[00:00:00] Speaker 02:
Clerk, are we ready on the last case on the calendar?

[00:00:03] Speaker 02:
All right, then the final case we're gonna hear today is Griffith v. Amazon.

[00:00:41] Speaker 02:
All right, Council, you have 15 minutes aside, and whenever you're ready, I think your friends are still getting seated there, so if you wanted to wait a little bit.

[00:00:54] Speaker 04:
All right, when you're ready, Council.

[00:01:10] Speaker 04:
Thank you, your honor.

[00:01:11] Speaker 04:
May it please the court.

[00:01:12] Speaker 04:
My name is Adam Berger.

[00:01:13] Speaker 02:
If you could try to perhaps move the mics a little closer to you, if that's possible.

[00:01:20] Speaker 02:
Great.

[00:01:20] Speaker 02:
Thank you.

[00:01:22] Speaker 04:
My name is Adam Berger, and I represent the plaintiff, Deena Griffith, in this appeal.

[00:01:26] Speaker 04:
I'd like to reserve five minutes of my time for rebuttal.

[00:01:30] Speaker 04:
The question on this appeal is whether the district court erred in dismissing plaintiff's complaint without any opportunity for discovery, where plaintiff

[00:01:39] Speaker 04:
plausibly alleged violations of the Washington Consumer Protection Act or CPA, breach of contract, and breach of the duty of good faith and fair dealing.

[00:01:50] Speaker 04:
Just a very brief factual background, as alleged in the complaint in early to mid 2021, Plaintiff Griffith saw online ads promising free delivery of Whole Foods groceries with an Amazon Prime membership.

[00:02:06] Speaker 04:
Whole Foods was acquired a couple of years prior by Amazon was an Amazon subsidiary.

[00:02:13] Speaker 04:
Based on this promise, Plaintiff Griffith was one of many consumers who were drawn to this deal.

[00:02:21] Speaker 04:
And in June 2021, she signed up and paid for an annual prime membership.

[00:02:28] Speaker 03:
Did she agree to the shrink wrap?

[00:02:31] Speaker 04:
There's no indication in the record that she ever read the terms and conditions.

[00:02:36] Speaker 03:
That's not my question.

[00:02:37] Speaker 03:
Did she check the box that said I agreed to the terms and conditions?

[00:02:42] Speaker 04:
I'm not certain.

[00:02:44] Speaker 04:
There's nothing in the record about exactly how the terms and conditions are agreed to.

[00:02:49] Speaker 04:
But, you know, beyond the terms and conditions, the first claim under the Washington Consumer Protection Act here is a deceptive advertising claim.

[00:03:01] Speaker 01:
That it's basically classic bait and switch claim that they advertised Free delivery from whole foods at the time at the time she initially signed up that was true was it not?

[00:03:15] Speaker 04:
Well, we don't know when they stopped you at the time she saw the ads and

[00:03:21] Speaker 04:
It was true.

[00:03:22] Speaker 04:
And in June 2021, it was true.

[00:03:24] Speaker 01:
And the terms and conditions that Judge Hawkins was referring to say from time to time, Amazon may choose in its sole discretion to add or remove prime membership benefits.

[00:03:41] Speaker 01:
And presumably she would not have been allowed to sign up without checking the box on terms and conditions, plus that sort of common knowledge, isn't it, that benefits come and go with time?

[00:03:56] Speaker 04:
Well, I don't think it's common knowledge when you sign up for an annual contract based on specific promises about

[00:04:02] Speaker 01:
And based on this, that says we get to decide whether we keep, delete, change, add benefits for your prime membership.

[00:04:14] Speaker 04:
I think there are several levels of response that I would like to give to that that track the four claims in the case.

[00:04:22] Speaker 04:
The deceptive CPA claim, the unfair CPA claim, the breach of contract claim, and the good faith and fair dealing claim.

[00:04:30] Speaker 04:
First of all, on the deceptive advertising claim, the terms and conditions, there is nothing in the ad that indicates to people that this is a conditional or qualified

[00:04:44] Speaker 04:
And again, I don't think when consumers say, see an ad that says, with Amazon Prime membership, you will get free Whole Foods grocery delivery, think this is something that could be yanked at any time.

[00:05:00] Speaker 01:
Unless they read the terms and conditions.

