 12(b)(6), arguing Nicosia was bound by Amazon’s December 2012 "Conditions of Use" containing a mandatory arbitration clause; the district court dismissed the complaint and denied preliminary injunctive relief for lack of standing.
- The district court relied on the Order Page (the checkout screen) and the 2012 Conditions of Use as integral to the complaint, and also considered Amazon’s declaration that Nicosia had registered an account in 2008 (with earlier terms that lacked arbitration).
- The Second Circuit affirmed denial of injunctive relief (no plausible risk of future harm) but vacated the dismissal: it held the district court erred by considering disputed extrinsic materials (the 2008 registration/pages) and that, on the properly considered record, reasonable minds could disagree whether the 2012 Conditions gave constructive notice of the arbitration clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Amazon's arbitration clause bound Nicosia | Nicosia: he lacked actual or adequate constructive notice of the 2012 Conditions of Use at checkout, so no mutual assent to arbitrate | Amazon: the checkout page put users on notice (“By placing your order, you agree...”) and the 2012 Conditions (with arbitration) govern purchases | Vacated dismissal — factual dispute: reasonable minds could disagree; not bound as a matter of law on Rule 12(b)(6) review |
| Use of extrinsic materials at motion to dismiss | Nicosia: district court improperly relied on disputed evidence (Registration Page, 2008 terms, account-creation assertion) | Amazon: account-registration evidence shows prior assent and change-of-terms notice | Court: district court erred to consider disputed 2008 Registration and related materials at 12(b)(6); Order Page and 2012 Conditions were integral and may be considered, but disputed account evidence requires more process |
| Whether to treat Amazon’s motion as a motion to compel arbitration (summary-judgment-type review) | Nicosia: district court should have applied summary-judgment standard (Bensadoun) | Amazon: moved to dismiss for failure to state a claim rather than to compel arbitration | Court: district court did not err in treating the motion as a 12(b)(6) dismissal because Amazon did not move to compel arbitration or indicate intent to force arbitration |
| Standing for preliminary injunction (to stop sales and require notices) | Nicosia: past purchase + ongoing sales of other products creates real risk of future harm and justifies injunctive relief | Amazon: it stopped selling 1 Day Diet and Nicosia alleged no intent to buy from Amazon again; no concrete likelihood of future injury | Affirmed denial: Nicosia lacks standing to obtain the requested injunctive relief (no credible risk of future harm) |
Key Cases Cited
- AT & T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA embodies strong federal policy favoring arbitration)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (arbitrability is for courts absent clear delegation)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state plausible claim)
- Specht v. Netscape Commc'ns Corp., 306 F.3d 17 (2d Cir. 2002) (browsewrap vs clickwrap notice rules)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) (online contract principles and constructive knowledge discussion)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (online assent and inquiry-notice principles)
- Bensadoun v. Jobe-Riat, 316 F.3d 171 (2d Cir. 2003) (standards when courts determine arbitrability)