Strike Two for Amazon in the California Court of Appeal

A California Court of Appeal has held that Amazon may be strictly liable for injuries to customers who bought products from third-party sellers offered on Amazon’s website.  (See discussion of Bolger decision here).

In Kisha Loomis v. Amazon.com LLC, plaintiff sought damages from Amazon for burns allegedly caused by a defective hoverboard she purchased through Amazon’s website.  Amazon won summary judgment from the trial court, which held that Amazon did not fall within the chain of distribution and could not be liable under the “marketing enterprise theory.”

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A Cautionary Tale and a Wistful Remembrance About Settlement Security

Our language around settlements connotes war and peace – in settling we are “buying our peace” or “ceasing hostilities.”  The old saw is that a good settlement leaves no one satisfied, but in truth, a good settlement leaves nothing significant left to do in the dispute.  In abandoning claims or defenses, we seek a measure of closure.  And in obtaining a durable settlement our client can live with, we necessarily rely, to some extent, on the regularity of the underlying proceedings, candor to the court, and some minimal level of good faith in the negotiations.

What happens when that reliance is upended and those expectations are dashed?  A recent unpublished California decision provides a cautionary tale.  It also stirred memories of a flawed settlement from three decades ago, inspiring this reverie.

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Online Retailers Beware: Texas Supreme Court to Consider Whether Amazon Is a “Seller”

The Texas Supreme Court is set to determine whether Amazon can be considered a “seller,” and thus held liable, for a defective product sold through its website, in the case of McMillan v. Amazon.com, Inc., No. 20-20108, 2020 WL 7417454, at *1 (5th Cir. Dec. 18, 2020), certified question accepted (Jan. 8, 2021).

Amazon.com Inc. is the nation’s largest online retailer, selling and shipping millions of products every day. With the COVID-19 pandemic altering shopping habits, Amazon has become even more ubiquitous than ever. While many stores and online retailers struggled in 2020, Amazon’s sales skyrocketed 37% to a record $96.2 billion in the third quarter of 2020. But what happens when a product purchased from Amazon harms a customer? Can Amazon be held liable even if it has no role in designing or manufacturing the product? Courts across the country are grappling with this question, which undoubtedly will impact online retailers like Amazon for years to come.

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California Court of Appeal Finds Amazon Is Not Shielded from Liability for Defective Product Sold Through Its Website

In a decision that may impact future e-commerce, the California Court of Appeal held in Bolger v. Amazon.com, LLC that under California law, Amazon could be strictly liable for an allegedly defective battery manufactured by a third-party and sold on its website.  The Court further found Amazon was not immune from liability under the Communications Decency Act.  The Court reversed the trial court’s grant of summary judgment in favor of Amazon.

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