Prime Time To Sue Amazon
Amazon has traditionally been exempt from various states’ product liability laws by successfully arguing that Amazon is not a “seller” when it comes to products sold by third-parties through Amazon’s website. Previously, a California Appellate Court overturned a lower court and ruled that Amazon.com played a pivotal role in every step of a plaintiff’s purchase of a replacement laptop computer battery on the online shopping website, making it potentially liable for the personal injuries caused when the battery malfunctioned. We blogged about this decision here.
We note that Pennsylvania appeared to be well on its way to determining that Amazon was a “seller” in accordance with Pennsylvania strict liability law. Specifically, a panel of the Third Circuit explicitly held that Amazon was a seller and could be held liable for defective products under some scenarios. We blogged about that decision here. Since that decision, the Third Circuit granted en banc review, vacating the panel decision. The Third Circuit certified the question to the Pennsylvania Supreme Court. However, before a decision on the same was reached, the parties settled.
Texas has joined the fray. In federal court, Amazon was sued alongside the erstwhile manufacturer of the alleged defective product. The manufacturer was a Chinese company and was unable to be served. At the close of discovery, Amazon moved for summary judgment, arguing that it was not a “seller” of products, it merely provided a marketplace for the sale. The district court determined that Amazon was indeed a seller under Texas law as it was “an integral component in the chain of distribution” and also, at one point, maintained physical possession of the product. Similar to the Pennsylvania case, the Fifth Circuit certified the following question to the Texas Supreme Court:
“Under Texas products-liability law, is Amazon a ‘seller’ of third-party products sold on Amazon’s website when Amazon does not hold title to the product but controls the process of the transaction and delivery through Amazon’s Fulfillment by Amazon program?”
This will be an interesting case to watch as Amazon is a dominant and ubiquitous force in the marketplace.
Thanks to Matt Care for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes.