consumerprotection

Washington Supreme Court Preview: Greenberg, et al. v. Amazon.com, Inc.

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By: Sofia Ellington

On January 18th, 2024, The Washington Supreme Court came to the University of Washington School of Law to hear oral arguments in the case of Greenberg, et al. v. Amazon.com, Inc. The Court seeks to answer a question that will substantially affect consumers: Whether the Washington Consumer Protection Act’s (WCPA) prohibition on “unfair” acts protects against price gouging.

What is the fight about?

Plaintiffs, a class of consumers led by Alvin Greenberg, are suing Amazon in federal district court to hold the company accountable for price gouging during the COVID-19 pandemic. The complaint cites price increases of up to 1000 percent on certain items such as face masks, cold remedies, toilet paper, and baking soda. In Amazon’s reply brief, they argue that price increases are not a per se unfair practice under the Washington Consumer Protection Act (WCPA) or the Federal Trade Commission Act (FTC Act).

Whether the prohibition on unfair and deceptive practices in WCPA protects against price gouging is a question of first impression that originally came before Judge Lasnik in the United States District Court in the Western District of Washington. In certifying the question to the Washington Supreme Court, Judge Lasnik explicitly acknowledged that the complex and competing policy interests at issue influenced his decision to certify instead of making that judgment himself.

What is a Certified Question?

A certified question is a formal request by one court to another for an opinion on a question of law. In this case, it is a federal court asking the Washington Supreme Court to answer a question regarding the interpretation of a state law. While the Supreme Court Justices were visiting classes at UW Law the day before the oral argument, I had the opportunity to ask Chief Justice González how the Washington Supreme Court strategizes about answering certified questions. He told our class that the Court answers certified questions in a way that does not decide the narrow controversy at hand, but instead focuses on interpreting the law for broader applications. The court will thus presumably examine the broader implications of interpreting the WCPA to prohibit price gouging into account when making a decision. That could include policy considerations like how the market will be affected, consumer well-being, and how states across the country interpret their statutes.

Amazon’s shift from forced arbitration to Washington’s choice of law provisions

Most large technology companies, including Amazon, have forced arbitration clauses and class action waivers in their terms of service (TOS). These clauses operate to prevent potential plaintiffs from pursuing their claims in court, forcing them to take disputes to a privatized off-the-record forum where they are less likely to prevail. So how did a class action dispute against Amazon end up before the Washington Supreme Court on a certified question?

Amazon sent a brief email to customers that they were dropping their forced arbitration clause and class action waiver from its TOS after receiving a coordinated 75,000 individual arbitration claims.  A single arbitration takes less time and is more cost-efficient for corporate defendants than litigating a class action—but if thousands of people file individual arbitration demands, dealing with thousands of arbitrations is more costly than defending against a single class action.

In the absence of an arbitration clause, Amazon’s TOS now includes a forum selection clause that mandates that any user consents to litigating in Washington courts, and a choice of law clause, that reads: “By using any Amazon service, you agree that applicable federal law, and the laws of the State of Washington . . . will govern these conditions of use and any dispute of any sort that might arise between you and Amazon.” That means any consumer who wants to sue Amazon must do so under the laws of Washington State, and more importantly in this case, the WCPA.

Oral Arguments 

At oral argument, counsels for both the plaintiffs and Amazon urged the court to think about opposing policy considerations. Plaintiffs emphasized that Amazon did not dispute that they engaged in price gouging after a nationwide public health emergency was declared. Those alleged “unconscionable” price increases caused substantial injury to consumers. Their argument is that price gouging, while not currently regulated under the CPA or FTC Act, is a fundamentally unfair practice that violates the spirit of the CPA. They did not tell the court that there should be a bright line rule—instead arguing cases would proceed like other antitrust claims. This would involve asking the jury to decide on a product-by-product basis what percentage price increase violates the WCPA based on expert testimony and the totality of the circumstances. The plaintiffs concluded by asking the court to find that their facts state a claim under the WCPA.

