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Ekin v. Amazon Services, LLC

United States District Court, W.D. Washington, Seattle

February 10, 2015

DR. A. CEMAL EKIN, Plaintiff,
v.
AMAZON SERVICES, LLC, Defendant.

ORDER RE PLAINTIFF'S MOTION FOR CLARIFICATION OR 28 U.S.C. § 1292(B) CERTIFICATION

JOHN C. COUGHENOUR, District Judge.

This matter comes before the Court on Plaintiff's Motion to Clarify Order Compelling Arbitration, or, in the Alternative, for Certification under 28 U.S.C. § 1292(b). (Dkt. No. 44.) Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby DENIES the Motion for the reasons explained herein.

I. BACKGROUND

Plaintiff Dr. Cemal Ekin seeks to pursue a class action lawsuit against Defendant Amazon Services, LLC based on what he alleges was Amazon's practice of encouraging certain vendors to increase the base price of their products so as to recapture the revenue lost as a result of providing free shipping to Amazon Prime members. (First Amended Complaint, Dkt. No. 5 at ¶¶ 3.4; 6.1-6.3; 7.1.) This Court granted Amazon's Motion to Compel Arbitration (Dkt. No. 24) on December 10, 2014. (Order, Dkt. No. 43.) We found that the Federal Arbitration Act, [1] the precedent set by AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (U.S. 2011) and Coneff v. AT&T Corp., 673 F.3d 1155, 1160-61 (9th Cir. 2012), and the fact that Plaintiffs accepted Amazon's broad "relating to any dispute" (past or present) arbitration clause[2] compelled the arbitration of Plaintiff's claims.

Plaintiff Dr. Ekin "respectfully disagrees" with the Court and states that he "has elected not to pursue arbitration of his dispute with Amazon, " and instead "wishes to pursue his remedies on appeal to the Ninth Circuit." (Plaintiff's Motion to Clarify, Dkt. No. 44 at 1.) Accordingly, Plaintiff requests that the Court either "dismiss his action as a result of the Order or, in the alternative, certify the Order for appeal." (Id. ) We deny both requests for the reasons discussed below.

II. DISCUSSION

A. Plaintiff's Request for Clarification

The Court declines to dismiss this action.

In its Motion to Compel Arbitration, Amazon explicitly moved for a stay, not dismissal. (Dkt. No. 24 at 1, 17-18.) Nothing in our responsive Order (Dkt. No. 43) suggests that our "[g]ranting [of] Defendant's Motion to Compel Arbitration" was in part only, or that this case was to be dismissed contrary to the prevailing party's request.

That our Order included an implied stay is amply supported by Ninth Circuit precedent. In MediVas, LLC v. Marubeni Corp., the Court of Appeals expressed a strong preference that arbitratable cases be stayed rather than dismissed. 741 F.3d 4 (9th Cir. 2014). Specifically, the Court "adopt[ed] a rebuttable presumption that an order compelling arbitration but not explicitly dismissing the underlying claims stays the action." (Id. at 9.) Plaintiff attempts to circumvent this rule by citing dicta contained in a footnote in which the MediVas Court posited that "a dismissal allowing immediate appeal might be appropriate" if "no arbitration will actually take place, " ( id. at 9, fn. 4 (emphasis added)), and then by declaring that arbitration will not take place in this case because "[i]t was never my intention to, and I will not, pursue this case through arbitration" (Ekin Declaration, Dkt. No. 49 at 1).

The MediVas Court's hypothetical rumination cannot be leveraged in the manner Plaintiff proposes. Even were we to interpret this footnote as Plaintiff urges, it would only allow this Court discretion to dismiss the instant suit rather than to stay it. However, we decline to exercise any such discretion in Plaintiff's favor given that under these particular circumstances, this would subvert the purposes and provisions of the FAA. Section 16 of the FAA "provides that a party may appeal from a district court order denying a motion to compel arbitration [while] a party cannot appeal an order compelling arbitration." Bushley v. Credit Suisse First Boston, 360 F.3d 1149, 1154 (9th Cir. 2004); see also Johnson v. Consumerinfo.com, Inc., 745 F.3d 1019, 1022 (9th Cir. 2014) ("Congress intended to prohibit immediate appeals from the orders listed in § 16(b)(1)-(4), " ensuring that arbitration proceed). As the Supreme Court established in Concepcion, a plaintiff may not avoid an arbitration agreement simply because he would prefer to pursue class claims rather than arbitrate individually. 131 S.Ct. at 1750-51, 1753. As Defendant states:

[T]his dicta... cannot mean, as Dr. Ekin suggests, that the Court must abide by a plaintiff's choice to dismiss without prejudice because he only wants to pursue claims on a class basis and therefore seeks to create grounds for immediate appeal of an order compelling individual arbitration.... If MediVas stood for the proposition that a class plaintiff could manufacture a basis to appeal without a 1292(b) certification, that would effectively read section 16 out of the FAA for putative class claims, yet the Act permits no such exception. It would also undermine Congress's intent to "move the parties to an arbitratable[3] dispute out of court and into arbitration as quickly and easily as possible."

