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Inc. v. Amazon.com, Inc.

United States District Court, W.D. Washington

November 6, 2014

HARD 2 FIND ACCESSORIES, INC., Plaintiff,
v.
AMAZON.COM, INC., a Delaware corporation; and APPLE, INC., a California corporation, Defendants

Page 1167

For Hard 2 Find Accessories, Inc., Plaintiff: Matthew Z Crotty, LEAD ATTORNEY, CROTTY & SON LAW FIRM, SPOKANE, WA; Bradley C Crockett, LAYMAN LAW FIRM, PLLP, SPOKANE, WA.

For Amazon.com, Inc., James C. Grant, James C. Grant, Tom Wyrwich, DAVIS WRIGHT TREMAINE (SEA), SEATTLE, WA.

For Apple, Inc., a California Corporation, Defendant: Gabriel M. Ramsey, Robert L. Uriarte, LEAD ATTORNEYS, PRO HAC VICE, ORRICK HERRINGTON & SUTCLIFFE (MENLO PK), MENLO PARK, CA; Robert A Rosenfeld, LEAD ATTORNEY, PRO HAC VICE, ORRICK HERRINGTON & SUTCLIFFE (SF), SAN FRANCISCO, CA; Daniel J Dunne, Jr., ORRICK HERRINGTON & SUTCLIFFE LLP (SEA), SEATTLE, WA.

Page 1168

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

RICARDO S. MARTINEZ, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

This matter comes before the Court on Defendant Amazon.com, Inc.'s (" Amazon" )

Page 1169

Motion to Dismiss under Rule 12(b)(6) for failure to state a claim. Dkt. #15. Defendant argues that Plaintiff's complaint should be dismissed because it fails to allege facts sufficient to support any of the alleged causes of action. Plaintiff, Hard 2 Find Accessories, Inc. (" H2F" ), essentially responds that Amazon's motion is an effort to bully small business, and a disguised attempt to reinstate code pleading in this District. Dkt. #24. Plaintiff further argues that it has pled sufficient facts to meet the appropriate notice pleading standard and requests that the Court deny Defendant's motion. Id. For the reasons set forth below, the Court disagrees with Plaintiff and GRANTS Defendant's motion to dismiss.

II. BACKGROUND

This case arises from allegations of selling counterfeit iPad covers on Amazon.com. Amazon enables third-party sellers to sell their products over Amazon's websites. Dkt. #1 at ¶ 10. H2F is a former seller. As a seller, H2F was required to accept and abide by Amazon's Business Solutions Agreement (" BSA" ). Dkt. #1 at ¶ 12. H2F admits that it entered into such agreement in or about January 2012.[1] Id.

The BSA provides that Amazon may terminate or suspend the Agreement or any service by notice to the seller for any reason at any time. Dkt. #16, Ex. A at § 3. Likewise, sellers may terminate the Agreement or service for any reason at any time. Id. Accordingly, the Agreement provides for an " at will" relationship between sellers and Amazon.

The BSA also provides:

2. Service Fee Payments.
. . .
If we conclude that your actions and/or performance in connection with the Agreement may result in customer disputes, chargebacks or other claims, then we may, in our sole discretion, delay initiating any remittances and withhold any payments to be made or that are otherwise due to you under this Agreement for the shorter of: (a) a period of ninety (90) days following the initial date of suspension; or (b) completion of any investigation(s) regarding your actions and/or performance in connection with the Agreement.

Dkt. #1 at ¶ 18 and Dkt. #16, Ex. A at § 2 (emphasis added).

On June 14, 2013, Amazon informed H2F that it had removed two of H2F's listings for Apple iPad Smart Covers because it had been notified by the rights owner (Apple) that the offers infringed their intellectual property rights and may be counterfeit. Dkt. #1 at ¶ 26. The communication from Amazon also suggested that H2F contact Apple directly to resolve the dispute, and asked H2F to tell Apple to contact Amazon if the dispute was resolved so Apple could withdraw its complaint. Id.

On June 17, 2013, Amazon informed H2F that it had removed its selling privileges, canceled its listings, and placed a temporary hold on any funds in its Amazon.com

Page 1170

seller account. Dkt. #1 at ¶ 56. Amazon explained that it was taking such action because it believed H2F had been selling counterfeit products, and items offered for sale on Amazon.com must be authentic. Id. Amazon further informed H2F that the hold would be removed after 90 days and any remaining funds would be available. Id. Amazon also provided directions if H2F wished to appeal the decision. Id. H2F appealed the same day. Id. at ¶ 58. On June 18, 2013, Amazon denied the appeal. Id. at ¶ 59.

H2F alleges that it subsequently resolved the complaint with Apple. Dkt. #1 at ¶ ¶ 60-63. H2F then informed Amazon that the complaint had been resolved, and asked for reinstatement. Id. at ¶ 64. However, on June 27, 2013, Amazon informed H2F that it would not reinstate its selling privileges. Id. at ¶ 65. H2F alleges that this communication " permanently shuttered" its business. Id.

After several weeks of subsequent communication between H2F, Apple and Amazon, H2F alleges it learned that Amazon had revoked its selling privileges because of additional customer complaints it had received about H2F's products, as well an additional infringement complaint. Dkt. #1 at ¶ ¶ 71-78.

H2F alleges that it has lost total revenue of $180,112.61 per month since its Amazon.com account was suspended/terminated. Dkt. #1 at ΒΆ 80. As a result, it has brought claims against Amazon.com for: breach of contract, violations of federal and state antitrust laws, violations of Washington's Uniform Money Services Act (" UMSA" ), breach of covenants of good faith and fair dealing, violations of Washington's Consumer Protection Act (" CPA" ), ...


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