ANOTHER COURT TAKES A SHOT AT FINDING AMAZON LIABLE AS A SELLER

Several recent suits have tried to find Amazon liable as a seller under state strict liability laws where defective products sold by third party merchants on Amazon have resulted in property damage or personal injury. So far the courts have found Amazon not liable as a seller under applicable state law and under Section 230 of the Communications Decency Act (CDA). 

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In the current case, Oberdorf v. Amazon.com (U.S. Dist. Ct. Mid. Dist. Penn), a woman was permanently blinded by a defective retractable dog leash purchased from a third party merchant on Amazon. The seller could not be located by the injured party in order to sue for damages.

The court rejected Amazon’s argument that Amazon was not a “seller” because it did not take title or possession of the leash from the third-party merchant. The court evaluated the following 4 factors in assessing whether Amazon qualifies as a seller under Pennsylvania law and found that each of these factors applies to Amazon:

  1. Whether Amazon is the only member of the marketing chain available to the injured plaintiff for redress;
  2. Whether imposition of strict liability upon Amazon serves as an incentive to safety;
  3. Whether Amazon is in a better position than the consumer to prevent the circulation of defective products; and
  4. Whether Amazon can distribute the cost of compensating for injuries resulting from defects by charging for it in its business.

The court also held that to “the extent that Oberdorf’s negligence and strict liability claims rely on Amazon’s role as an actor in the sales process, they are not barred by the CDA.” Under Sec. 230 of the CDA, online platforms are not treated as publishers of third party content and therefore cannot be held liable for that content.  Therefore, if claims are based on a failure to publish sufficient product warnings, this is a function of a publisher, and would be barred by the CDA.

The court remanded the case for further consideration by the District Court. Whether Amazon will ultimately be held liable for negligence or strict liability will have to be seen.

Bottom Line: These cases will keep appearing against e-commerce platforms. While Amazon has no problem footing the defense costs, other smaller e-commerce platform sites should take precautions to attempt to avoid these suits by reducing involvement in the sales process so as to further distance themselves from being considered a “seller” under applicable state negligence and strict liability laws.

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William Galkin manages GalkinLaw. Mr. Galkin has dedicated his legal practice to representing Internet, e-commerce, computer technology and new media businesses across the U.S. and around the world. He serves as a trusted adviser to both startup and multinational corporations on their core commercial transactions.

  
                                                                                                         
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