(Amazon's Response, Dkt. No. 47 at 4-5 (citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 22 (1983)).)

In sum, the Court declines to exercise any discretion (that Plaintiff argues) we possess to dismiss this case. We clarify, despite the fact that this is already implied by our Order, that Plaintiff's case is stayed pending the arbitration in which the parties are to engage should Plaintiff continue to desire resolution of his claims.

B. Plaintiff's Request for Section 1292(b) Review

The Court declines to certify this issue for appeal.

An interlocutory appeal pursuant to 28 U.S.C. § 1292(b) is the only avenue allowed by the FAA for appeal of an order staying the case and compelling arbitration. 9 U.S.C. § 16(b). Section 1292 appeals are permitted only with the express approval of both the district court and the court of appeals. Such approval is only possible for rulings in which there is (1) a controlling question of law, (2) which presents substantial grounds for difference of opinion, and when (3) an immediate appeal will materially advance the ultimate termination of the litigation. In re Cement Antitrust Litigation, 673 F.2d 1020, 1026 (9th Cir. 1982); see also Couch v. Telescope, Inc., 611 F.3d 629, 633 (9th Cir. 2010) ("[c]ertification under § 1292(b) requires the district court to expressly find in writing that all three § 1292(b) requirements are met."). Consent to an interlocutory appeal under Section 1292(b) is only granted in "exceptional situations." In re Cement Antitrust Litigation, 673 F.2d at 1026.

Plaintiff argues that the controlling and undecided question of law is whether a unilateral change-in-terms provision in a contract renders any arbitration provision in that contract unenforceable. (Plaintiff's Motion, Dkt. No. 44 at 3.)

Neither in Plaintiff's Response to Amazon's Motion to Compel, nor in his instant Motion for Certification for Appeal, can Plaintiff cite a Ninth Circuit Court of Appeals or Western District of Washington case that holds that a unilateral change-in-terms provision, by itself, with no other elements of unconscionability, is sufficient to render an agreement unenforceable.[4] Plaintiff cites Ninth Circuit cases holding that contracts that happened to contain unilateral change-in-terms provisions were unenforceable, but Plaintiff did not acknowledge the limits on the application of these holdings. To wit, in the chief case cited by Plaintiff, the Ninth Circuit plainly stated that it was "draw[ing] no conclusion as to whether [the change-of-terms provision], by itself, renders the contract unenforceable. Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1179 fn. 23 (9th Cir. 2003) (emphasis added).

Plaintiff does cite cases from other district courts, all from other states and some of which lie outside the Ninth Circuit, and from other courts of appeal, holding that change-in-terms provisions in contracts "destroy reciprocity and invalidate the arbitration clause as a matter of law, " including Carey v. 24 Hour Fitness, USA, Inc., 669 F.3d 202, 206-07 (5th Cir. 2012); Morrison v. Amway Corp., 517 F.3d 248, 255 (5th Cir. 2008); Dunmais v. American Golf Corporation, 299 F.3d 1216, 1219 (10th Cir. 2002); In re Zappos, Inc. Consumer Data Security Breach Litigation, 893 F.Supp.2d 1058, 1065-66 (D. Nevada 2012); Phox v. Atriums Management Co., 230 F.Supp.2d 1279, 1283 (D. Kan. 2002); Keanini v. United Healthcare Services., 2014 U.S. Dist. LEXIS 98559 (D. Hawaii, July 21, 2014). As we explained in our Order, many of these cases are not particularly applicable and are distinguishable from Plaintiff's situation on several salient points.

