Amazon: To Be Liable or Not To Be

On a presumably cold winter day in Pennsylvania in January of 2015, Heather Oberdorf came home from work ready to take her dog for a walk. About a month prior, she had purchased a dog collar from Amazon.com via a third-party vendor “The Furry Gang.” While taking the dog for a walk, the D ring on the collar broke, left permanently blinded in one eye.

Neither Amazon or Oberdorf were able to locate The Furry Gang or the manufacturer of the dog collar.

Oberdorf and her husband sued Amazon claiming they were strictly liable under Restatement (Second) of Torts § 402A(1)(a) (Am. Law Inst. 1965).

A seller under Pennsylvania product liability law is one “engaged in the business of selling . . . a product.” Oberdorf v. Amazon.com Inc., 930 F.3d 136, 156 (3d Cir. 2019).

 

strict liability casesOberdorf and the Case of the Defective Dog Collar

The District Court in Pennsylvania found Amazon not subject to strict liability claims, but the district court partially disagreed. The court applied a four-part test to determine whether an actor is a “seller”:

  • (1) Whether the actor is the “only member of the marketing chain available to the injured plaintiff for redress”;
  • (2) Whether “imposition of strict liability upon the [actor] serves as an incentive to safety”;
  • (3) Whether the actor is “in a better position than the consumer to prevent the circulation of defective products”; and
  • (4) Whether “[t]he [actor] can distribute the cost of compensating for injuries resulting from defects by charging for it in his business, i.e., by adjustment of the rental terms.”
Oberdorf v. Amazon.com Inc., 930 F.3d 136, 144 (3d Cir. 2019). Here, the Court found that Amazon met all four factors and that they could be held strictly liable for consumer injuries caused by defective goods purchased on Amazon.com.

 

Oberdorf. at 151. However, they did find Amazon not liable for providing a failure to warn, as those claims are barred by Section 230 of the Communications Decency Act. The CDA states, in relevant part, that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  Id.

Before the case could be heard by the Pennsylvania Supreme Court, it ended up settling out of court.

 

Strict Liability Cases Continue to be Imposed

More and more cases like Oberdorf have been popping up over the years regarding Amazon’s liability that show the Third Circuit’s decision in Oberdorf is becoming more common.

In 2015, a New Jersey man named Angelo Giancarelli bought two hoverboards off Amazon from the manufacturer Paradise 00.

The suit alleged one of the hoverboards caught fire at the home of his ex-wife, and her insurance company, New Jersey Manufacturers Insurance Group sued Amazon, asserting claims for strict liability under the New Jersey Products Liability Act (“NJPLA”), as well as breach of warranty and negligence. N.J. Mfrs. Ins. Grp. v. Amazon.Com Inc., Civil Action No. 16-cv-9014 (JXN) (MAH), 2022 U.S. Dist. LEXIS 115826, at *1 (D.N.J. June 29, 2022).

Amazon filed a motion for summary judgment and upon review by the New Jersey District Court, they found that like in Oberdorf, Amazon could be held strictly liable as a seller but that other claims were barred under Section 230.

 

strict liability cases

 

The Court used a similar analysis of what a seller is, concluding that The NJPLA specifically outlines those activities that the term “product seller” encompasses and added the broader language “or otherwise is involved in placing a product in the line of commerce.”

N.J.S.A. § 2A:58C-8. N.J. Mfrs. Ins. Grp. v. Amazon.Com Inc., at *13 (D.N.J. June 29, 2022). Amazon requested the Court to go beyond the statutory definition and they declined, saying they “will not presume that the Legislature intended a result different from what is indicated by the plain language or add a qualification to a statute that the Legislature chose to omit.” Id. at 14.

However, the Court did decline to attach liability to Amazon for breach and negligence as the NJPLA “does not recognize either negligence or implied breach of warranty as separate claims for harm caused by a defective product; those claims have been ‘subsumed within the new statutory cause of action.'” Id. at *23.

 

Section 230: Not a Total Bar?

The court in California agreed with the findings from Pennsylvania and New Jersey in the case of Bolger v. Amazon, LLC. Like Oberdorf and the plaintiff in N.J. Mfrs., here the plaintiff also bought a product off Amazon.com. Angela Bolger bought a replacement laptop battery off Amazon for a seller called “E-Life,” which was a fictitious name used on Amazon by Lenoge Technology.

Several months after receiving the battery, it exploded, and Bolger suffered severe burns as a result. Like the Plaintiffs in the previous cases, Bolger alleged strict products liability, breach of warranty, and negligence.

And like Oberdorf, the District Court sided with Amazon.

The appeals court, however, again like Oberdorf and M.J. Mfrs., found that Amazon is in fact strictly liable for defective products offered on their website by third party sellers like Lenoge.

Bolger v. Amazon.com, LLC, 267 Cal. Rptr. 3d 601, 604 (Ct. App. 2020). They found that under established principles of strict liability, Amazon should be found liable as strict liability, “affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship.” Bolger, at 439.

 

strict liability cases

 

However, distinguishing Bolger from the prior cases is that the court also found that Amazon is not shielded from liability because of Section 230.

Section 230, “does not apply here because Bolger’s strict liability claims depend on Amazon’s own activities, not its status as a speaker or publisher of content provided by Lenoge for its product listing.”

Bolger v. Amazon.com, LLC, 53 Cal. App. 5th 431, 439 (2020). This case represents a trend in cases where courts have declined to apply Section 230 to strict products liability claims.

In Erie Ins. Co. v. Amazon.com, the court found that “[t]he underpinning of Erie’s claims is its contention that Amazon was the seller of the headlamp and therefore was liable as the seller of a defective product. There is no claim made based on the content of speech published by Amazon — such as a claim that Amazon had liability as the publisher of a misrepresentation of the product or of defamatory content.” Erie Ins. Co. v. Amazon.com, Inc., 925 F.3d 135, 139-40 (4th Cir. 2019).

Similarly, the Wisconsin Western District Court held, “Amazon’s active participation in the sale, through payment processing, storage, shipping, and customer, is what makes it strictly liable. This is not activity immunized by the CDA.” State Farm Fire & Cas. Co. v. Amazon.com, Inc., 390 F. Supp. 3d 964, 973-74 (W.D. Wis. 2019).

Liability and the Future

Currently, there are a slew of cases against social media platforms such as Meta (Facebook and Instagram’s parent company) and Google (parent company of YouTube) alleging liability because of their algorithm pushing out harmful content. While social media companies have traditionally been exempted almost carte blanche under Section 230, it will be interesting to see if the courts take a similar approach that Oberdorf, N.J. Mfrs., and Bolger have- finding a company liable because of its own actions.

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