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Amazon Skirts Potential Liability Precedent by Settling Personal Injury Case
Chaffin Luhana LLP
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In an unusual move, e-commerce giant Amazon has settled a product liability claim, paying the plaintiff an undisclosed amount for injuries she suffered because of an allegedly defective product purchased on the site.

The settlement brings to a close a case that was pending in the Pennsylvania Supreme Court and suggests the tide may be turning when it comes to Amazon’s liability.

In the past, Amazon has maintained that it is only a blameless advertising portal for other companies. Recent court decisions have challenged that position, however, with an increasing number of courts  finding the company can be held liable for selling defective products without warning consumers about the risks.

Amazon’s Usual Argument Starting to Hold Less Sway

In December 2014, a Pennsylvania woman purchased a Dogaholics collar on Amazon from a third-party seller (The Furry Gang). A month later, she was walking her 70-pound dog when the ring on the collar broke. The retractable leash snapped back and hit her in the eye, breaking her eyeglasses and causing permanent vision loss in her left eye.

The woman tried to find information on The Furry Gang, but couldn’t, so she and her husband filed a personal injury lawsuit against Amazon. Amazon argued the plaintiff’s claims were barred under the Communications Decency Act (CDA), which shields companies from liability for publishing third-party information.

According to Amazon, since the company  did not manufacture the product—it only provided a platform on which the third-party seller could advertise it—Amazon was not a “seller” under the law, but only a publisher of third-party content. Therefore, the company argued, it could not be held responsible for the plaintiff’s injuries. Amazon has used this same argument repeatedly and has largely escaped liability as a result.

The district court agreed with Amazon and in December 2018, granted the company summary judgment. “The Amazon Marketplace serves as a sort of newspaper classified ad section,” U.S. District Judge Matthew Brann wrote, “connecting potential customers with eager sellers in an efficient, modern, streamlined manner.”

The Plaintiff Appeals to the Third Circuit Court

The plaintiff appealed to the Third U.S. Circuit Court of Appeals (which serves Pennsylvania, New Jersey, Delaware, and the Virgin Islands), where her attorneys argued that Amazon was more than just a seller, and was involved in the sale process in its entirety.

The Third Circuit came back with a split vote 2-1 that Amazon was strictly liable for consumer injuries caused by defective goods purchased on Amazon.com. In the majority opinion, Judge Jane Richards Roth wrote that Amazon’s involvement in transactions “extends beyond a mere editorial function; it plays a large role in the actual sales process.” To the extent that the plaintiff’s claims relied on Amazon’s role as an actor in the sales process, she added, “they are not barred by CDA.”

The court later vacated that ruling and decided to rehear the case en banc—meaning that all of the judges (rather than just a select panel) would be present. In June 2020, the court decided to ask the Pennsylvania Supreme Court to review the case. The court agreed but never got the chance to share its opinions.

Amazon Rushes to Settle the Case Before Supreme Court Weighs In

Before the Supreme Court could weigh in, Amazon settled the case with the plaintiff. She told the Third Circuit Court on Wednesday, September 23, 2020, that the two parties had come to an agreement, putting an end to this case.

It seems clear that Amazon took this action to avoid a potentially dangerous precedent in Pennsylvania. Should the court have ruled in the plaintiff’s favor, it would have been much more difficult for Amazon to maintain its innocence where defective products are concerned.

Other verdicts, however, have already set change in motion. In September 2019, the U.S. District Court for the Western District of Wisconsin denied Amazon’s motion for summary judgment in a case concerning an allegedly defective bathtub faucet adapter purchased on the site. The court held that Amazon took on more than a peripheral role in putting the Chinese-manufactured product onto the U.S. market and that the CDA did not protect Amazon because its liability was not based on posting content from a third party.

In January 2020, in a case involving an allegedly defective remote control, the Southern District of Texas also found that Amazon could be a “seller” under state product liability statutes, noting that the company was integrally involved in and exerting control over the sales of third-party products.

In August 2020, a third court—the California state appeals court—found that Amazon played a pivotal role in every step of the purchase of an allegedly defective laptop battery, thus placing itself in the chain of distribution. It stored the product in its warehouses, received payment, shipped the product, and set the terms of its relationship with the third-party seller. “Under established principles of strict liability,” the court stated, “Amazon should be held liable if a product sold through its website turns out to be defective.”

Amazon stated it would appeal the decision.

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