Ranazzi v. Amazon.com, Inc.

[Cite as Ranazzi v. Amazon.com, Inc., 2015-Ohio-4411.]

IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY

Andrew K. Ranazzi Court of Appeals No. L-14-1217

Appellant Trial Court No. CVF-14-04661

v.

Amazon.Com, Inc., etc., et al. DECISION AND JUDGMENT

Appellee Decided: October 23, 2015

*****

Andrew K. Ranazzi, pro se.

Christine E. Mayle, for appellee.

*****

PIETRYKOWSKI, J.

{¶ 1} Appellant, Andrew Ranazzi, appeals the September 23, 2014 judgment of

the Toledo Municipal Court which granted appellees Amazon.com, Inc. and Intuit

Payments, Inc.’s motion to stay the action pending arbitration. Because we find that the

court did not err, we affirm.
 {¶ 2} The undisputed facts are as follows. Appellant purchased Intuit’s 2013

Turbo Tax Deluxe program and completed his federal income taxes using the software;

the taxes were filed in March 2014. As an incentive, Intuit offered its customers through

its “TurboTax Bonus Refund Program” the option of converting part of their income tax

refund to Amazon eGift Cards, with a 10 percent bonus provided by Intuit. According to

appellant, he initially contacted Amazon to confirm that he could use the cards “to

purchase what Amazon.com sold.” Appellant then opted to convert a portion of his tax

refund and on April 9, 2014, two Amazon eGift Cards were deposited into his Amazon

account: $2100, represented his tax return funds and $210, represented the bonus sum.

{¶ 3} Immediately after the sums were added to his account, appellant attempted

to use the funds to purchase Amazon gift cards in smaller denominations. Appellant

claims that he then learned that the Intuit-sponsored Amazon eGift Cards could not be

used to purchase other Amazon gift cards. At that point, appellant attempted to rescind

the offer and was told that he could not.

{¶ 4} Appellant commenced this action on April 10, 2014, alleging violations of

the Ohio Consumer Sales Practices Act, R.C. Chapter 1345, and the Ohio Deceptive

Trade Practices Act. Appellant alleged that he was never informed of the limitations on

the use of the gift cards and that he was fraudulently refused a credit when the restrictions

were discovered.

{¶ 5} On June 13, 2014, appellees filed a motion to dismiss pursuant to Civ.R.

12(B)(6) or, alternatively, a motion to stay the proceedings pending arbitration.

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Specifically, as to the motion to stay, appellees alleged that both Amazon and Intuit had

arbitration agreements to which appellant agreed in contracting with the parties.

Appellees stated that appellant, when contracting with Intuit for the TurboTax software,

agreed to arbitrate any dispute or claim related to the services. Further, when appellant

opened an Amazon.com account he agreed to arbitrate any disputes; also, each time he

made a purchase on Amazon.com he agreed to the conditions of use. Appellees argued

that these “clickwrap” agreements (agreements where you “click through” on a computer

to assent to various terms) were valid and enforceable under law.1 Appellees contended

that the issue in dispute, whether appellant was deceived in regard to Intuit’s Amazon

eCard tax refund program, fell within the scope of the arbitration clause. In support of

the motion to stay, appellees attached the affidavits of an Intuit employee and an Amazon

employee with knowledge of their respective arbitration clauses.

{¶ 6} Appellant filed a motion to stay appellant’s motion to dismiss pending

discovery and a request to convert the motion to a Civ.R. 56 motion for summary

judgment. Appellant argued that he should be permitted to conduct discovery to

determine the merits of his claim and appellees’ defenses. Appellant further contended

that it was fundamentally unfair that appellees attached multiple exhibits and affidavits to

their motion to dismiss where the claim is based on review of the four corners of the

complaint.

1
Intuit’s license agreement is more accurately termed a scrollwrap agreement
where the consumer has the opportunity to read the terms presented in a scroll box.