Amazon argued that in their view, the plaintiffs are asking for something unprecedented. They urged the Court to refrain from making policy decisions that are best left to the legislature to decide. They pointed out that the WCPA is based on the FTC Act, which has been construed to not cover pricing— underscoring that, if the justices rule in favor of the Plaintiffs, they would be the first court in the nation to read such an act to limit pricing. They pointed to other states that regulate pricing through acts of the legislature, not the courts, and only to regulate certain items. Moreover, they advanced an economic argument, warning that supply and demand would be negatively impacted,  throwing off market indicators that are actually helpful to consumers.  

What does this mean for Washington courts and consumers?

In 2021, the Attorney General of Washington, Bob Ferguson, called for a bill that prohibited price gouging during an emergency. Since then, the bill has passed the state Senate but failed in the House of Representatives due to disagreements about the particulars of the act. The outcome of this litigation may push the Washington legislature to act once again on this issue to protect consumers.

At oral argument, both sides had strong policy arguments that the Washington Supreme Court will have to weigh carefully in their decision. Regardless of which way it comes out, consumers around the world will be affected by the Court’s decision. Additionally, Amazon’s choice of law provision in their TOS will undoubtedly have an outsized impact on Washington courts causing a heavier Amazon-related caseload. However, Amazon could change their TOS at any point, so it will be interesting to see how long those provisions last—especially after the outcome of this litigation.

The Making of a Myth: Big Tech, Billionaires, and the Wild West

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Photo by Trace Hudson on Pexels.com

By: Sofia Ellington

When former Amazon CEO, and current billionaire, Jeff Bezos and his girlfriend Lauren Sanchez appeared on the cover of Vogue in November 2023, social media was on fire, incredulous over the cover that seemed to exaggerate the tech billionaire’s biceps. Less ablaze was discussion about the setting for the photoshoot: Bezos’s ranch in West Texas. Dressed like Hollywood cowboys, Bezos and Sanchez harkened back to imagery of American film icons such as John Wayne and Clint Eastwood. While the glitzy couple may seem to be a far cry from the national icon that has come to represent rugged individualism, personal freedom, and self reliance, I argue that the choice to exhibit Bezos as a modern cowboy reveals a salient truth about the status of billionaire tech tycoons and the businesses they champion: just like the American cowboy, the law has aided in making the myth of the genius tech billionaire. Both myths demand a harder look.  

The myth of the western cowboy plays on false myths of life on the range. The archetype of heroism and self-reliance is more accurately characterized as a life sustained by government subsidy and lack of oversight. The myth of the genius tech billionaire has captured the American imagination in much the same way as the cowboy. Distrust of government overreach and spending as well as lack of resources for life’s essential building blocks like housing, school, and healthcare leads to semi-reliance on the ultrawealthy’s philanthropic escapades and leave us in awe of their romanticized entrepreneurial genius. Behind the myth are exploitative practices that implicate anti-competitive practices and concerns over consumer exploitation. 

First, we must understand the cowboy archetype. Look no further than country music for imagery of the romanticized cowboy. In his 1993 hit, “Should’ve Been a Cowboy,” the late Toby Keith croons longingly, “Go west young man, haven’t you been told? / California’s full of whiskey, women and gold.” Drawing on the promise of manifest destiny, the cowboy archetype is full of imagery of young, brave men going West to an empty landscape full of opportunity, independence and a chance to strike it rich off the plentiful natural resources. In reality, the land in the West was never unoccupied because it had been the homeland of Native Tribe’s since time immemorial, and the seemingly endless supply of natural resources was a delicate environmental balance easily disrupted by exploitation. 

Initially, Federal laws encouraged early western homesteaders to settle by offering 160 acres of federal land for only the cost of an initial filing fee. Along with those 160 acres, ranchers and homesteaders were able to claim water rights and graze their cattle on public lands at no cost. The sense of ownership over public western lands increased, and some cattle ranchers began to erect barbed wire enclosures to keep out other competing users of the land, along with other tactics that created a hostile atmosphere that helped keep competition away. 

