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Law360 (June 23, 2020, 9:46 PM EDT) -- Two Amazon consumers accusing the online retail giant of illegally increasing prices for high-demand items, like face masks and disinfectants, amid the coronavirus pandemic must individually arbitrate their claims, Amazon told a California federal judge Monday.
In a motion to compel arbitration, Amazon said plaintiffs Mary McQueen and Victoria Ballinger agreed to the retailer's conditions of use when they registered their accounts in 2015 and 2017, which requires them to submit to individual arbitration for any dispute or claim related to their use of Amazon or any products sold by Amazon.
"Plaintiffs' theory that COVID-19 effectively forced them to purchase these products from Amazon.com, rendering the arbitration agreement unconscionable, fails because unconscionability is determined at the time of contracting, and both plaintiffs agreed to arbitration years before the COVID-19 crisis," Amazon said.
Amazon also argued that McQueen and Ballinger did not have to purchase the items in question from the online retailer, saying the products were widely available from other retailers.
McQueen and Ballinger filed their putative class action complaint in April, alleging that Amazon is illegally reaping the benefits of the closure of many brick-and-mortar stores in the wake of COVID-19 by increasing the prices of some high-demand items nearly 700% in some cases, which is "flagrantly unlawful" under a California law that prohibits increases of more than 10%.
For example, the price of face masks increased 500%, from less than $20 to $120, while the price of cold remedies increased 674%, from $4.65 to $35.99; and the price of black beans increased 672%, from $3.17 to $24.50, according to the suit.
McQueen said that she bought a Sally Hansen Hair Remover Kit for $6.74 on Amazon and that the price used to be $4.75. Ballinger said she bought a Mary Kay facial cleanser from Amazon for $14.47 that once had cost $9.60.
In its motion Monday, Amazon said it is an arbitrator's job to determine the women's claims, not a federal judge.
"Amazon's consumer-friendly arbitration clause, designed for speedy and efficient resolution of claims arising from customers' purchases, is fully enforceable," the retailer said.
Amazon said the plaintiffs were required to accept the retailer's conditions of use, not only when they made their accounts, but every time they bought something through Amazon. Within that policy is an arbitration clause that the plaintiffs agreed to abide by, Amazon said.
Amazon rejected the plaintiffs' argument in their complaint anticipating the arbitration agreement that the provision is rendered retroactively unconscionable by the pandemic. The company said unconscionability is gauged at the time of contracting, not at some later time.
"Plaintiffs agreed to arbitration in 2015 and 2017, years before any alleged 'duress' associated with COVID-19 arose," Amazon said.
Counsel for the parties did not immediately respond to requests for comment Tuesday evening.
The consumers are represented by Steve W. Berman, Ben M. Harrington and Benjamin J. Siegel of Hagens Berman Sobol Shapiro LLP.
Amazon is represented by Kristin A. Linsley and Rachel S. Brass of Gibson Dunn & Crutcher LLP; and Gregory L. Doll and Jamie O. Kendall of Doll Amir & Eley LLP.
The case is Mary McQueen et al. v. Amazon.com Inc., case number 4:20-cv-02782, in U.S. District Court for the Northern District of California.
--Editing by Peter Rozovsky.
For a reprint of this article, please contact reprints@law360.com.
