Nicholas v. Amazon.Com Inc

[5] UNITED STATES DISTRICT COURT [6] WESTERN DISTRICT OF WASHINGTON AT SEATTLE [7] 8 ALEXANDRIA NICHOLAS, individually Case No. 2:22-cv-01616-RSM and on behalf of all others similarly situated, 9 ORDER GRANTING AND DENYING IN PART 10 Plaintiff, DEFENDANT’S MOTION TO DISMISS 11 v. 12 AMAZON.COM, INC., a Delaware Corporation, [13] Defendant. [14] I. INTRODUCTION [15] Before the Court is Defendant Amazon.com, Inc. (“Amazon”)’s Motion to Dismiss First [16] Amended Complaint pursuant to FRCP 12(b)(6). Dkt. #61. Plaintiff Alexandria Nicholas [17] (“Plaintiff”) has filed an opposition. Dkt. #66. The Court has determined it can rule on the [18] Motion without the need for oral argument. For the reasons stated below, the Court GRANTS [19] IN PART and DENIES IN PART Defendant’s Motion. [20] II. BACKGROUND [21] For purposes of this Motion to Dismiss, the Court will accept all facts stated in the First [22] Amended Complaint, Dkt. #35, as true. Unless stated otherwise, the following facts are drawn [23] from that pleading. [24] 1 Plaintiff filed a putative class action Complaint against Defendant alleging that Amazon’s “Subscribe & Save” program (“S&S”) utilizes a deceptive, unfair, and ultimately unlawful [2] interface. Dkt. #35 at 1. Specifically, Plaintiff alleges that the S&S cancellation process is [3] “overly difficult and time-consuming,” using “dark patterns” to induce customers to subscribe [4] but making the cancellation process excessively complicated through a “labyrinth of menus and [5] icons” to frustrate the process. Id. at 14. [6] As a result of the above, Plaintiff raises claims alleging violations under: (1) the Illinois [7] Automatic Contract Renewal Act (“IACRA”); (2) the Washington Consumer Protection Act [8] (“WCPA”); (3) the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”); and [9] common law claims of (4) fraud and (5) unjust enrichment. Dkt. #35 at 21, 19, 23, 25, 26. [10] III. DISCUSSION [11] A. Legal Standards [12] 1. Rule 12(b)(6) [13] In making a Rule 12(b)(6) assessment, the court accepts all facts alleged in the complaint [14] as true and makes all inferences in the light most favorable to the non-moving party. Baker v. [15] Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (internal citations omitted). [16] To survive a 12(b)(6) challenge, a complaint “must contain sufficient factual matter, accepted as [17] true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662 , 678 [18] (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However, the court is [19] not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. [20] Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). [21] The complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief [22] that is plausible on its face.” Id. at 678 . This requirement is met when the plaintiff “pleads factual [23] content that allows the court to draw the reasonable inference that the defendant is liable for the [24] 1 misconduct alleged.” Id. The complaint need not include detailed allegations, but it must have “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action [2] will not do.” Twombly, 550 U.S. at 555 . Absent facial plausibility, a plaintiff’s claims must be [3] dismissed. Id. at 570 . Lastly, a complaint must “give the defendant fair notice of what the . . . [4] claim is and the grounds upon which it rests.” Id. at 555 ; see Fed. R. Civ. P. 8(a). [5] Where a complaint is dismissed for failure to state a claim, “leave to amend should be [6] granted unless the court determines that the allegation of other facts consistent with the challenged [7] pleading could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture [8] Co., 806 F.2d 1393 , 1401 (9th Cir. 1986). [9] 2. Rule 9(b) [10] Claims sounding in fraud must be pled with particularity. See Fed. R. Civ. P. 9(b). [11] Additionally, “a plaintiff need not specifically label a cause of action as ‘fraud’; claims that are [12] ‘grounded in fraud’ or that ‘sound in fraud’ must also meet Rule 9(b) requirements.” Dkt. #61 at [13] 6 (quoting Fid. Mortg. Corp. v. Seattle Times Co. 213 F.R.D. 573, 575 (W.D. Wash. 2003)). To [14] survive a Rule 9(b) challenge, a fraud claim must include “the who, what, when, where, and how” [15] of the alleged misconduct. Hernandez v. Johnson & Johnson, No. 4:20-cv-05136-SMJ, 2021 WL 16 320312, *5 (E.D. Wash. Jan. 8. 