[00:05:03] Speaker 04:
And I would direct the court or ask the court to read the Keithley versus intelligence case on that which sort of goes Specifically to this point and has a passage that was not quoted in our brief although the case is cited in our brief That talks about the fact that you know the FTC is as recognized in the courts of recognized consumers often don't read these things unless there is an

[00:05:26] Speaker 04:
an indication to them that they should read.

[00:05:29] Speaker 02:
Council, I'm right that a consumer paying attention to their billings, the most they would actually be out of pocket is $10.

[00:05:43] Speaker 04:
Yes, if they recognize.

[00:05:45] Speaker 02:
I mean, if they saw they'd been billed, once they saw that they were billed, they would know it's not free anymore.

[00:05:52] Speaker 04:
That is correct.

[00:05:53] Speaker 02:
Even if they hadn't seen anything else.

[00:05:58] Speaker 04:
That is correct.

[00:05:59] Speaker 04:
But that disclosure comes too late when they've already signed up and paid.

[00:06:05] Speaker 01:
Let me just clarify.

[00:06:07] Speaker 01:
When they go ahead and order the groceries, it's clearly shown

[00:06:13] Speaker 01:
Delivery fee is is there so?

[00:06:18] Speaker 04:
Wouldn't that even before the time of the billing have told someone ah they're going to charge me here I assumed what judge Bennett was asking for asking about in terms of the billing was was during that process and the complaint does allege that the disclosure of the delivery fee even during the ordering process and

[00:06:38] Speaker 04:
is surreptitious because of the placement size font.

[00:06:41] Speaker 02:
But even with that, again, the most you're out is $10 before you know that it's not free anymore.

[00:06:48] Speaker 04:
Assuming you recognize it during that first transaction.

[00:06:51] Speaker 04:
At some point.

[00:06:51] Speaker 04:
Yes, Your Honor.

[00:06:52] Speaker 04:
But by then, you have already paid the $139 in this case for the annual membership, and there is no refund or recourse, practical recourse

[00:07:01] Speaker 04:
for a consumer to get that money back at that point, even though they have lost a service that was specifically promoted and promised.

[00:07:10] Speaker 04:
Amazon says, well, look, you can cancel a membership at any time.

[00:07:14] Speaker 04:
But canceling the membership without getting any refund, which is what the terms and conditions provide, is no real recourse.

[00:07:21] Speaker 04:
Then you've given up.

[00:07:22] Speaker 01:
Does it matter here?

[00:07:23] Speaker 01:
If I misunderstand the facts, please correct me.

[00:07:27] Speaker 01:
But does it matter here, as I understand it, that your client re-upped the prime membership even after learning that the $9.95 benefit for Whole Foods deliveries was no longer in force?

[00:07:45] Speaker 04:
Respectfully she failed to cancel it in time before it automatically renewed as opposed to deliberately re-upping but yes, she failed to cancel it at the next at the very next annual opportunity before the second renewal she did cancel it and the complaint specifically says she canceled it because of

[00:08:09] Speaker 04:
because of the termination of this service and that she would rejoin if this free delivery were restored.

[00:08:20] Speaker 04:
So what we don't know about the ads is when Amazon, thinking about the prior consumer protection places that have been here today, when Amazon stopped using the ads and when it started contemplating

[00:08:40] Speaker 04:
termination of this service.

[00:08:43] Speaker 04:
We do know it was just a mere few months after she saw the ads and signed up Ms.

[00:08:48] Speaker 04:
Griffith.

[00:08:49] Speaker 04:
And we know or can reasonably assume that a huge corporation like Amazon doesn't make these decisions overnight.

[00:08:56] Speaker 04:
It has to go through layers of consideration decision-making before deciding to terminate this service.

[00:09:03] Speaker 04:
And that's where Discovery, to determine whether the ads were

[00:09:10] Speaker 04:
were truthful when made or whether they had the capacity to mislead a reasonable consumer when made would be in order because even if on the day that Ms.

[00:09:23] Speaker 04:
Griffith signed up or the day she saw the ad, they were still offering the free delivery.

[00:09:28] Speaker 01:
Council, again, I may be misunderstanding, but I thought that your client actually obtained more than one free grocery delivery.