Moreover, the question of whether there are "substantial grounds for difference of opinion" must be answered in context. That there exist different opinions in other districts and in the Fifth and Tenth Circuit Courts of Appeal does not mean that there is substantial ground for difference of opinion in the context in which this case is being litigated. The "substantial difference in opinion" required for Section 1292 certification must be read in conjunction with the requirement that this be a controlling question of law. The findings of Nevada and Hawaii district courts and the Tenth and Fifth Circuits do not control Plaintiff's case. Rather, the precedent of the Western District of Washington, and of the Ninth Circuit (if hypothetically, Plaintiff's case were certified for appeal) control. And in these jurisdictions, there is no substantial difference of opinion on the issue of whether an unexercised and general change-in-terms provision in a multi-faceted contract is sufficient, by itself to render an arbitration agreement within that contract unenforceable.

As Defendant pointed out in its briefing on the Motion to Compel Arbitration, "neither Washington courts nor the Ninth Circuit have ever held an arbitration agreement unenforceable solely because it is in a contract that allows changes." (Defendant's Reply, Dkt. No. 41 at 1.) In fact, they have found quite the opposite. To once more reiterate our December Order Compelling Arbitration:

Washington and Ninth Circuit courts have a history of enforcing contracts containing change-in-terms provisions. See e.g., Alaska Airlines, Inc. v. Carey, 395 F. Appx. 476, 479 (9th Cir. 2010) (holding that "Alaska Airline's unilateral right to modify the terms of the Mileage Plan do[es] not make the plan an illusory contract"). In Washington, a contract is illusory only if it lacks all consideration and mutuality of obligation, e.g., the promisor has no obligations with regard to any parts of the contract.
See e.g., Gress v. Conover Ins., Inc., 494 F. Appx. 772, 774 (9th Cir. 2012) ("The fact that [defendant] retained the right to unilaterally modify the contract did not render the agreement illusory, because the performance obligations remained fixed."); Quadrant Corp. v. Am. States Ins. Co., 154 Wash.2d 165, 184-85 (2005) (explaining that illusory contracts are those without any consideration). This is not the case here, where the contract between Amazon and its customers created several performance obligations for Amazon, the alleged breach of which forms the basis of this suit.

(Order Compelling Arbitration, Dkt. No. 43 at 6-7.) The Washington and Ninth Circuit cases the Court cited in our Order Compelling Arbitration are not the only cases supporting the rule that change-in-terms provisions are not independently sufficient to render an arbitration clause unenforceable. See e.g., Search v. Bank of America, N.A., 2012 WL 4514285, at *5 (W.D. Wash. Oct. 2, 2012) ("As in Rockwell, BANA's change-in-terms notice was... an invitation to enter into a new relationship governed by the modified terms. Plaintiff accepted this invitation by failing to opt out and by continuing to use [her] card.' Nothing about this process of offer and acceptance is illusory."); L.A. Fitness International LLC v. Harding, 2009 WL 4545079, at *4 (W.D. Wash. Nov. 25, 2009) (" Even if the modification clause... were to be considered unconscionable, its application is not at question here; severability would be appropriate and the remainder of the contract could stand.") (emphasis added); Riensche v. Cingular Wireless, LLC, 2006 WL 3827477, at *11 (W.D. Wash. Dec. 27, 2006) (unilateral right to change terms "does not [necessarily] render the agreement illusory or substantively unconscionable"); Duncan v. Alaska USA Federal Credit Union, Inc., 148 Wash.App. 52, 73 (2008) ("It is beyond dispute that Washington law provides that a terminable-at-will contract may be unilaterally modified.'"); Cascade Auto Glass, Inc. v. Progressive Cascade Insurance Co., 135 Wash.App. 760, 766 (2006); Govier v. North Sound Bank, 91 Wash.App. 493, 498 (1998) (employer may unilaterally amend policies in employee handbook).

At the point that there is near-complete uniformity in the Western District of Washington with regard to this issue, and at the point that this uniform position is consistent with Ninth Circuit rulings on the matter, Plaintiff has failed to satisfy the first two requirements for Section 1292 appealability.

Moreover, even were Plaintiff to satisfy these first two requirements, he could not satisfy the third. An immediate appeal will not materially advance the termination of this litigation. Instead, an interlocutory appeal of our decision would perpetuate the litigation, in direct contravention of the goals and purposes of the FAA.

Thus, Plaintiff satisfies none of the necessary conditions for granting a Section 1292 certificate of appealability.

III. CONCLUSION

For the foregoing reasons, Plaintiff's Motion (Dkt. No. 44) is DENIED and this case is to remain STAYED pursuant to any arbitration in which the parties choose to engage. Plaintiff's request for a certificate of appealability is DENIED.


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