Joseph v. Amazon.com Inc.

Background

Pro se plaintiff Dr. Rhawn Joseph sued Amazon.com, Inc. and Amazon.com Services LLC, which the opinion refers to collectively as Amazon. Joseph used Amazon’s Kindle Direct Publishing service to publish and sell books. He alleged that Amazon breached its contractual duties in April 2022 by withholding some royalty payments and falsely claiming that his bank-account information was incorrect. His claims included breach of contract, fraud, and financial elder abuse.

Amazon’s Kindle Direct Publishing terms required authors to click “Agree” during registration. The terms included an arbitration clause requiring disputes relating to the agreement or Kindle Direct Publishing to be resolved through binding arbitration rather than in court, subject to a small-claims exception. The terms also stated that arbitration would be conducted by the American Arbitration Association under its Commercial Arbitration Rules. Joseph did not dispute that he entered into the agreement.

Joseph initiated arbitration with the American Arbitration Association on July 26, 2023, but did not proceed because of a dispute about administrative fees. He then filed this action in state court, and Amazon removed it to federal court. Amazon moved to compel arbitration, and Joseph moved for summary judgment.

Analysis

The Federal Arbitration Act generally makes written arbitration agreements enforceable. The court explained that parties may also agree to let an arbitrator decide threshold questions about whether a dispute must be arbitrated. Such an agreement is called a delegation provision. It must be shown by clear and unmistakable evidence, and challenges to whether the agreement was formed remain for the court to decide.

The court held that the agreement’s incorporation of the American Arbitration Association’s Commercial Arbitration Rules clearly and unmistakably delegated questions of arbitrability to the arbitrator. The relevant rule gives the arbitrator authority to decide questions about the existence, scope, or validity of the arbitration agreement and whether a claim is arbitrable. Because Joseph did not dispute that he entered into the agreement, the court found that the parties validly delegated those questions.

Joseph raised arguments about the merits of his dispute and argued that the agreement did not cover five of his six causes of action. The court held that, because the agreement contained a valid delegation provision, those scope and enforceability questions had to be decided by the arbitrator rather than the court.

Disposition

The court granted Amazon’s motion to compel arbitration. It denied Joseph’s motion for summary judgment without prejudice. The court stayed the action until arbitration was completed and ordered Amazon to notify the court within 14 days after the arbitration ended and to submit periodic status reports while the case remained stayed.