Federal Court Stays Class Action in Favour of Arbitration Clause: Difederico v Amazon

  • 21 décembre 2022
  • Irfan Kara & Adrienne Oake

In Difederico v. Amazon.com, Inc, 2022 FC 1256, the Federal Court enforced an arbitration agreement in Amazon’s Conditions of Use to stay a proposed price-fixing class action against the company. This decision is the latest in a growing body of case law in which Canadian courts have held that arbitration agreements and class action waivers in standard form terms of use are binding on potential class members.

The proposed class action alleged that Amazon had breached the Competition Act by conspiring with third-party sellers to fix the prices of their products on Amazon’s platforms. Ms. Difederico sought to represent the portion of the class who purchased products on Amazon’s e-commerce platforms. Amazon brought a motion to stay the claim by the e-commerce class in favour of arbitration.

In granting the stay, the Federal Court set out a three-part test to determine whether a stay should be granted in recognition of an arbitration clause:

  1. Is there an arbitration agreement in place?
  2. Does the Plaintiff’s claim fall within the scope of the arbitration agreement?
  3. Are there any grounds on which to deny the stay?

The Court concluded that there was a binding arbitration agreement in place that would cover the proposed class’s e-commerce purchases, and that there were no exceptional grounds on which to deny the stay. The Court also held that any challenge to the jurisdiction of the arbitrator or the validity of the arbitration clause was to be argued before the arbitrator.