3rd-Party Seller Seeks Reconsideration of Arbitration Ruling in Amazon’s Favor

Former Amazon third-party seller Zongheng Domain Network Co. seeks the reconsideration of U.S. District Judge Jennifer Rochon’s Nov. 7 denial of its petition to vacate an arbitrator’s award in Amazon’s favor (see 2311090003), said its memorandum of law Monday (docket 1:23-cv-03334) in U.S. District Court for Southern New York in Manhattan in support of its motion to reconsider. Zongheng sought recovery of $508,000 in sales proceeds that Amazon seized, and the arbitrator let Amazon keep, when it deactivated the seller’s online store for allegedly manipulating customer product reviews (see 2305080023). The judge previously denied Zongheng’s motion to remand the petition to New York Supreme Court where it originated before Amazon removed it to federal court April 20 (see 2307210035). New evidence that came to Zongheng's attention in early November showing the “evident partiality and misconduct” of the arbitrator, Carol Heckman, warrants vacatur of the arbitration award and the remand of this case to the American Arbitration Association “for arbitration proceedings before an impartial decision maker,” said the memorandum. Zongheng alleges that Heckman failed to disclose that she previously ruled in Amazon’s favor in a 2020 arbitration involving another third-party seller, it said. The new evidence “exposes” her misconduct, which has prejudiced Zongheng’s rights “to a fair hearing and due process under the law,” it said. The AAA’s code of ethics requires an arbitrator to disclose “any interest or relationship likely to affect impartiality or which might create an appearance of partiality,” it said. “Once an arbitrator discloses that she or he ruled in favor of the sellers or Amazon, another party would not select him or her in the ranking list in the first place since parties already know their position or opinion concerning the same legal issues,” it said.