[00:09:37] Speaker 01:
So why is it in question whether the ad was truthful when she signed up if she actually received the precise benefit she's claiming she was supposed to receive?

[00:09:49] Speaker 04:
Because if they were already considering at the time or had decided at the time

[00:09:54] Speaker 04:
to terminate the service at some point in the next few months.

[00:09:59] Speaker 04:
That would have the capacity to mislead a reasonable consumer into believing they were signing up for an annual membership that would continue this benefit when Amazon knew it was going to be terminating the benefit.

[00:10:13] Speaker 04:
Forever or just one year?

[00:10:14] Speaker 04:
Just one year.

[00:10:20] Speaker 04:
And furthermore, there's an unfairness claim under the CPA, which is basically inducing consumers to sign up for an annual membership with specific promise of a valuable service, and then unilaterally terminating that service without providing any refund or recourse.

[00:10:41] Speaker 04:
It's plausible to allege that is unfair under the broad standards described in Greenberg versus Amazon.

[00:10:48] Speaker 04:
where the court said we liberally construe and flexibly construe the definition of unfair under the CPA.

[00:10:57] Speaker 04:
Plaintiff needs only to show that the defendant's conduct is in violation of public interest and specifically rejects the notion that the substantial interest test under the FTCA is the only, substantial injury test rather,

[00:11:14] Speaker 04:
the only means of satisfying the unfair prong I'd like to turn briefly just briefly on the breach of contract claim there's no dispute here for purposes of this appeal that the contract was not an integrated contract therefore terms could be added to the terms and conditions and conditions of use and in fact the conditions of use specifically say that

[00:11:40] Speaker 04:
that Amazon makes no representations as to the operation of the services unless otherwise specified in writing.

[00:11:48] Speaker 04:
And the claim is that these specific ads are something specified in writing about a service that would be provided.

[00:11:56] Speaker 04:
And because of that, adding that term doesn't contradict any other term in the contract.

[00:12:03] Speaker 04:
And then just turning briefly to the good faith and fair dealing claim, which I think is the final response to this notion or to this point that Amazon under the terms and conditions reserves discretion.

[00:12:19] Speaker 04:
to terminate or change service at any time.

[00:12:22] Speaker 04:
First of all, we're not talking about just changing the service here.

[00:12:25] Speaker 04:
If you accept the integration argument, they're breaching the contract.

[00:12:29] Speaker 04:
But even beyond that, what Rector from the Washington Supreme Court says is the duty of good faith and fair dealing arises when the contract gives one party discretionary authority.

[00:12:40] Speaker 04:
That's exactly the language, discretion, that's used in the terms and conditions.

[00:12:45] Speaker 04:
Whether Amazon is exercising that discretion reasonably is a question of fact that can't be decided as a matter of law.

[00:12:54] Speaker 04:
Whether it abused its discretion, whether it evaded the spirit of the bargain with consumers, or whether it was willfully rendering imperfect performance by terminating this service.

[00:13:06] Speaker 04:
Those are all plausible allegations of violations of the good faith and fair dealing duty that's given rise to by the discretion that Amazon retained under the contract to vary benefits.

[00:13:23] Speaker 04:
If there are no further questions, I'd like to reserve my remaining time.

[00:13:27] Speaker 02:
All right, thank you.

[00:13:28] Speaker 04:
Thank you.

[00:13:40] Speaker 00:
See if I can adjust the podium here.

[00:13:47] Speaker 00:
Can you hear me okay?

[00:13:48] Speaker 00:
Yes, thank you.

[00:13:49] Speaker 00:
Thank you.

[00:13:50] Speaker 00:
Good morning, Your Honors.

[00:13:51] Speaker 00:
Brian Buckley with Fenwick and West on behalf of the defendant and appellee, Amazon.

[00:13:57] Speaker 00:
I'd like to start by addressing one very specific point that Judge Hawkins brought up, and that's about the contract.

[00:14:02] Speaker 00:
There is no dispute here that the plaintiff agreed to the prime terms.

[00:14:06] Speaker 00:
She doesn't allege that she didn't, she doesn't allege that she doesn't remember reading them, and she's suing to enforce them.

[00:14:12] Speaker 00:
So there's never been any dispute that the prime terms are the operative contract.

