Petition to Vacate Arbitration Award Belongs in State Court, Says Amazon Seller
Amazon “failed its burden” to establish that the U.S. District Court for Southern New York in Manhattan has subject-matter jurisdiction over the case involving third-party seller Shenzhen Zongheng Domain Network, said the seller’s reply memorandum of law Tuesday (docket 1:23-cv-03334).…
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Shenzhen Zongheng wants its petition to vacate an arbitration award in Amazon’s favor remanded to New York County Supreme Court where it originated before Amazon removed it April 21 to the Southern District of New York (see 2304210001). Amazon deactivated the seller’s account and seized its $507,619 in sales proceeds for allegedly manipulating customer product reviews. An arbitrator ruled in January that Amazon was entitled to keep the money. The removing party “bears the burden of proving that the district court has subject matter jurisdiction,” said the seller’s reply memorandum in further support of the remand. A federal court’s subject-matter jurisdiction “can be established through either diversity jurisdiction or federal question jurisdiction,” and Amazon failed to establish either, it said. The U.S. Supreme Court, in its March 2022 decision in Badgerow v. Walters, “reasoned that a petition to vacate an arbitration award concerns the contractual rights provided in the arbitration agreement, which typically only raises matters of state law,” said the memorandum. “Adjudication of such state-law contractual rights typically belongs in state courts,” it said.