In August 2020, the California Fourth District Court of Appeals held that “Under established principles of strict liability, Amazon should be liable if a product sold through its website turns out to be defective.”
The case before the appeals court involved Angela Bolger, an Amazon Prime Member, who purchased a laptop battery from Lenoge, a third-party seller on Amazon. This battery was stored at an Amazon warehouse from where it was shipped to Ms. Bolger by free two-day shipping. The battery was shipped in Amazon’s branded packaging. About a month later, after becoming aware of some safety issues with Lenoge’s batteries, Amazon suspended and later blocked Lenoge from its platform. Shortly after Lenoge was blocked from Amazon, Ms. Bolger’s laptop battery exploded causing her serious injuries requiring a two-week hospitalization. Ms. Bolger filed suit in January 2017.
Three months later, Amazon emailed Ms. Bolger and other buyers advising that the Lenoge laptop battery “may present a fire hazard or not perform as expected.”
Amazon filed for summary judgment and the trial court granted it, holding that “Amazon was a provider of services by maintaining an online marketplace, warehousing and shipping goods and processing payments.” Ms. Bolger appealed.
Last month, the court of appeals reversed the trial court’s holding. The court of appeals found that “Amazon enabled Lenoge to offer the replacement battery for sale, inventoried and stored the replacement battery, accepted Bolger’s order for the battery, billed Bolger the purchase price for the battery, received her payment, retrieved the battery from its inventory, and shipped the battery to her in Amazon branded-packing.” Amazon acted like a conventional retailer. These facts were sufficient to satisfy application of the strict liability doctrine.
Amazon offers third-party sellers a platform to sell items that these sellers source, manufacture, and distribute. Amazon has fought liability for the sale of defective products by claiming it is not a seller. However, the court of appeals did not find this argument persuasive. Instead, the court found that Amazon “is a direct link in the chair of distribution, acting as a powerful intermediary between the third-party seller and the consumer…plays a substantial part in ensuring the products listed on its website are safe, it can and does exert pressure on upstream distributors to enhance safety, and it has the ability to adjust the cost of liability between itself and its third-party sellers.”
Amazon has extensive control over the products that are fulfilled in their warehouses. A third-party seller has to register its product to Amazon’s “Fulfilled by Amazon” program. If accepted by Amazon, the third-party seller can ship its product to Amazon’s warehouses and Amazon will be responsible for shipping the product to the consumer. The shipment includes Amazon packaging. If the product is returned by the seller, it is sent back to Amazon’s warehouse where it will be determined by Amazon if it can resold. Any needed communication between a consumer and third-party seller is filtered and monitored by Amazon. Through this program, the consumer does not have a direct relationship with the buyer; instead Amazon is the only enterprise with a relationship with the consumer. Amazon earns a profit from the third-party seller by collecting a fee for using its platform and an additional fee for registering its product with its Fulfilled by Amazon program, which includes a fee for storage and fulfillment.
Despite COVID-19, Amazon reported $88.91 billion in revenue by the end of July 2020. It is a convenient platform for consumers to shop for everyday needs without leaving their home. However, if Amazon is putting their consumers in danger by delivering defective products at the door steps of their consumers, it should be held liable. Read More about Amazon’s growing liability for defective products.
For assistance with injuries involving consumer products, contact us. SUGARMAN’s personal injury attorneys have experience in product liability cases. Call us at 617-542-1000, email info@sugarman.com, or fill out a Contact Form.