Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Forum-selection clause in Amazon agreements requires transfer of author’s suit, (Sep 11, 2013)

By Jeffrey May, J.D.

An action brought by an author/book publisher against Amazon.com, Inc., and company founder Jeff Bezos, alleging antitrust violations, fraud, defamation/slander/trade libel, and breach of contract, has been transferred to the federal district court for the Western District of Washington by the federal district court in San Jose, California (Joseph v. Amazon.com, Inc., September 9, 2013, Lloyd, H.).

The court granted the defendants’ motion to enforce the forum-selection clauses contained in three online agreements entered into between the plaintiff and Amazon that required litigation to be conducted in a federal or state court in Washington State’s King County, which is where Amazon is based.

The plaintiff, even though he was proceeding pro se, brought the suit on behalf of a putative class “of all [print on demand] authors, publishers and publishing companies in the United States who have had books listed for sale in the Amazon Bookstore” since February 2008. According to the plaintiff, Amazon, which prints books using its own print on demand (POD) technology and its own POD printing house, used unfair business practices to coerce authors/publishers to print and publish only with Amazon, under programs that impose onerous conditions or obligations on the authors/publishers and place them at an economic disadvantage. According to the plaintiff, Amazon’s requirement that its members use Amazon’s POD company in order to sell their books on the online marketplace amounted to an unlawful tying arrangement.

Each of the plaintiff’s claims flowed from his dissatisfaction with Amazon’s alleged business practices and related in some way to the rights and duties set out in the plaintiff’s various agreements with Amazon, the court explained. The court rejected the plaintiff’s assertions that antitrust and defamation/slander/libel claims had nothing to do with the agreements in question and that the forum selection clauses at issue therefore did not apply.

The antitrust claim would involve interpretation of the Amazon Advantage program’s agreement and the performance requirements mandated by its terms, the court concluded. The Amazon Advantage program allegedly required members to sell their books to Amazon at a significant discount and at great expense to the authors/publishers, with the result that they were forced to sell their books at a loss or for minimum profit.

The crux of the antitrust claim was that Amazon allegedly foisted upon authors/publishers burdensome and economically disadvantageous terms of that program, the court explained. Moreover, the Amazon Advantage forum-selection clause broadly applied not only to disputes arising out of the agreement, but also to “any transactions or activities under this Agreement or your relationship with us ….”

The related claim for “Libel, Defamation, Slander, Trade Libel” also was similarly connected to the rights and duties set out in the Advantage agreement, according to the court. The plaintiff alleged that Amazon deleted positive reviews about plaintiff and his books. The author was allegedly warned that if he did not use Amazon’s printing services under the Advantage program that he would suffer “economic reprisal” and Amazon would take steps to harm the sales of his books. This alleged conduct also “goes to the heart” of the plaintiff’s antitrust claim, it was alleged.

The plaintiff suggested that the Amazon Advantage agreement was irrelevant because he had not sold any of the books at issue through the Advantage program. However, the court rejected the plaintiff’s assertion because the plaintiff had established his Advantage account in 2000 and did not dispute that he entered into the Advantage agreement.

Even though it might be a hardship for the plaintiff to litigate in Washington, the plaintiff did not show that the forum selection-clauses were unreasonable. Therefore, the clauses were enforced.

The case is No. C12-06256 HRL.

Attorneys: Roderick Manley Thompson (Farella Braun & Martel LLP) for Amazon.Com, Inc.

Companies: Amazon.Com, Inc.

Cases: Antitrust CaliforniaNews