[00:14:16] Speaker 00:
There's potentially some dispute about what is integrated or not into those terms, but the contract is the prime terms.

[00:14:24] Speaker 00:
I want to address a number of things that Mr. Berger brought up, but with your permission, unless there's something specific you'd like me to hit first, I'd like to address a couple of threshold issues that I think permeate all of the plaintiff's claims and arguments.

[00:14:37] Speaker 00:
in her complaint, in her briefing, you got a flavor of it in Mr. Berger's argument, all of it is sort of suffused with this outrage that somehow Amazon is acting unfairly and it's engaged in bait and switch advertising and it's cheating its customers.

[00:14:53] Speaker 00:
I urge you to reject that framing.

[00:14:56] Speaker 00:
The prime membership is the best deal around.

[00:14:59] Speaker 00:
There's literally nothing like it.

[00:15:00] Speaker 00:
For $139 a year, not a month, a year, you get all of the enhanced shipping benefits, millions of items that can be at your house in two hours, millions more that can be in your house the next day, all for free.

[00:15:14] Speaker 00:
You get complete access to Prime Video, all the movies, all the TV shows, all the original content, sports, and more.

[00:15:21] Speaker 00:
You get access to Amazon Music, which is effectively an infinite catalog of music.

[00:15:26] Speaker 00:
I've never found a single song that I want to listen to that's not on Amazon Music.

[00:15:30] Speaker 00:
You get free Kindle books and Audible books.

[00:15:34] Speaker 00:
You get exclusive deals and discounts on things, including on prescriptions.

[00:15:38] Speaker 00:
You get a free membership to Grubhub, which by itself is a total value of $120, almost the same value as the prime fee.

[00:15:48] Speaker 02:
I do think one of your friend's arguments is that under Washington law, where a party to a contract reserves a discretionary right to do certain acts, that there is an obligation to do that in good faith.

[00:16:06] Speaker 02:
and It sounds like his argument is that if you unilaterally cut a benefit that that Automatically is an issue of fact if you're doing it under this plenary discretionary power that you've reserved to yourself it sounds like

[00:16:27] Speaker 02:
I mean, you may have other responses, but it sounds like part of your response is, well, it can be an issue of law because we've got A through Y, which are so much more valuable than Z. So, Your Honor, I'm glad that you went right there because Mr. Berger is flatly wrong on the law.

[00:16:49] Speaker 00:
Okay.

[00:16:49] Speaker 00:
First of all, there is no implied duty of good faith.

[00:16:53] Speaker 00:
No duty of good faith attaches when all a party is doing is exercising its contractual right.

[00:16:59] Speaker 00:
And the best articulation of that is the Supreme Court's articulation in Badgett, the state Supreme Court, where they said, there cannot be a breach of the duty of good faith when a party simply stands on its rights to require performance of a contract according to its terms.

[00:17:15] Speaker 00:
that is all amazon did even if you accept that free whole foods delivery was a prime benefit at the time the plaintiff signed up the only one she cared about all amazon did was excite exercise its express contractual right which appears twice in the prime terms and

[00:17:32] Speaker 00:
removed that benefit.

[00:17:34] Speaker 00:
What Badgett says is there is no implied duty in that scenario.

[00:17:37] Speaker 02:
So they could, in your view, remove every benefit, say, except one?

[00:17:43] Speaker 00:
No, they could not.

[00:17:44] Speaker 02:
So how do you draw the line if your friend is wrong?

[00:17:48] Speaker 00:
So, Your Honor, I submit that that sort of counterfactual parade of horribles is not rhetorically very useful because we are nowhere near that scenario here.

[00:17:58] Speaker 00:
And in

[00:17:59] Speaker 00:
Oral argument before the district court, Mr. Berger candidly admitted that.

[00:18:03] Speaker 00:
He said to Judge Lynn, this is not a case where Amazon has removed too many prime benefits.

[00:18:08] Speaker 02:
That is not our case.

[00:18:09] Speaker 02:
No, no.

[00:18:09] Speaker 02:
I understand that.

[00:18:10] Speaker 02:
But you just said, if I'm hearing you correctly, that you can't have an unfair practices claim if all you're doing is doing what the contract permits you to do.

