Amazon may be liable for defective products sold on its Marketplace in California, as determined by a court of appeals. This ruling suggests...
Amazon may be liable for defective products sold on its Marketplace in California, as determined by a court of appeals. This ruling suggests that if individuals in that jurisdiction purchase a defective third-party product from Amazon, Amazon may be liable. The California Court of Appeals for the Fourth District reversed a 2019 lower court ruling and reinstated the claims of a woman who claimed she suffered third-degree burns when a defective laptop battery she had purchased from a third-party vendor on Amazon caught fire.
The decision overturned a San Diego Superior Court ruling that the world's largest online retailer was immune from liability because it was acting as a service provider, a position that is not subject to California product liability law. In addition to selling its own inventory, Amazon allows third-party suppliers to list products for sale on its website. These suppliers may store their products in Amazon's warehouses or ship them directly to customers.
The decision could have dire consequences for Amazon, which has argued for years that it only acts as an intermediary between buyers and its third-party vendors on the Amazon Marketplace. To date, this position has shielded Amazon from Marketplace product liability. The company now faces several other lawsuits for defective products sold in other courts.
The plaintiff, Angela Bolger, claimed that she purchased a replacement laptop battery from Amazon from E-Life, a fictitious company name for Lenoge Technology Ltd. and a battery was shipped to her in packaging bearing the Amazon trademark. Bolger alleged that the battery caught fire several months later while the laptop was resting on her thighs, causing severe burns to her arms, legs and feet. She claims that she was never informed of the security problems that led to E-Life's ban from Amazon's platform.
In 2019, a first decision of a lower level court ruled that the platform could be held liable instead of the sellers for sales made through the Marketplace sellers:
"The question of whether a 'market facilitator' is strictly liable for the products sold on its website is one of the most important product liability issues since the doctrine was created almost 60 years ago. And while this determination may sometimes involve difficult questions of fact and law, in this case it is not. Amazon has done everything here, including promoting the battery as a product, acting as the sole interface with Ms. Bolger, storing the battery in California, shipping it to a California address, processing payment (keeping 40% of the product for itself), suspending and then banning the supplier due to product safety issues, and warning Ms. Bolger (far too late, unfortunately) against using the battery. Amazon also protected itself with an indemnity clause but failed to protect Ms. Bolger by allowing Lenoge to list its products under a false name and without a processing agent in the United States. Under California's product liability law and the social policies that support it, this is sufficient to hold Amazon liable, and the trial court erred in finding otherwise.
"There are also factual issues that can be adjudicated as to whether Amazon is negligently liable for failing to provide timely after-sale warning. The evidence shows that Amazon was aware of the dangers posed by Lenoge batteries but did not take any action until it was far too late. »
The California Court of Appeals has therefore upheld this ruling. In its decision, the Court of Appeals stated that Amazon was central to the sale of laptop batteries in the Bolger case. "Regardless of the term we use to describe Amazon's role, whether it is 'retailer', 'distributor' or simply 'facilitator', it was essential to bring the product to the consumer," the court wrote. Judge Patricia Guerrero noted that "under the principles of strict liability, Amazon can be held liable if a product sold through its site proves to be defective.
The Court of Appeal found that Amazon had played a central role at every stage of the plaintiff Angela Bolger's purchase of a replacement laptop battery from Amazon Lenoge Technology HK Ltd's third party vendor, which operated under the fictitious name "E-Life".
Amazon has faced numerous lawsuits seeking to hold the company liable for damage or injury caused by defective products sold by third parties, including those based overseas in China. While most courts have held that it is not a "seller" under the product liability laws of various states, a few decisions have gone the other way and allowed Amazon to be sued.
The Retail Industry Leaders Association (RILA), whose members include companies such as Walmart Inc. and Target Corp., said Friday it has joined more than a dozen trade groups to form a coalition to fight counterfeit products on online platforms such as Amazon.com Inc.
The lobbying push comes at a time when Amazon has been under close scrutiny by lawmakers and the White House for selling counterfeit goods.
In addition to RILA, the Toy Association, the American Apparel & Footwear Association, the Fashion Jewelry and Accessories Trade Association and other industry groups are also joining the coalition.