After a long period of little federal oversight, the increasing enclosure of public land and environmental concerns over grazing practices spurred Congress to act. In 1885 they passed the Unlawful Enclosures Act and then Taylor Grazing Act in 1934. The U.S. Supreme Court’s 1895 decision in Camfield v. United States, made clear that private landowners could not make exclusive use of public lands and resources, holding a Nevada cattle rancher had violated the Unlawful Inclosures act after he fenced off nearly 20,000 acres. Additionally, the dust bowl in the midwest warned of the environmental consequences of overgrazing. The Taylor Grazing Act purported to curb future damage to the lands through establishing grazing districts and requiring grazing fees to be paid to the Bureau of Land Management. Congress must take similar legislative action to respond to the growing tech industry to help control the power that tech companies, and their billionaires, have on the economy and their consumers. 

Like a rancher’s exploitation of public lands to the determinant of other users, big tech has been able to harvest invaluable information and record breaking profits from a resource they never had to pay for: your data. Additionally, the escapades of once worshiped tech tycoons such as Bezos, Sam Bankman-Fried, Mark Zuckerberg, Elizabeth Holmes, and Elon Musk make even the biggest sycophants take pause.

In addition to the criminal proceedings some tech entrepreneurs are facing, the big tech business model is going through an antitrust reckoning thanks to the Federal Trade Commission (FTC) launching lawsuits against Amazon, Google, and Apple, to name a few, for alleged tactics that disadvantaged their rivals leading to illegal monopolies that hurt consumers. Policy on emerging technology has long prioritized the economic and social benefits of a connected world. That has left guidance on how to hold tech companies and their billionaires accountable for how they exploit user data, like early rangeland policies, severely lacking. 

Many of the provisions in the U.S. data privacy framework only minimally restrict businesses and allow for the maintenance of the status quo. Unlike Europe’s comprehensive privacy law, General Data Protection Regulation (GDPR), the United States only has a conglomeration of laws that target specific types of data. For example, the Health Insurance Portability and Accountability Act (HIPAA) does not protect your private health information broadly, it only protects communication between you and your health care provider, or other similar “covered entities.” Additionally, the Gramm-Leach-Bliley Act (GLBA) requires that financial services like loan or investment service explain how they share data and requires an opt out option, but does not restrict how the data is used. The FTC is also empowered to go after companies that violate their own privacy policy by, for example, deceiving users as to the protection their products offer. Other federal laws such as the Fair Credit Reporting Act, The Family Education Rights and Privacy Act, and the Electronic Communications Privacy Act help to fill in the universe of federal U.S. data privacy. Your state’s laws may also offer additional protections. 

In addition to frustration with a lack of coordinated data protections that tech companies regularly exploit, public blowback on lack of taxes on the ultra-wealthy and reports that billionaires became richer during the pandemic has invigorated popular distaste for billionaires and an interest in holding their companies accountable. A slew of recent lawsuits have aimed at section 230 of the Communications Decency Act, which immunizes tech companies from liability related to content posted by their users. The U.S. Supreme court however, in both Twitter, Inc. v. Taamneh and Gonzalez v. Google, have balked at holding the tech giants liable when their algorithms promote problematic content, allegedly “aiding and abetting” terrorism.  Given the intense scrutiny that billionaires and big tech have been under recently, it is no surprise that Bezos tried to invoke the beloved American cowboy fantasies of freedom from federal oversight, independence, and self-reliance on the cover of Vogue. The irony is that by invoking the myth of the cowboy, Bezos’ cosplay underscored the need for more government oversight and regulation. Just as the practices of fencing off public land and overgrazing lead to more government oversight of ranch life, public frustration with the exploits of big tech are coming to a tipping point which suggest that a breakthrough is imminent. Just last month the FTC moved to ban data brokers from selling geolocation information for “sensitive data locations” such as visits to correctional facilities or reproductive health clinics. While big tech has had the tendency to divide and isolate, it has also provided the tools for a more connected public that has the potential to collaborate in order to protect against the disastrous consequences of unchecked exploitation of public resources.