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 {¶ 7} On September 23, 2014, the trial court granted appellees’ motion to stay the

matter pending arbitration. The court found that appellant, by opening the Amazon

account, agreed to the conditions of use which contained an arbitration clause. Further,

when purchasing the Intuit software, he agreed to resolve any disputes by arbitration by

agreeing to the user agreement. The court concluded that the dispute was within in the

scope of the arbitration clauses and that they were not unconscionable. This appeal

followed.

{¶ 8} Appellant now raises the following five assignments of error:

I. It was error for the trial court to grant defendants-appellees’

motion to compel arbitration and to dismiss or stay proceedings where the

arbitration provisions were contained in agreements plaintiff-appellant may

have never seen or to which agreed.

II. The trial court erred in granting defendants-appellees’ motion to

compel arbitration and to dismiss or stay proceedings where the arbitration

provisions violate public policy by prohibiting class actions thus insulating

defendants-appellees from their statutory obligations.

III. The trial court erred in granting defendants-appellees’ motion to

compel arbitration and to dismiss or stay proceedings where the arbitration

provisions were unconscionable because they were offered on a take-it-or-

leave-it basis, were one-sided in favor of defendants-appellees, and

precluded class relief.

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 IV. The trial court erred in granting defendants-appellees’ motion to

compel arbitration and to dismiss or stay proceedings where no

consideration existed for the execution of the arbitration provisions.

V. The trial court erred in granting defendants-appellees’ [sic]

where plaintiff-appellant’s claims could be decided without referring to any

contract containing the arbitration provisions.

{¶ 9} We initially note that appellate review regarding a motion to stay

proceedings pending arbitration is for an abuse of discretion. Construction Technologies,

LLC v. Southbridge Housing Partners LP, 6th Dist. Lucas No. L-06-1080, 2006-Ohio-

6630, ¶ 7. However, review of a judgment regarding the unconscionability (a question of

law) of an arbitration provision is reviewed de novo, but the trial court’s factual findings

will be accorded deference. Hussein v. Hafner & Shugarman Ents., Inc., 176 Ohio

App.3d 127, 2008-Ohio-1791, 890 N.E.2d 356, ¶ 22-23 (6th Dist.), citing Taylor Bldg.

Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12. For ease

of discussion, we will address appellant’s assignments of error out of order.

Arbitrability

{¶ 10} Arbitration is encouraged as a method of dispute resolution and a

presumption favoring arbitration arises when the claim in dispute falls within the

arbitration provision. Hussein at ¶ 24, citing Williams v. Aetna Fin. Co., 83 Ohio St.3d

464, 471, 700 N.E.2d 859 (1998). This public policy favoring arbitration is codified in

Ohio’s Arbitration Act, R.C. Chapter 2711, which provides, in relevant part:

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 If any action is brought upon any issue referable to arbitration under

an agreement in writing for arbitration, the court in which the action is

pending, upon being satisfied that the issue involved in the action is

referable to arbitration under an agreement in writing for arbitration, shall

on application of one of the parties stay the trial of the action until the

arbitration of the issue has been had in accordance with the agreement,

provided the applicant for the stay is not in default in proceeding with

arbitration. R.C. 2711.02(B).

{¶ 11} In his first assignment of error, appellant contends that he did not agree to

arbitrate with either Intuit or Amazon. Attached to appellees’ motion to stay were

affidavits from representatives of Intuit and Amazon which explained the customer

registration process. For both companies, prior to using their products or services, a

customer must affirmatively accept the licensing terms or conditions of use. Appellant

does not dispute that he clicked through the relevant screens to manifest assent; rather, he

argues that in order to get the full offer terms he would have had to click through multiple

screens to ferret out the terms.

