Li v. Amazon.com Services LLC

Background

Eric Li and Antia Medal filed a proposed class action against Amazon.com Services LLC. They alleged that they purchased products from Amazon.com that were illegal drugs marketed as therapeutic dietary supplements. According to the allegations described in the opinion, they believed the products had therapeutic value, had been reviewed or approved by the Food and Drug Administration, and were lawfully sold. They claimed that Amazon’s representations, product labels, marketing, and omissions misled them, causing them to pay more than they otherwise would have and exposing them to a risk of serious bodily injury.

The complaint asserted eight claims: negligent products liability; strict products liability for design and manufacturing defects; strict products liability for failure to warn; breach of the implied warranty under California Commercial Code section 2314; unlawful conduct under California Business and Professions Code section 17200; unfair and fraudulent conduct under that statute; violation of the California Consumers Legal Remedies Act; and false advertising under California Business and Professions Code section 17500.

Amazon moved under 28 U.S.C. section 1404(a) to transfer the case to the Western District of Washington. Amazon relied on forum-selection and choice-of-law provisions in its conditions of use. The forum-selection provision stated that disputes relating to use of an Amazon service would be decided exclusively in state or federal courts in King County, Washington. The choice-of-law provision stated that federal law and Washington law would govern the conditions of use and disputes with Amazon.

Judicial Notice

The plaintiffs asked the court to take judicial notice of several documents, including Federal Trade Commission materials, news articles, a government report, and studies concerning dietary supplements and products sold on Amazon. The court took judicial notice only of the existence of those documents, not the truth of disputed facts stated in them.

Enforceability of the Forum-Selection Clause

The court explained that section 1404(a) permits transfer for the convenience of the parties and witnesses and in the interest of justice. When a valid forum-selection clause applies, it generally receives controlling weight except in exceptional circumstances. The party seeking to avoid the clause bears a heavy burden to show that it is unenforceable.

The plaintiffs argued that enforcing the forum-selection clause together with the Washington choice-of-law provision would violate the California Consumers Legal Remedies Act’s anti-waiver provision and California public policy. They also argued that Amazon had not shown what notice they received at the time of each purchase or that the provisions could apply retroactively.

The court considered prior decisions involving forum-selection clauses and California consumer claims, including decisions addressing whether transferring a case could effectively waive non-waivable rights under the Consumers Legal Remedies Act. The court found those decisions distinguishable or persuasive only to a limited extent because Amazon’s clause allowed litigation in both state and federal courts in Washington, rather than limiting plaintiffs to a forum without a class-action mechanism.

The court found persuasive the reasoning that a court may consider a forum-selection clause together with a choice-of-law clause. But it held that the plaintiffs had not carried their burden to show that a Washington court would likely refuse to enforce their non-waivable California consumer rights. The plaintiffs had asserted, without supporting authority, that a Washington court would probably enforce the conditions of use and apply Washington law. The court found that assertion insufficient and concluded that the plaintiffs had not shown an exceptional circumstance justifying refusal to enforce the forum-selection clause.

Purchases Before May 3, 2021

The conditions of use containing the forum-selection clause had been in effect since May 3, 2021. The plaintiffs identified purchases made before that date, including purchases on June 14, 2019, June 9, 2020, and November 2020. They argued that Amazon had not shown what notice they received at the time of those purchases and had not cited authority supporting retroactive application of the revised venue and choice-of-law provisions.

The court noted that, since May 31, 2021, Medal had placed 237 orders and Li had placed 170 orders. For those orders, the checkout page required the user to click a “Place your order” button accompanied by text stating that placing the order meant agreeing to Amazon’s privacy notice and conditions of use. The court stated that courts had repeatedly found this layout sufficient to provide constructive notice of Amazon’s conditions of use.

Based on those purchases and the plaintiffs’ lack of dispute that they had notice of the conditions of use from May 3, 2021 onward, the court enforced the forum-selection clause. It did not decide whether the clause applied to the three purchases made before May 3, 2021.

Disposition

Judge Raceli Martinez-Olguin granted Amazon’s motion to transfer. The court ordered that the case be transferred to the United States District Court for the Western District of Washington. The ruling concerned venue and did not resolve the underlying product-liability, warranty, consumer-protection, or false-advertising claims.