[00:18:21] Speaker 02:
And as I read the contract, it says that

[00:18:25] Speaker 02:
from time to time we may choose in our sole discretion to add or remove prime membership benefits, which would by its language include everything.

[00:18:33] Speaker 00:
No, it doesn't say remove all prime benefits.

[00:18:36] Speaker 00:
So if this were a case where we had taken away everything or 90% of it and all that was left was free photo storage, we would have a very different case.

[00:18:44] Speaker 00:
That is not what has happened.

[00:18:46] Speaker 02:
So if taking what you say is true, how do we divide the line between where

[00:18:56] Speaker 02:
Taking away is too much such that it's not amenable to summary judgment.

[00:19:03] Speaker 02:
But you've taken away so little that it is amenable to summary judgment.

[00:19:10] Speaker 02:
How would we or the district court draw the line there?

[00:19:13] Speaker 02:
Because you said taking away too much can be a violation.

[00:19:16] Speaker 02:
Taking away here isn't.

[00:19:18] Speaker 02:
What's the line?

[00:19:20] Speaker 00:
So, Your Honor, we're conflating a few things.

[00:19:22] Speaker 00:
So this idea that you could take away everything, in theory, goes to whether the contract is illusory.

[00:19:29] Speaker 00:
And what the law says is it's not illusory unless the party has literally no obligation to do anything.

[00:19:36] Speaker 00:
And that isn't our case.

[00:19:37] Speaker 00:
Amazon isn't saying that it could take away every benefit.

[00:19:40] Speaker 00:
So the contract is not illusory, and we're not even close to that line.

[00:19:45] Speaker 00:
The question you asked was, with respect to the implied covenant,

[00:19:49] Speaker 00:
where a company has discretion with respect to a particular term, does the implied covenant then intervene and say you have to exercise that discretion in good faith?

[00:19:58] Speaker 00:
And the answer to that is no.

[00:20:00] Speaker 00:
What Badgett says is there is no implied covenant question when all you're doing is standing on your contractual rights.

[00:20:06] Speaker 00:
So that's the first point.

[00:20:08] Speaker 00:
The second point is, and Mr. Berger misstated what Rector says.

[00:20:14] Speaker 00:
He quoted part of Rector with respect to discretion, but the part that he didn't quote

[00:20:19] Speaker 00:
was where the court said, and this is the Supreme Court sitting on Bonk, if a contract gives a party unconditional authority to determine a term, there is no duty of good faith and fair dealing.

[00:20:33] Speaker 00:
There is no duty of good faith and fair dealing.

[00:20:36] Speaker 00:
So Amazon has unconditional authority to remove a benefit or add a benefit.

[00:20:41] Speaker 00:
Let's not forget, Amazon adds benefits all the time.

[00:20:45] Speaker 00:
but it has unconditional authority to remove a benefit.

[00:20:48] Speaker 00:
There is no good faith question.

[00:20:51] Speaker 00:
Where discretion comes in, and Rector says this too, is where there's a hole in the contract, where there's a term missing.

[00:20:58] Speaker 00:
And what happened in Rector was there were two key terms.

[00:21:02] Speaker 00:
How many hours can a caregiver provide and what will the caregiver be paid?

[00:21:07] Speaker 00:
And DSHS had the discretion, its discretion later to fill in those two terms.

[00:21:13] Speaker 00:
What the court said was you have to do that in good faith.

[00:21:15] Speaker 00:
There's no gap in this contract.

[00:21:17] Speaker 00:
There is no hole in this contract The contract says we are going to give you this amazing suite of benefits this incredible suite of benefits worth way more than $139 a year and all Amazon reserves in exchange for that is the right to occasionally add a benefit or remove one There's no hole there

[00:21:38] Speaker 01:
Amazon has unconditional authority to exercise that so if I understand it correctly your position would be that even if the reason for removing the whole foods delivery benefit was somehow nefarious you know we

[00:21:57] Speaker 01:
We've decided we can't stand the managers at these six stores and so we're just removing this that that wouldn't make any difference because it's within your sole discretion so

[00:22:09] Speaker 00:
Your honor respectfully that's exactly right if Amazon decided we hate Dina Griffith for some reason we're not going to give her free Whole Foods delivery anymore What sole discretion and unconditional authority mean is Amazon can exercise that contractual right for any reason or no reason?