{¶ 12} Multiple courts have held that clicking is an acceptable method to manifest

assent to the terms of an agreement. Hancock v. Am. Tel. and Tel. Co, Inc., 701 F.3d

1248, 1256 (10th Cir. 2012), citing Smallwood v. NCsoft Corp., 730 F.Supp.2d 1213,

1226 (D.Haw. 2010). See also Segal v. Amazon.com, Inc., 763 F.Supp.2d 1367 (S.D.Fla.

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2011); DeJohn v. The .TV Corp. Intern., 245 F.Supp.2d 913 (N.D.Ill. 2003); Burcham v.

Expedia, Inc., E.D. Missouri No. 4:07CV1963, 2009 WL 586513 (Mar. 6, 2009).

{¶ 13} Further, courts have upheld such agreements where the disputed terms were

contained in a hyperlink. Fteja v. Facebook, Inc., 841 F.Supp.2d 829 (S.D.N.Y. 2012).

See Nicosia v. Amazon.com, Inc., 84 F.Supp.3d 142 (E.D.N.Y. 2015) (upholding the

arbitration clause and class action waiver the court noted that, at minimum, each time the

plaintiff made a purchase on Amazon.com he was made aware of the conditions of use

and that they were subject to change). This is so even where the user has failed to

actually review the terms of use prior to manifesting assent. Fteja at 838. See Swift v.

Zynga Game Network, Inc., 805 F.Supp.2d 904, 910-912 (N.D.Cal. 2011) .

{¶ 14} Upon review of the facts of this case and the relevant case law, we find that

appellant, by clicking “I agree” on Intuit’s license agreement or by registering for an

Amazon account and placing orders, accepted the terms of appellees’ agreements,

including the arbitration provisions.

{¶ 15} Appellant alternatively contends in his fifth assignment of error, that if he

did, in fact, agree to arbitration, the dispute over the use of Amazon eCards does not fall

under the scope of the arbitration clauses. Appellant’s arbitration agreement with Intuit

provides: “Any dispute or claim relating in any way to the Intuit software or this

agreement will be resolved by binding arbitration, rather than in court.”

{¶ 16} Similarly, appellant’s agreement with Amazon provides:

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 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, rather than in

court, except that you may assert claims in small claims court if your claims

qualify. The Federal Arbitration Act and federal arbitration law apply to

this agreement.

{¶ 17} In determining whether a dispute falls within the arbitration provision a

court must first look at the language of the arbitration agreements. Alexander v. Wells

Fargo Financial Ohio 1, Inc., 122 Ohio St.3d 341, 2009-Ohio-2962, 911 N.E.2d 286, ¶ 9.

Any doubts should be construed in favor of arbitration. Hayes v. Oakridge Home, 122

Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 15, citing Ignazio v. Clear Channel

Broadcasting, Inc., 113 Ohio St.3d 276, 2007-Ohio-1947, 865 N.E.2d 18, ¶ 18.

“A proper method of analysis here is to ask if an action could be

maintained without reference to the contract or relationship at issue. If it

could, it is likely outside the scope of the arbitration agreement.” Fazio,

340 F.3d at 395. Later in that paragraph, Fazio continued: “Even real torts

can be covered by arbitration clauses ‘[i]f the allegations underlying the

claims “touch matters” covered by the [agreement].’ Genesco, Inc. v. T.

Kakiuchi & Co., Ltd., 815 F.2d 840, 846 (2d Cir.1987).” (Brackets sic.)

Fazio, id. Alexander at ¶ 24.

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 {¶ 18} The contract terms regarding the bonus gift card program are central to the

present dispute; thus, the action could not be maintained without reference to the

“contract or relationship at issue.” Accordingly, we find that the dispute is within the

scope of the arbitration agreements. Appellant’s first and fifth assignments of error are

not well-taken.

{¶ 19} Appellant’s fourth assignment of error contends that because there was no

consideration for the agreement to arbitrate, it was not enforceable. Appellees dispute

this assertion and further contend that the argument was not raised in the trial court and

should not be considered on appeal.

