Amazon settles six-year AWS kickback dispute with two managers

By Elena Vasquez

Amazon has ended a six-year legal battle with two former AWS managers, while a related case against Denver-based Northstar Commercial Partners remains set for trial on November 2.

The settlement resolves the claims against Carl Nelson and Casey Kirschner. Its terms were not disclosed.

What did the managers allegedly do?

Amazon’s 2020 lawsuit named the former managers and Northstar, a Denver-based real estate firm. It alleged that Nelson and Kirschner took kickbacks for arranging nine build-to-suit data center leases in Virginia worth hundreds of millions of dollars.

The kickbacks were delivered as “referral fees.” In a joint statement, the managers said they “regret their actions” and “apologize for failing to meet Amazon’s high ethical standards.”

They also said the payments broke Amazon’s code of conduct and put the company’s reputation at risk. Their statement acknowledged misconduct, but Amazon did not disclose the settlement terms.

How did the alleged referral fees work?

According to court documents, the fees were calculated as a percentage of what Northstar received on its Amazon leases. That tied the alleged payments to the value of the underlying real estate deals rather than to a fixed payment.

During Northstar’s business with Amazon, more than $5 million went to a trust owned by Kirschner’s brother, Christian Kirschner. The trust then transferred money to Christian Kirschner and other entities that funneled funds to Nelson and Casey Kirschner.

Amazon said the transactions inflated its costs. Northstar CEO Brian Watson baked fees into project budgets and inflated Amazon’s rent, according to the company’s account of the alleged scheme.

How did the court rulings change the case?

The litigation produced rulings in both directions. In 2023, a federal judge ruled that Amazon’s code of conduct was not an enforceable contract and dismissed most claims against Nelson and Kirschner.

Last year, the US Court of Appeals for the Fourth Circuit revived several claims and sent the case back to trial. The reversal returned multiple allegations to trial after the earlier dismissal, leaving the revived claims for adjudication.

For Amazon, winning the contract-enforcement point did not end the case. The Fourth Circuit’s revival put the company back into litigation over the nine Virginia leases and the alleged referral-fee chain.

Who still faces trial?

The settlement ends the managers’ litigation with Amazon. It does not end the case against Northstar, which was named alongside Nelson and Kirschner in the 2020 lawsuit.

Northstar’s trial date is November 2. The unresolved proceeding will decide the claims against the real estate firm, even as Amazon has settled with the two former managers who allegedly arranged the leases.

In a TikTok video, Amy Nelson, the wife of Carl Nelson, said all disputes between Nelson and Amazon had been resolved. Amazon confirmed the settlement but did not disclose its terms.

What changes for Amazon and data center leasing?

For Amazon, the immediate change is procedural: the six-year dispute with two former AWS managers is over, while the Northstar litigation continues. The factual dispute over whether project budgets inflated Amazon’s rent remains unresolved at trial.

For the data center leasing market, the remaining issues are concrete: how referral fees were calculated, where more than $5 million moved, and whether project budgets increased Amazon’s costs. The 2023 contract ruling and the Fourth Circuit’s later revival of several claims also leave the legal effect of Amazon’s code of conduct in dispute.