2021); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 , [17] 1107 (9th Cir. 2003) (deeming a motion to dismiss under FRCP 9(b) “the functional equivalent” [18] of a motion to dismiss under FRCP 12(b)(6) and thus treating dismissal under both rules “in the [19] same manner”). [20] B. Analysis [21] 1. IACRA Claim [22] Defendant alleges that Plaintiff has not pled any specific facts that support her IACRA [23] violation claim, “or even put Amazon on reasonable notice of how it failed to satisfy IACRA.” [24] 1 Dkt. #61 at 13. Plaintiff alleges that Amazon violated IACRA by not clearly and conspicuously disclosing the automatic renewal terms (including cancellation) for the S&S program. Dkt. #35 [2] at 22. The IACRA that was in effect when Plaintiff allegedly enrolled in Amazon’s S&S program [3] provided in relevant portion that: [4] (a) Any person, firm, partnership, association, or corporation that sells or offers to [5] sell any products or services to a consumer pursuant to a contract, where such contract automatically renews unless the consumer cancels the contract, shall [6] disclose the automatic renewal clause clearly and conspicuously in the contract, including the cancellation procedure. [7] 815 ILCS § 601/10 (eff. Jan. 1, 2022 to Dec. 31, 2023) (emphasis added). [8] The applicable version of IACRA did not define “clear and conspicuous.” Nevertheless, [9] the Illinois legislature has since amended the statute and defined “clear and conspicuous” as [10] “larger than the surrounding text, or in contrasting type, font, or color to the surrounding text of [11] the same size, or set off from the surrounding text of the same size by symbols or other marks, in [12] a manner that clearly calls attention to the language.” 815 ILCS § 601/5 (eff. Jan. 1, 2024). This [13] definition provides a useful framework to determine what type of disclosure the Illinois legislature [14] would classify as “clear and conspicuous.” Amazon contends that, despite their vagueness, [15] Plaintiff’s allegations, in fact, establish that Amazon complied with the relevant version of [16] IACRA. This Court agrees. In Viveros v. Audible, Inc., the court considered the offer terms of [17] an Amazon Audible free trial subscription. 2023 WL 6960281 at *7-8 (W.D. Wash. 2023). The [18] specific offer language provided that “[m]embership continues until cancelled for $14.95/mo. [19] +taxes. Cancel anytime via Account Details.” Id. at *7. A blue hyperlink to Audible’s [20] “Conditions of Use” followed, which included the cancellation procedure. Id. at *8. The court [21] ultimately held that “the language included all the required clear and conspicuous disclosures [22] under [the pertinent statute], and that the cancellation policy was sufficient.” Id. at *7-8. Here, [23] the pertinent language includes the order total amount and provides that “[the] subscription [24] 1 continues until canceled. You can cancel anytime via the Your Subscribe & Save items page in Your Account,” where the words “Your Subscribe & Save” take the form of a blue hyperlink. [2] Dkt. #61 at 16. Thus, just like in Viveros, this Court finds that this language includes all the [3] required clear and conspicuous disclosures under the latest version of IACRA, and satisfies all [4] the requirements of IACRA that were in effect when Plaintiff allegedly enrolled in Amazon’s [5] S&S program. [6] Regarding the cancellation process, IACRA provides that a company must “provide a toll7 free telephone number, electronic mail address, a postal address if the seller directly bills the [8] consumer, or another cost-effective, timely, and easy-to-use mechanism for cancellation.” 815 [9] ILCS 601/10(b-5) (eff. Jan. 1, 2022 to Dec. 31, 2023) (emphasis added). Amazon argues that [10] “[the S&S cancellation] process is clear and simple.” Dkt. #61 at 25. Plaintiff alleges that the [11] cancellation process is “more difficult than is legal,” that it “litters the subscription process with [12] deceptive and misleading statements,” Dkt. #66 at 22, and that “Amazon’s user interface was [13] designed to nudge users who are seeking to cancel their subscriptions to ‘skip a delivery’ instead, [14] thereby allowing likely deliveries to resume after a brief pause.” Dkts. #35, ¶ 32, #66 at 22. [15] Plaintiff further alleges that individuals “give up before completing the cancellation process [16] because such process is unreasonably difficult to complete.” Id. at 2. The Court agrees with [17] Plaintiff that the S&S cancellation process can hardly be described as straightforward and is likely [18] to cause frustration. Accordingly, taking all reasonable inferences in light most favorable to [19] Plaintiff, the Court holds that enough facts were pled to make the inference that the S&S did not [20] provide an easy-to-use mechanism for cancellation, in violation of IACRA. [21] 2. Rule 9(b) Challenge [22] Moving on to Plaintiff’s ICFA, WCPA, and fraud claims, Defendant alleges that they “are [23] all premised on alleged misrepresentations by Amazon, and [thus] should be subject to FRCP [24] 1 Rule 9(b)’s heightened pleading standard.” Dkt. #61 at 7. The Court agrees. Plaintiff posits that Amazon “engaged in unfair or deceptive acts or practices . . . [to] intentionally and knowingly [2] [mislead] Plaintiff.” Dkt. #35 at 19-20. In fact, Plaintiff’s argument of “dark patterns” is [3] premised on the notion