{¶ 20} We agree that arguments generally may not be made for the first time on

appeal. Indulging the claim, however, even a cursory review finds that it lacks merit. As

to Intuit’s license agreement, the affidavit in support of the motion to stay indicates that

appellant during the installation process of the TurboTax software was required to click

“I agree” to the license agreement. Appellant had the option of not continuing with the

installation process. As to Amazon, appellant had the option of not creating an account

or of terminating his account.

{¶ 21} Further, many courts have held that mutual promises to arbitrate is

sufficient consideration for signing an arbitration agreement. Price v. Taylor, 575

F.Supp.2d 845, 853 (N.D.Ohio 2008). See, generally, Bassett v. Electronic Arts, Inc.,

___ F.Supp.3d ___, 2015 WL 1298632 (E.D.N.Y.). Appellant’s fourth assignment of

error is not well-taken.

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 Unconscionability

{¶ 22} Appellant, in his second and third assignments of error makes arguments

relating to the unconscionability of the arbitration clauses. Appellant highlights the

argument that the prohibition against class actions violates public policy. We note that

appellant never raised the class action issue in the lower court

{¶ 23} Under Ohio law, [u]nconscionability includes both ‘“an absence of

meaningful choice on the part of one of the parties together with contract terms which are

unreasonably favorable to the other party.”’ Hayes, 122 Ohio St.3d 63, 2009-Ohio-2054,

at ¶ 20, quoting Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 383, 613 N.E.2d 183

(1993). The party asserting unconscionability of a contract bears the burden of proving

that the agreement is both procedurally and substantively unconscionable. Id. Procedural

unconscionability refers to the formation of the contract and occurs when no voluntary

meeting of the minds is possible. Porpora v. Gatliff Bldg. Co., 160 Ohio App.3d 843,

2005-Ohio-2410, 828 N.E.2d 1081, ¶ 7 (9th Dist.). To determine whether an arbitration

clause is procedurally unconscionable:

“courts consider the relative bargaining positions of the parties,

whether the terms of the provision were explained to the weaker party, and

whether the party claiming that the provision is unconscionable was

represented by counsel at the time the contract was executed.” Id.

{¶ 24} In relation to the relative bargaining positions of the parties, the following

factors must be considered:

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 “‘age, education, intelligence, business acumen and experience, * *

* who drafted the contract, * * * whether alterations in the printed terms

were possible, [and] whether there were alternative sources of supply for

the goods in question.’” Taylor, 117 Ohio St.3d 352, 2008-Ohio-938, 884

N.E.2d 12, at ¶ 44, quoting Collins v. Click Camera & Video, 86 Ohio

App.3d 826, 834, 621 N.E.2d 1294 (2d Dist.1993).

{¶ 25} In determining whether a contract is substantively unconscionable, the

focus is on the terms of the agreement and whether they are commercially reasonable.

Hayes at ¶ 33.

Factors courts have considered in evaluating whether a contract is

substantively unconscionable include the fairness of the terms, the charge

for the service rendered, the standard in the industry, and the ability to

accurately predict the extent of future liability. John R. Davis Trust at ¶ 13;

Collins v. Click Camera, 86 Ohio App.3d at 834, 621 N.E.2d 1294. No

bright-line set of factors for determining substantive unconscionability has

been adopted by this court. The factors to be considered vary with the

content of the agreement at issue. Id.

{¶ 26} Appellant relies on Eagle v. Fred Martin Motor Co., 157 Ohio App.3d 150,

2004-Ohio-829, 809 N.E.2d 1161 (9th Dist.), for his arguments regarding the

unconscionability of the arbitration clauses. In Eagle, the consumer purchased a new

vehicle from seller. Within two years and after several repair attempts, the vehicle

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stopped running. Id. at ¶ 3. Eagle was presented with paperwork disclaiming all

warranties; her signature was a condition of the seller fixing the vehicle. She refused to

sign and had to purchase a replacement vehicle. Id. at ¶ 4.

