Amazon Sellers: How to File for Arbitration against Amazon
Aside from the fact that arbitration is cheaper and faster than litigating in a traditional court setting, Amazon actually requires all sellers to agree to binding arbitration as the method to resolve disputes.
Why Amazon sellers should & must arbitrate their disputes with Amazon
Pursuant to Amazon’s Business Solution Agreement…the contract each seller entered with Amazon:
“… each party consents that any dispute or claim relating in any way to this Participation Agreement or your use of the Services or Transaction Processing Services will be resolved by binding arbitration as described in this paragraph, rather than in court …”
The Participation Agreement directs sellers where to mail their Demand for Arbitration should they wish to file a claim.
First, you file it with the American Arbitration Association and provide their fee. Your arbitration will be conducted by the American Arbitration Association (AAA) under its rules which can be found on their website.
We have worked out a method to electronically file the Demand for Arbitrations with the AAA and obtain suspended Amazon Seller’s case numbers. The suspended Amazon Seller or Amazon Sellers addressing other issues can then pay the AAA fees with a credit card or send a paper check. This has streamlined the filing process and slightly shortened the time for a full resolution.
Next, you will follow Amazon’s directive:
“To begin an arbitration proceeding, you must send a letter requesting arbitration and describing your claim to our registered agent, CSC Services of Nevada, Inc., 2215-B Renaissance Drive, Las Vegas, NV 89119.”
File for Arbitration against Amazon – Demand for Arbitration:
To begin the arbitration process, a seller or their lawyer drafts a document, a Demand for Arbitration. The Demand for Arbitration is simultaneously filed with the American Arbitration Association and sent to Amazon at the address above.
The Demand for Arbitration is a document that describes the parties, outlines the disputes and states what you want the arbitrator to order.
Amazon sellers can demand money damages, seller account reinstatement or any remedy applicable to the situation.
The Demand for Arbitration must be thorough. If you leave out a claim, you could be barred from asking the arbitrator to address it. Chitagam Saluja, a Paralegal at Rosenbaum Famularo, PC recommends: “Retain an attorney if the amount of money or inventory warrants it because Amazon will have their attorneys on the case and you do not want to be at a disadvantage.” Paralegal Sean Law adds, “Once the matter is addressed by an attorney, the matter is often resolved prior to going to the arbitration hearing.”
We have seen many cases settle once Amazon’s lawyers review the cases. Amazon’s lawyers have the people they work with at Amazon review the case. If Amazon made a mistake, or numerous mistakes, with your Amazon Seller’s account, often the issues will be resolved without going through the entire Amazon arbitration process. We do not know if Amazon settles cases with sellers directly or with other law firms.
A Demand for Arbitration by an Amazon Seller should address several issues:
Amazon Sellers or their attorneys should do a thorough case analysis. The first step in drafting a Demand for Arbitration is to thoroughly analyze your case and the issues surrounding it. Some essential questions you should ask yourself are:
- What did Amazon do that you think is unfair?
- What did Amazon do that you think is wrong?
- If you were falsely accused of having related accounts, you must say so in your Demand for Arbitration.
Using your failed Plan of Action to draft your Demand for Arbitration
Most suspended Amazon Sellers can use their failed Plan of Action as a guide to drafting their Demand for Arbitration. They reality is that you are only going to arbitration because your Plan of Action failed to get your account reinstated.
Start with what you already have: your emails with Amazon. Almost every, if not all, correspondence between Amazon and Sellers is via email. Gathering all correspondence and organizing them by date is a great place to start and will help you draft a timeline for the Demand for Arbitration.
“Your Demand for Arbitration should be concise and persuasive. It should also explain how Amazon was unfair to you in a manner that a non-seller would understand” CJ Rosenbaum, Esq.
Before drafting your Demand for Arbitration, familiarize yourself with the Participation Agreement with Amazon. Amazon Sellers should specifically focus on the sections that are relevant to the specific issues. For example, if Amazon lost your inventory, can you show that you placed the right stickers? Can you confirm delivery to FBA?
Take the time to properly analyze your case to draft a concise and inclusive Demand for Arbitration. When you complete your Demand for Arbitration, it should be broad and inclusive because the arbitrator will ultimately grant or deny your relief based on what was stated in the demand. Anything that is left out of the demand is at risk of being barred from the case.
File for Arbitration against Amazon – Filing Fees:
The AAA has different filing fees that reflect the amount of monetary damages claimed by the filing party. There are no additional fees for seeking reinstatement. If all you seek is reinstatement, you would pay the lowest fee.
An arbitration proceeding has what is known as an “initial filing fee” (paid with the Demand for Arbitration), and a final fee (paid before the hearing is held). There is also a separate fee for the arbitrator.
“If the case can be brought seeking damages up to $75,000 and you are not seeking anything else, then you can file under the AAA’s expedited case rules. This means that your case will be heard much faster and will cost you much less money than other cases.” CJ Rosenbaum, Esq.
The AAA website has charts that outline the fee schedule when filing for arbitration. They offer 2 payment options:
- The Standard Fee schedule is a two-payment schedule that provides for somewhat higher initial filing fees but lower overall administrative fees for cases that proceed to a hearing.
- The Flexible Fee schedule is a three-payment schedule that provides for lower initial filing fee and then spreads subsequent payments out over the course of the arbitration. Total administrative fees will be somewhat higher for cases that proceed to a hearing.
Although the process outlined above seems relatively simple, we cannot emphasize enough the importance of drafting a clear, complete, and thorough Demand for Arbitration.
Any claim that is left out from your demand can be barred from recovery. Once your demand is filed, the fees are generally non-refundable.