that Amazon’s S&S program uses “nefarious…process designs intended [4] to confuse customers.” Dkt. #61 at 8 (emphasis omitted). Nevertheless, Plaintiff fails to provide [5] any details regarding what specific elements of the S&S cancellation process were deceptive, or [6] when, where, or how she was misled by them. The only thing close to a cognizable theory of [7] harm that Plaintiff puts forth is the allegation that Amazon’s “cancel anytime” representation is [8] somehow false. But again, she fails to provide screenshots or any other kind of information, for [9] that matter, to substantiate this claim. Not only that, but it is undisputed that Plaintiff was [10] successful in cancelling her initial dog food subscription once she realized she did not want it, [11] and that she then signed up for a second subscription via the same S&S process sometime [12] thereafter. Dkt. #35, ¶¶ 39-40. Thus, the Court fails to identify the way in which Plaintiff was [13] purportedly deceived. [14] In In re Amazon Service Fee Litigation, the court considered Amazon Prime’s [15] membership process and whether it involved misrepresentation tactics. 2023 WL 8472724 at *2. [16] There, the plaintiff claimed that she had been misled into signing up for an Amazon Prime [17] membership. Notably, the plaintiff in In re Amazon failed to describe her own personal [18] experience and relied instead on “general allegations about [Amazon’s] practices,” which also [19] included arbitrary screenshots of Amazon webpages or advertisements unrelated to her personal [20] experience. Id. at *6. The court ruled that the claims did not meet Rule 9(b)’s heightened pleading [21] standards, and reasoned that the absence of “details about Plaintiff’s own experience” were fatal [22] to her fraud-based claim. Id. Here, Plaintiff similarly “suffers from a lack of details about [her] [23] own experience.” Id. Her allegations focus on products she did not purchase and a platform – [24] 1 Amazon’s mobile website – she did not utilize. Such vague allegations cannot put Amazon or the Court on notice of the basis of Plaintiff’s fraud-based claims. Accordingly, the Court holds [2] that Plaintiff’s ICFA, WCPA, and fraud claims fail to satisfy FRCP Rule 9(b). [3] 3. Unjust Enrichment [4] Defendant alleges that Plaintiff’s unjust enrichment claim must fail because she has a valid [5] contract with Amazon. Dkt. #61 at 11. In opposition, Plaintiff alleges at the time she entered [6] into the S&S transactions, she “did not – and could not – assent to the formation of a valid contract [7] due to Amazon’s use of deceptive and materially misleading user interfaces throughout its [8] attempts to blind Plaintiff . . . to their recurring [S&S] deliveries.” Dkt. #35 at 26. Although [9] Plaintiff has only provided vague allegations about her own experience with the S&S cancellation [10] process, what is clear is that she has enrolled twice in the program through Amazon’s website. [11] Id. ¶¶ 37, 40. By enrolling in the S&S program, Plaintiff consented to Amazon’s Conditions of [12] Use (“COUs”), which are a valid contract with Amazon. Courts have typically ruled that [13] consumers are bound to the terms and transactions of online agreements, referring to this process [14] as “clickwrap.” See, e.g., Wiseley v. Amazon.com, Inc. 709 F. App’x 862, 864 (9th Cir. 2017) [15] (“The notices on Amazon’s checkout and account registration pages, which alerted [the plaintiff] [16] that clicking the corresponding action button constituted agreement to the hyperlinked COU[s], [17] were in sufficient proximity to give him a ‘reasonable opportunity to understand’ that he would [18] be bound by additional terms.”); see also In re Amazon Serv. Fee Litig., 2023 WL 8472724 at [19] *3-4 (finding that plaintiff was bound by Amazon’s COUs based on purchases from Amazon’s [20] website). Moreover, insofar as Plaintiff relies on the theory that it was Amazon’s use of “dark [21] patterns” that prevented her from “assent[ing] to the formation of a valid contract,” she is [22] unsuccessful in alleging any deceptive practices to which she was personally exposed. Dkt. #35 [24] 1 at ¶ 87. Thus, she has not alleged any facts that invalidate her assenting to the contract with Amazon. Accordingly, the Court holds that Plaintiff’s claim of unjust enrichment fails. [2] IV. CONCLUSION [3] Having reviewed the relevant pleadings and the remainder of the record, the Court hereby [4] finds and ORDERS that Defendant’s Motion to Dismiss, Dkt. #61, is GRANTED IN PART and [5] DENIED IN PART. Plaintiff’s claims pursuant to the WCPA, ICFA, as well as her common law [6] claims of fraud and unjust enrichment are DISMISSED. All other claims remain. Plaintiff shall [7] have thirty (30) days to file an amended complaint. [8] DATED this 12th day of July, 2024. [10] A [11] RICARDO S. MARTINEZ 12 UNITED STATES DISTRICT JUDGE