New York Court Offers Opinion Behind ‘Bottom-Line’ Decision in Amazon Covid-19 Lawsuit

Judge Jed S. Rakoff of the Southern District of New York shed some light on a one-page decision rendered more than three months ago in the ongoing battle between Amazon and New York through its Attorney General Letitia James. 

On Monday, the court issued an opinion and order explaining the basis for summarily granting the attorney general’s motion for remand and denying as moot Amazon’s motion to transfer venue to the Eastern District of New York where Amazon’s declaratory suit is proceeding.

In that case, the parties have exchanged clashing dispositive motions in the last few weeks. The present dispute concerns James’ affirmative action against Amazon for failing to implement adequate worker safety protocols in response to the COVID-19 pandemic. The complaint also alleged retaliation on behalf of two workers who were fired for protesting the unsanitary warehouse working conditions.

In remanding the attorney general’s case to state court, Judge Rakoff held that the federal court lacked jurisdiction over the matter. Amazon first argued that James’ assertion of rights on behalf of two former activist workers, both New Jersey citizens, conferred diversity jurisdiction over the matter. The court rejected this allegation finding that New York was the real party in interest because while it sought back pay and emotional distress damages on behalf of the activists, the attorney general also asserted a right that it alone can enforce.

The court also analyzed whether removal to federal court was proper on preemption grounds. Judge Rakoff answered in the negative, partly because the Supreme Court has reportedly declined to find, among “the vanishingly few statutes,” that the Occupational Health and Safety Act and National Labor Relations Act completely preempt state law claims.

In the opinion, the court batted down Amazon’s argument under a four-part Supreme Court test considering whether a federal issue is raised, disputed, substantial, and capable of resolution by a federal court without disturbing the congressionally approved state-federal balance. The court applied the factors and found jurisdiction wanting.

Finally, the opinion rejected Amazon’s contention concerning the attorney general’s declaratory relief claims. “Amazon’s argument proves too much,” the court said. By the defendant’s logic, one with a federal defense could always maneuver its way into federal court, notwithstanding the Supreme Court’s repeated instruction that a federal issue must appear on the face of the pleading.

The order concluded by directing the clerk to close the case. The attorney general’s affirmative suit remains pending in state court as does Amazon’s declaratory relief suit in the Eastern District of New York.

Amazon is represented by Gibson, Dunn & Crutcher LLP.