Stephanie Difederico and Jameson Edmond Casey v. Amazon.Com, Inc., and others

At a glance

Parties

Stephanie Difederico and Jameson Edmond Casey (proposed class representatives) v. Amazon.com, Inc., Amazon.com.ca, Inc., Amazon.com Services LLC, Amazon Services International, Inc. and Amazon Services Contracts, Inc.

Case no.

Federal Court of Canada, Docket T-445-20; 2022 FC 1256

Court

Federal Court of Canada (Toronto), Justice Angela Furlanetto

Forum and rules

Motion to stay a proposed class action under s. 50(1)(b) of the Federal Courts Act and Article II(3) of the New York Convention, as implemented by the United Nations Foreign Arbitral Awards Convention Act (UNFAACA)

Treaty

New York Convention 1958 (Articles I(1), I(3), II(1), II(3)); arbitration clause in the Amazon.ca Conditions of Use

Sector

E-commerce; online retail; competition law

Outcome

Ms. Difederico's claims relating to her Amazon.ca purchases were stayed in favour of arbitration (6 September 2022).

Amount

No damages were decided. Costs were left to written submissions, due within 30 days.

The dispute

Stephanie Difederico, a consumer in Windsor, Ontario, filed a proposed class action against Amazon on 1 April 2020. She alleged that a competitive pricing provision in effect from 2010 to March 2019, and a later fair pricing policy, were criminal price fixing contrary to section 45 of the Competition Act. Amazon.ca's Conditions of Use, which customers accept when they open an account and with each order, require binding individual arbitration and waive class actions. They also choose the U.S. Federal Arbitration Act and Washington law. Amazon moved to stay Ms. Difederico's claim as it related to her more than 285 Amazon.ca purchases. She argued that the UNFAACA did not apply because her relationship with Amazon was a consumer one. She also argued that she had no adequate notice of the clause, that the clause conflicted with Amazon.com's amended terms and had become optional under the 2022 amendments, that it denied her access to a Competition Act remedy and to justice because of cost, and that it was unconscionable.

Key holdings

1. The UNFAACA applies. Ms. Difederico is a consumer, but the conduct she alleges is agreements between Amazon and third-party sellers on pricing. That conduct is uniquely commercial in character, so the dispute arises out of a commercial legal relationship within s. 4(1) of the UNFAACA and Article I(3) of the Convention. ¶¶ 63–67
2. A binding arbitration agreement exists. The click-through Conditions of Use were hyperlinked, and the clause appeared under a "DISPUTES" heading in bold rather than fine print, which gave adequate notice; Tilden was distinguished. The Amazon.com terms are a separate contract and do not make the Amazon.ca clause irreconcilable. The 2022 amendment only states existing law and does not make arbitration optional. ¶¶ 74–91
3. The claim arguably falls within the clause. The clause covers any dispute relating in any way to the use of Amazon.ca Services or to products sold through them, which includes the Competition Act claim on Amazon.ca purchases. ¶¶ 92–95
4. The Uber v Heller exception to competence-competence is not met. Whether an arbitrator applying U.S. law could award Competition Act damages, or relief under the FTAIA's domestic effects exception, raises contested expert issues of foreign law. Those issues are for the arbitrator. A mere possibility of denial of access to justice is not enough; a real prospect must be clear on the record. ¶¶ 109–116
5. The cost of arbitration does not bar access. The up-front fee is USD 200 and is refundable for claims under $10,000, and small claims court remains available. Any barrier comes from the nature of the claim, not from the clause. The Competition Act does not prohibit arbitration clauses or class action waivers. ¶¶ 117–121
6. The clauses are not unconscionable. The goods sold on Amazon are not important elements of everyday life that make the plaintiff dependent or vulnerable, and the bargain was not improvident when it was made. The court has no residual discretion to refuse referral, and the stay is granted. ¶¶ 122–129; Order
7. Preliminary requests refused. Ms. Difederico asked to defer the motion because Amazon.com had removed its arbitration clause; the court held this was a collateral attack on earlier orders. A further round of evidence on the March 2022 amendments was not required for procedural fairness. ¶¶ 25–40

Procedural history

1. 1 April 2020Ms. Difederico files the proposed class action. It is amended on 30 September 2020 to add Jameson Edmond Casey as a representative plaintiff.
2. 6 April 2021Amazon files its motion to stay in favour of arbitration. The motion is later narrowed (amended notice of 28 June 2021) to Amazon.ca purchases.
3. 13 April 2021Sequencing Order: the stay motion is to be heard before certification.
4. 13 August 2021The plaintiff's motion to vary the Sequencing Order is dismissed. That order is under appeal.
5. 3 November 2021The Federal Court of Appeal dismisses the plaintiff's motion to stay the Sequencing Order and the Motion to Vary Order pending appeal (2021 FCA 214).
6. 3 February 2022First hearing of the stay motion, by videoconference.
7. 30 March 2022Amazon.ca amends its dispute resolution and choice of law clauses.
8. 29 July 2022Further hearing on the effect of the amendments.
9. 6 September 2022Order and Reasons (2022 FC 1256): the claims on Amazon.ca purchases are stayed in favour of arbitration.

Tribunal, counsel and experts

Decided by

• Angela Furlanetto Judge, Federal Court of Canada

For the claimant

Orr Taylor LLP · Strossberg Saggo Sutts LLP · David R. Wingfield

For the respondent

Borden Ladner Gervais LLP

Experts

George A. Bermann (respondent) · Vaughn R. Walker (respondent) · Lea Brilmayer (claimant) · Eric A. Posner (claimant)

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Keywords

• Amazon
• Amazon.ca
• stay in favour of arbitration
• New York Convention Article II(3)
• UNFAACA
• commercial relationship
• consumer arbitration
• class action waiver
• Competition Act section 45
• price fixing
• competence-competence
• Uber v Heller
• Dell v Union des consommateurs
• unconscionability
• click-through contract
• choice of law
• FTAIA
• e-commerce

Summary generated with AI from the published documents — refer to the award for the authoritative text.