Can Amazon be Held Liable When a Product Malfunctions?
When customers buy products from Amazon, they assume those products will be safe. Indeed, consumers obtain millions of products from Amazon, including cell phones, e-cigarettes, dog leashes, and car headlights.
With Amazon’s growth, however, comes questions of liability. Imagine you obtain an e-cigarette battery from Amazon’s website. Later, that battery explodes in your pocket, setting your leg on fire. You’re taken to the hospital where you have to spend three days in the intensive care unit.
That’s just what happened to a Rhode Island man, and he subsequently filed a personal injury lawsuit against Amazon, as well as other defendants. In his complaint, the plaintiff alleged that Amazon participated in the delivery of the battery and that the company should have warned about the risks associated with it.
Amazon, however, has so far escaped liability in cases like these. The company holds to the argument that it is not a retailer or seller and therefore not liable for defective and dangerous products. Rather, according to Amazon, it simply provides an online marketplace that joins buyer and seller, so it can’t be held liable a seller or retailer if the products are not safe, or if they injure someone.
Now, three cases are pending in federal appellate courts related to this very issue. These federal appellate courts may uphold lower-court rulings—which found that Amazon was not a seller or retailer—but if even one decides in favor of the plaintiff, it could permit some customers to recover damages which were previously unavailable.
Amazon Not Seen as a “Seller” That Can be Held Liable
According to Amazon, if you buy something on Amazon, you’re typically buying from a third-party vendor. It’s one of the reasons Amazon has been so successful—the company doesn’t have to make most of the products it sells; rather, Amazon provides a platform through which other companies can sell them while taking a percentage of the profits.
The companies that sell on Amazon vary from individuals to small mom-and-pop stores to big-name retailers. Regardless of their size, however, they’re all considered third-party vendors. According to the numerous courts, one might think of Amazon like an auctioneer or newspaper classified ad section, providing an efficient and modern way for potential customers to find products from vendors.
Indeed, this was the determination of a Pennsylvania federal court, which granted summary judgment to Amazon in a case involving an allegedly defective dog leash. According to the plaintiff, she had purchased the leash on Amazon, and then while walking her pet, the leash malfunctioned, and struck her in the left eye, causing severe and permanent injuries.
The woman had purchased the leash from a third-party vendor named “The Furry Gang” via Amazon.com. She and her spouse tried to reach the vendor, but were unsuccessful, so they sued Amazon for damages, bringing counts of failure to warn and defective design, as well as negligence.
Amazon moved for summary judgment, arguing that it could not be considered a retailer for the seller under Pennsylvania law. The court agreed, noting that under Pennsylvania law, online sales listing services are not subject to liability laws affecting true “sellers.”
Amazon was deemed, instead, to be a listing service for the third-party vendor’s product, and therefore was not expected to determine the quality of that product. According to the court, since it also had no role in the selection of the goods sold, it couldn’t have a direct impact on the manufacture of the product.
Other courts have come to the same decision. In a case brought before the Tennessee District Court, plaintiffs claimed a hoverboard purchased on Amazon caught fire in their family home. They attempted to sue Amazon, but their case was also dismissed because Amazon was not deemed to be the “seller.” According to the court, Amazon didn’t manufacture or distribute the product, and therefore could not be held liable.
Plaintiffs tried to argue that Amazon was a “co-seller” acting as retailer and distributor because it exercised control over the sale, but the court determined Amazon had acted strictly as a mechanism to facilitate the interchange between the third-party vendor and the customer.
In yet another case brought before a Maryland Federal District Court, plaintiffs claimed a faulty headlamp purchased from Amazon caused a house fire. The court ruled that unlike a retailer like Home Depot, which can be held liable for selling such a product, Amazon was not liable because it stated clearly on the website that the headlamp maker, not Amazon itself, was selling the product. Again, Amazon was seen as the entity facilitating the sale and nothing more.
Amazon Cannot be Treated as a Publisher or Speaker of Third-Party Information
Plaintiffs have continued to attempt to hold Amazon liable for failure to warn and breach of warranties, with little success.
The Pennsylvania federal court, when ruling for Amazon on these claims, referred to the Customer Decency Act (CDA), which states that a website should not be treated as “publisher or speaker of any information provided by another content provider,” and therefore should not be held liable for negligence claims or for publishing advertisements for a third-party vendor’s product—material that came originally from the vendor.
The CDA has been similarly interpreted in other cases. In a sex trafficking lawsuit, for example, the plaintiffs sued an online classified ad website, alleging that they were trafficked through ads listed by third parties on the site. They argued the website should be held liable for their injuries because it created a forum to facilitate these types of ads.
But the United States Court of Appeals for the First Circuit determined that the website could not be held liable as the publisher or speaker of third-party content.
The court in the case of the dog leash came to the same conclusion and agreed that Amazon was barred from claims of misrepresentation or breach of warranties.
Something similar also happened in the hoverboard case—the plaintiffs tried to hold Amazon liable for failure to warn because they didn’t alert consumers about the explosion risks associated with hoverboards. The Tennessee federal court granted summary judgment to Amazon on all claims.
What If the Product is Manufactured in Another Country?
Over the past couple of years, there has been a significant increase in Chinese businesses using Amazon to sell directly to global customers, including those in the U.S. Amazon’s Fulfillment by Amazon (FBA) service helps speed up deliveries and manage customer expectations, allowing international sellers to more easily handle customs, warehousing, and distribution.
That means that customers are increasingly finding themselves purchasing products not only from U.S. and Canadian companies, but from China and other international countries, as well. These products ship directly from Chinese retail sites to Amazon holding areas and are then shipped out to the customer.
In other words, there is no middleman here except Amazon. This, in turn, can create problems when it comes to product liability. Whereas if a defective product is sold through American importers and distributors—who could be held liable for defective product defects—now such products are coming directly from other countries through Amazon.
This makes it extremely difficult if not impossible for consumers to recover damages should they suffer property damage or injury caused by a foreign-made product purchased on Amazon. The manufacturer is in another country, and U.S. courts generally have no jurisdiction outside the U.S. In addition, there is no importer or distributor to sue, since Amazon handles those tasks.
Amazon, then, is the only entity remaining to take responsibility for defective products coming from foreign sellers, but so far, Amazon has escaped that responsibility.
USA Today reported in 2017 that there were about 200,000 Chinese sellers on Amazon, and that number has likely increased significantly since then.
Plaintiffs Argue that Amazon is the Same as Other Retailers
In three of these cases described above— cases concerning the dog leash, the headlamp, and the hoverboard—plaintiffs appealed the lower-court decisions, and are now awaiting decisions in federal appellate courts.
They’re hoping for a different outcome—one that will allow them to recover damages from Amazon. They all argue that Amazon distributes products made by other companies, and therefore should not receive special treatment when it comes to liability.
Amazon argues that it’s fundamentally different from other retailers in that it provides only an online storefront and does not actually sell the products.
It remains to be seen if the courts will continue to agree.