{¶ 27} Eagle commenced an action for unfair and deceptive consumer sales

practices and the seller filed a motion to stay the proceedings and compel arbitration. Id.

at ¶ 5-6. The motion was granted and Eagle appealed the decision. On appeal, the court

found that the arbitration clause was procedurally and substantively unconscionable. In

reaching its decision as to substantive unconscionability, the court first noted that the

filing cost of $750 and additional “large claim” fees were considerably higher than the

costs associated with filing a common pleas’ case. Id. at ¶ 38. They juxtaposed this fact

with Eagle’s $14,000-$21,000 yearly income and single-mother status. Id. at ¶ 45. The

court then concluded that based on these costs alone, the arbitration clause was

substantively unconscionable. Id. at ¶ 51.

{¶ 28} Turning to procedural unconscionability, the court noted that the arbitration

clause was an adhesion contract and that a “huge disparity in bargaining power” existed

between Eagle and the seller. Eagle did not even know what the term “arbitration”

meant. Further, the court concluded that the confidentiality clause and class action

proscription violated public policy. Id. at ¶ 61-74.

{¶ 29} Regarding substantive unconscionability, we note that appellant is an

attorney who is certainly capable of interpreting contract language. The contracts were

presented on a take-it-or-leave-it basis. And the materials at issue were available from

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alternate sources. Further, the arbitration clauses, unlike Eagle, lacked such onerous

monetary burdens. The Amazon clause states that Amazon will reimburse all fees and

costs for claims under $10,000 unless the arbitrator finds the claim frivolous. Further, the

clause states that Amazon will not seek attorney fees or costs unless the claim is

frivolous. Further, there is an option to proceed telephonically. The Intuit clause

contains similar terms and additionally states that it will pay the filing fees if the

consumer cannot afford to.

{¶ 30} As to whether the arbitration agreement was procedurally unconscionable

we note that the agreement was standardized and, although appellant is an attorney, there

was unequal bargaining power. However, courts have concluded that showing a one-

sided contract is not enough to establish procedural unconscionability. E.g., Vernon v.

Qwest Communications, Internatl., Inc., 925 F.Supp.2d 1185 (D.Co. 2013).

{¶ 31} Appellant has failed to maintain a viable argument that the arbitration

clauses are procedurally and substantively unconscionable. Appellant’s third assignment

of error is not well-taken.

{¶ 32} Finally, in appellant’s second assignment of error he makes a public policy

argument, citing Eagle, supra, regarding the inability to pursue a class action under the

arbitration agreement. Decided after Eagle, the United States District Court for the

Northern District of Ohio, applying Ohio law, found that a limitation of a consumer’s

legal remedies, including class actions, is not unconscionable unless it violates a

consumer’s statutory rights. Price v. Taylor, 575 F.Supp.2d 845, 854 (N.D.Ohio 2008).

13.
The court stated that “[a]n agreement does not violate a plaintiff’s rights merely because

it precludes a limited number of remedies.” Id. See AT & T Mobility LLC v. Concepcion,

563 U.S. 333, 131 S.Ct. 1740, 179 L.Ed2d 742 (2011) (the FAA preempts California law

regarding the unconscionability of class arbitration waivers).

{¶ 33} Based on the foregoing, we find that the arbitration agreements were not

violative of public policy. Appellant’s second assignment of error is not well-taken.

{¶ 34} On consideration whereof, we find that substantial justice was done the

party complaining and the judgment of the Toledo Municipal Court is affirmed. Pursuant

to App.R. 24, appellant is ordered to pay the costs of this appeal.

Judgment affirmed.

A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.

Mark L. Pietrykowski, J. _______________________________
JUDGE
Arlene Singer, J.
_______________________________
Stephen A. Yarbrough, P.J. JUDGE
CONCUR.
_______________________________
JUDGE

This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.sconet.state.oh.us/rod/newpdf/?source=6.

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