B.F. v. Amazon.com, Inc.: Minor Children of Amazon’s Alexa Purchasers Do Not Have to Arbitrate Claims that the Device Recorded Them Without Consent, Says 9th Cir.

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When Amazon customers activate their Alexa devices and purchase products using the service, those customers enter into arbitration agreements with Amazon. There is no dispute in B.F. v. Amazon.com, Inc., 9th Cir., No. 20-35359, memorandum 4/23/21 (“B.F.”) (unpublished mem. available here), that those arbitration agreements are valid between Amazon and the customers who purchased the devices; these individuals agreed to the arbitration agreement when they set up their Alexa devices. However, their children did not.

The plaintiffs in B.F. are 23 minor children who are suing Amazon through their respective parents as legal guardians. They allege that the Alexa devices in their homes recorded their confidential communications without their consent, in violation of the laws of eight states. The children did not buy and activate the Amazon accounts and Alexa services, and, as a result, they are non-signatories to the arbitration agreement.

Non-signatories are generally not bound by a contract’s arbitration clause because “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Mem. at 2. An exception is “equitable estoppel.” As the court explained, “when a person ‘knowingly exploits’ a contract containing an arbitration clause, the person can be compelled to arbitrate despite having never signed the agreement.” Id. at 3.

So, did the children “knowingly exploit” their parents’ contracts containing arbitration provisions simply by using Alexa? The answer is “No,” says the Ninth Circuit. A non-signatory does not “knowingly exploit” a contract when they bring claims that “do not arise from the contract.” Mem. at 3-4. Here, the children brought state statutory claims that do not depend on their parents’ contracts with Amazon. Put another way, Amazon would owe the children the same legal duties under the statutes that were allegedly violated, whether the contracts existed or not. Id. at 4.

Authored by:
Robert Friedl, Senior Counsel