[00:22:24] Speaker 00:
That's exactly what badger said it's exactly what rector said and so there is no implied duty question here period

[00:22:32] Speaker 00:
There's also no contractual question here, because even if you accept the plaintiff's arguments, and free Whole Foods delivery was part of the Prime deal, we don't dispute that.

[00:22:41] Speaker 00:
Yes, it was one of the Prime benefits, and she got the benefit.

[00:22:45] Speaker 00:
Going back to what Your Honor asked earlier, you said, well, wasn't it true at the time she saw the ads?

[00:22:50] Speaker 00:
Yes.

[00:22:51] Speaker 00:
She said in early 2021, and granted, she's not very specific about what she saw.

[00:22:55] Speaker 00:
She said she gives some examples, and some refer to Prime, and some refer to Whole Foods.

[00:23:00] Speaker 00:
But take at face value, she saw something that said, prime includes free whole foods delivery.

[00:23:05] Speaker 00:
She signed up and that's exactly what she got.

[00:23:08] Speaker 00:
She used it several times over several months.

[00:23:11] Speaker 00:
And then she saw media.

[00:23:13] Speaker 00:
Now, she claims she can't remember a specific notice from Amazon, but she acknowledges in her complaint, she saw media coverage of the fact that the benefit was going away.

[00:23:22] Speaker 00:
And then in January of 2022, she placed an order.

[00:23:25] Speaker 00:
She saw the delivery fee and she made a choice.

[00:23:29] Speaker 00:
She could have chosen to pick the groceries up at the store and they would have been free.

[00:23:33] Speaker 00:
She could have canceled her order.

[00:23:35] Speaker 00:
Instead, she decided to pay 10 bucks to have her Amazon groceries arrive at her house.

[00:23:41] Speaker 00:
There's this mantra, and you heard it again from Mr. Berger, that she had no recourse.

[00:23:46] Speaker 00:
She was stuck after she got into the prime membership.

[00:23:49] Speaker 00:
That is false.

[00:23:50] Speaker 00:
She could have canceled her membership at any time.

[00:23:53] Speaker 00:
The very first subheading in the prime terms is membership cancellation.

[00:23:58] Speaker 00:
And it says right at the top, you can cancel any time by just going to your account settings.

[00:24:04] Speaker 00:
And she didn't.

[00:24:04] Speaker 00:
She didn't even try.

[00:24:05] Speaker 00:
She let her contract renew and then she enjoyed her prime benefits for another full year.

[00:24:12] Speaker 00:
Now, her response to that is, well, maybe I could have canceled, but I wasn't going to get a full refund.

[00:24:19] Speaker 00:
There are several responses to that.

[00:24:20] Speaker 00:
The first is that's not necessarily true.

[00:24:23] Speaker 00:
The fact that she might not have been entitled to a refund under the prime terms doesn't mean she wouldn't have gotten one.

[00:24:28] Speaker 00:
If she had called up, an Amazon customer service agent might very well have given her a refund.

[00:24:33] Speaker 00:
They do that all the time.

[00:24:34] Speaker 00:
That's how Amazon operates.

[00:24:36] Speaker 00:
But more importantly, we will never know because she didn't try.

[00:24:41] Speaker 00:
On this point, the Davis VHSBC case, Ninth Circuit case, addresses this exact point.

[00:24:49] Speaker 00:
In that case, the plaintiff said, I signed up for this credit card and I had no idea I was going to be charged an annual fee.

[00:24:56] Speaker 00:
And the court said, give me a break.

[00:24:58] Speaker 00:
It's right there in the terms.

[00:24:59] Speaker 00:
It says you're going to be charged a fee.

[00:25:01] Speaker 00:
Had you read the contract, you would have seen that.

[00:25:04] Speaker 00:
You chose not to read the contract.

[00:25:05] Speaker 00:
That's on you.

[00:25:07] Speaker 00:
But the plaintiff said, well,

[00:25:10] Speaker 00:
I didn't try to cancel, because had I canceled, it might, and even if I'd gotten a refund, it might have hurt my credit score.

[00:25:18] Speaker 00:
And what the court said was, and I like the way they framed it, they said, no, you still have to try to mitigate.

