Calif. Court Rules Amazon Liable Like Other Retailers for Defective Products

By | August 14, 2020

Amazon.com can be held liable like other traditional retailers for injuries from defective products sold via its sprawling e-commerce marketplace, a California state appeals court ruled on Thursday.

The decision overturned a San Diego Superior Court ruling that the world’s biggest online retailer was shielded from liability because it acted as a service provider, which is not subject to California product liability law.

In addition to selling its own inventory, Amazon allows third-party vendors to list products for sale on its website. Such vendors may store their products in Amazon’s warehouses or ship them directly to customers.

From the California Court of Appeal opinion in Bolger v Amazon:

“As a factual and legal matter, Amazon placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here. Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her. Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase. Whatever term we use to describe Amazon’s role, be it “retailer,” “distributor,” or merely “facilitator,” it was pivotal in bringing the product here to the consumer.”

The appeals court found that Amazon played a pivotal role in every step of plaintiff Angela Bolger’s purchase of a replacement laptop battery from Amazon third-party seller Lenoge Technology HK Ltd, which was operating under the fictitious name “E-Life.” Bolger alleged that the battery burst into flames while she balanced the laptop on her thighs, resulting in severe burns to her arms, legs and feet.

“Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer,” the appeals court held.

Amazon has faced multiple lawsuits seeking to hold it responsible for damage or injuries caused by defective products sold by third parties, including ones based overseas in China, with most courts concluding it is not a “seller” under various states’ product liability laws. But a few rulings have gone the other way and have allowed Amazon to be sued.

Both Pennsylvania’s and Ohio’s top courts are currently considering the issue, and federal appeals courts are weighing cases under California and Texas law.

The case decided on Thursday drew friend-of-the-court briefs from plaintiff lawyer groups and corporate groups.

The ruling comes as California lawmakers weigh legislation that would put Amazon and other operators of online marketplaces on equal footing under the state’s strict liability law.

(Reporting by Lisa Baertlein in Los Angeles and Nate Raymond in Boston; Editing by Greg Mitchell and Dan Grebler)

Was this article valuable?

Here are more articles you may enjoy.