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An effort to use Amazon's arbitration provision to dispense with class claims against the maker of a digital home video system, which sold the product on Amazon but wasn't party to the contract, has failed.

Though the manufacturer prevailed in part on other grounds, U.S. District Judge Freda Wolfson of the District of New Jersey said in Shapiro v. Logitech that “accepting Defendant's reading of the Conditions of Use could have serious, wide-ranging, and unintended implications.”

Judge Freda Wolfson. Photo by Carmen Natale

“In fact, if accepted, Defendant's interpretation, here, would go further than even the scenarios envisioned” by courts in similar cases, Wolfson wrote in the Jan. 31 decision.

“Taking Defendant's position to its logical conclusion would mean that any person or company with any connection whatsoever to the transaction could demand arbitration for any claim tangentially related to the transaction,” she said, adding that “a private mail delivery service could demand arbitration via Amazon's Conditions of Use if its delivery man committed a tort while delivering an Amazon package.”

According to the decision, named plaintiff Ed Shapiro purchased a digital home video surveillance system made by defendant Logitech Inc. through Amazon. His suit alleges that the system, ultimately discontinued, malfunctioned in various ways, and Logitech didn't sufficiently respond to consumer complaints. The suit brought consumer fraud and other claims, and sought certification of a nationwide class.

California-based Logitech moved to compel arbitration of the claims based on a provision in Amazon's conditions of use agreement, which Shapiro executed. It provided that any “dispute or claim relating in any way to your use of any Amazon Service, or to any products or services sold or distributed by Amazon or through Amazon.com will be resolved by binding arbitration.” Logitech contended that the provision applied to it because the language didn't limit the disputes only to those involving Amazon only, while Shapiro argued that sellers who weren't party to the agreement couldn't benefit from it.

Wolfson, in denying the motion, said the provision's language is broad but “does not clearly and unambiguously convey that the contracting parties—Plaintiff and Amazon—intended that the benefit of arbitration should be conferred to third-parties, like Logitech, who sell their products through the website.”

She acknowledged ambiguity in the language, but said, “At their outset, the Conditions of Use state that Amazon provides its 'Amazon Services' to 'you' (the customer) 'subject to the following conditions.'” And “Reading the contract as whole, then 'any dispute,' refers to any dispute between Amazon and the customer,” she said.

That's “the same conclusion reached,” Wolfson said, in a similar decision from 2017, also involving Logitech and the Amazon contract, from the Northern District of Illinois: Anderson v. Logitech. She also pointed to Main v. Gateway Genomics, a 2016 decision from the Southern District of California.

Wolfson did grant Logitech's partial motion to dismiss, dismissing “all claims, besides those brought by Plaintiff individually and on behalf of a putative class of New Jersey residents under New Jersey law.” Shapiro had sought to bring claims on behalf of a nationwide class under California law, though Wolfson found New Jersey law applicable in the case.

William Pinilis of Pinilis Halpern in Morristown, for Shapiro, didn't return a call. Neither did Suna Lee of Wilson Elser Moskowitz Edelman & Dicker in Florham Park, for Logitech.