[00:25:24] Speaker 00:
And the question is, is mitigation reasonably possible, not is it convenient or costless?

[00:25:31] Speaker 00:
So here, Ms.

[00:25:33] Speaker 00:
Griffith can't be heard to say, well, I don't know what would have happened, and because I don't know, and because I might not have gotten a full refund, I didn't even try.

[00:25:40] Speaker 00:
What that does is it undercuts the unfair claim under the CPA.

[00:25:45] Speaker 00:
What the unfair claims under the CPA says, and this is Greenberg that sets this out, is that you don't have a claim for unfair conduct if you have reason to anticipate the harm, you have the opportunity to avoid the harm, and you have a potential to mitigate the harm.

[00:26:04] Speaker 00:
And at every step, plaintiff could have avoided the harm she claims she suffered.

[00:26:09] Speaker 00:
When she saw these ads for Whole Foods, and remember, it's not that she saw a Whole Foods ad and ran to Whole Foods to shop.

[00:26:16] Speaker 00:
She was already a Whole Foods shopper and presumably she still is.

[00:26:20] Speaker 00:
She says, I saw these ads for Whole Foods and I ran to sign up for Prime.

[00:26:25] Speaker 00:
Well, when she did that, had she read the prime terms, which she conceded she agreed to, she would have seen, oh, benefits aren't guaranteed.

[00:26:34] Speaker 00:
Amazon tells me that twice.

[00:26:35] Speaker 00:
She could have chosen not to sign up.

[00:26:37] Speaker 00:
So she could have avoided the harm in the first instance by, in one of the courts uses the term, aborting the sign-up process.

[00:26:43] Speaker 00:
The second opportunity was when she saw media saying, uh-oh, the Whole Foods delivery benefits going away.

[00:26:50] Speaker 00:
She could have not placed any more Whole Foods deliveries or she could have canceled her contract, but she didn't do that.

[00:26:56] Speaker 00:
Third opportunity was in January where she places an order and she's charged for it.

[00:27:00] Speaker 00:
She could have either chosen not to place it and gone and picked up her groceries, or she could have canceled her contract.

[00:27:06] Speaker 00:
And then in the year and a half after that, she could have canceled her contract and asked for a refund.

[00:27:10] Speaker 00:
She didn't do any of those things.

[00:27:12] Speaker 00:
And at each step, she could have avoided the alleged harm.

[00:27:16] Speaker 00:
And what that tells us is there can't be an unfair claim under Greenberg.

[00:27:19] Speaker 00:
So then all she's left with, and I'm not going to spend more time on the contract claims.

[00:27:23] Speaker 00:
I think we briefed those well.

[00:27:24] Speaker 00:
I think they're exceptionally weak.

[00:27:27] Speaker 00:
On the CPA claim, on the deceptive conduct, the first argument, and you heard it earlier this morning, is there's a long line of case law starting with Heywood v. Amazon that says, if all the company is doing is exercising an express contractual right, there cannot be a CPA claim, period, full stop.

[00:27:45] Speaker 00:
It is not unfair or deceptive to do what the contract says you can do.

[00:27:50] Speaker 00:
You don't have to go beyond that.

[00:27:52] Speaker 00:
But if you're inclined to, and you're inclined to credit this idea that she was misled by the ads,

[00:27:57] Speaker 00:
The ads don't say you're guaranteed this benefit in perpetuity.

[00:28:02] Speaker 00:
They don't say you get it for the duration of your prime membership.

[00:28:05] Speaker 00:
And so what Ms.

[00:28:08] Speaker 00:
Griffiths says in response to that is, well, you have to take in the net impression that's created by Amazon's marketing.

[00:28:16] Speaker 00:
You know what?

[00:28:16] Speaker 00:
We totally agree with that.

[00:28:18] Speaker 00:
And you know what's part of the net impression or the totality of the circumstances with Amazon's marketing?

[00:28:24] Speaker 00:
The prime terms.

[00:28:26] Speaker 00:
Again, the alleged harm here is not that she shopped at Whole Foods, it's that she signed up for Prime.

[00:28:31] Speaker 00:
So if you want to look at the totality of the circumstances, the courts use different terms.

[00:28:36] Speaker 00:
You have to read all of the disclosures in conjunction.

[00:28:39] Speaker 00:
What's the net impression that's created?

[00:28:41] Speaker 00:
That has to include the Prime terms and the disclosures in those terms that benefits might change.

[00:28:48] Speaker 00:
Your Honor, this is a contract case, pure and simple.

[00:28:50] Speaker 00:
Amazon exercised its contractual rights.

[00:28:52] Speaker 00:
That should be the end of the question.

[00:28:54] Speaker 00:
Thank you.

[00:28:55] Speaker 02:
All right.

[00:28:55] Speaker 02:
Thank you.

[00:28:56] Speaker 02:
And you have some time left for rebuttal.

[00:29:02] Speaker 04:
Thank you, your honor.

[00:29:05] Speaker 04:
I think we've just heard that Amazon reserves the right to start withdrawing, cutting, conditioning any of the benefits under prime at any time.

[00:29:16] Speaker 04:
And we've seen that.

[00:29:19] Speaker 04:
In fact, the courts have seen that.

[00:29:20] Speaker 04:
You know, they start putting ads on prime video.

[00:29:24] Speaker 04:
They suspend rapid delivery during the pandemic.

[00:29:27] Speaker 04:
They cut back the items on which they're giving free delivery.

[00:29:31] Speaker 04:
And so what is a consumer purchasing?

[00:29:33] Speaker 04:
A consumer is told they're purchasing certain things, but then they end up with a mystery bag.

[00:29:38] Speaker 04:
Every time they reach in, something different might be there.

[00:29:41] Speaker 04:
And the question is, at what point does that exercise of discretion by Amazon, this cutting and switching, become an abuse of discretion or unreasonable?

[00:29:55] Speaker 04:
Is it when they cut 50% of the benefits, 75%?

[00:29:59] Speaker 04:
That is a question for the jury and not something that should be decided on a motion to dismiss.

[00:30:06] Speaker 04:
And there doesn't seem to be any limit that Amazon has given the courts as a matter of law that would avoid the contract becoming illusory.

[00:30:16] Speaker 04:
And I respectfully disagree with counsel that all benefits would have to be eliminated for the contract to be rendered illusory.

[00:30:24] Speaker 04:
I don't think that's what the Washington cases that we've cited in the briefs say.

[00:30:29] Speaker 04:
And with respect to Badgett, you know, the fact in Badgett was that the bank didn't have any obligation

[00:30:36] Speaker 04:
to provide another refinance or another loan modification or extension.

[00:30:41] Speaker 04:
There simply was no contractual duty or obligation there.

[00:30:45] Speaker 04:
Here, there is a contractual obligation and the contract says, Amazon reserves some discretion to decide future contract terms, what service we're going to provide, and that's where the duty of good faith and fair dealing comes in.

[00:30:59] Speaker 04:
And with respect to Rector, I think it's necessary to go a step further down from Rector to Yosufian, which is the case cited in Rector for the notion that where there's unqualified or unconditional discretion under contract, there is no duty of good faith and fair dealing.

[00:31:21] Speaker 04:
Yosufian was a landlord-tenant case where there's no mention of discretion in the lease,

[00:31:29] Speaker 04:
The lieutenant wanted to assign the lease, and the contract said you can't assign the lease without the landlord's permission.

[00:31:38] Speaker 04:
And there was a line of case law saying the landlord has no duty to give permission to an assignment of a lease under Washington law where it's not provided for in the contract, and they can arbitrarily

[00:31:51] Speaker 04:
deny permission.

[00:31:53] Speaker 04:
And so that was what Rector was talking about by quoting Yousufian in terms of unqualified discretion, not where a contract says you have discretion.

[00:32:03] Speaker 04:
I do see my time is up.

[00:32:05] Speaker 04:
I would have responded on the refund claim more.

[00:32:08] Speaker 04:
But I will suffice to say that this is a case where the court should reverse the dismissal and remand to the district court for further proceedings and discovery on the Consumer Protection Act, breach of contract, and good faith and fair dealing claims.

[00:32:25] Speaker 02:
Thank you.

[00:32:26] Speaker 02:
All right.

[00:32:26] Speaker 02:
We thank counsel for their arguments.

[00:32:27] Speaker 02:
The case just argued is submitted and with that we are adjourned for the day.