Amazon Notches Another Win on Personal Injury Liability Relating to Third-Party Seller Products

For some time, we have been following the emerging case law on whether companies, such as Amazon, that create an online marketplace for other sellers, may be held liable when products supplied by those sellers cause injury. The cases have gone both ways, but on November 30 Amazon added another ruling to its win column when a New York appellate court upheld a ruling dismissing negligence and breach-of-warranty claims based on injuries allegedly caused by a defective service from a third-party provider on a product sold by a third party on Amazon’s website.

In Wallace v. Tri-State Assembly LLC (Case No. 2020-04820), the First Department of New York’s Appellate Division affirmed an order dismissing claims against Amazon by an individual who was injured after the handlebars on his electric bike came apart, causing him to fall. His father ordered the bike on Amazon’s website from a third-party seller in China, and at the same time purchased an assembly option from an Amazon-approved service provider, Tri-State. Plaintiff alleged that Amazon and its “agents” were negligent and breached warranties of fitness and merchantability.

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The Culpable Co-Defendant Problem: How to Preserve Your Client’s Defenses After a Culpable Co-Defendant Files a Motion for Summary Judgment in California State Court

Defense attorneys involved in California multi-defendant product liability lawsuits are familiar with the challenge of properly balancing the need to preserve their clients’ defenses with the strategic importance of maintaining cooperation among co-defendants.  In many cases, co-defendants’ interests are aligned, and they find the strategic benefits of cooperation outweigh any benefits of finger-pointing amongst one another.  Indeed, co-defendant infighting is risky on several fronts—it can help the plaintiffs, increase defense costs, create animosity among possible business partners, and chill future cooperation with defendants who regularly blame their co-defendants.  Inevitably, however, cases arise that involve a culpable co-defendant and a client wants to preserve its ability to attribute fault to the co-defendant at trial.  This issue becomes complex and the specific language of California Code of Civil Procedure Section 437c(l) comes into play when the co-defendant seeks no-fault summary judgment.

Section 437c(l) operates to limit the extent to which defendants can attribute legal fault at trial to defendants who were dismissed through no-fault summary judgment.  Specifically, Section 437c(l) provides that “if a motion for summary judgment is granted on the basis that the defendant was without fault, no other defendant during trial, over plaintiff’s objection, may attempt to attribute fault to, or comment on, the absence or involvement of the defendant who was granted the motion.”  Cal. Civ. Proc. Code § 437c(l).  In other words, remaining defendants cannot assert the empty chair defense to attribute legal fault to co-defendants who obtained summary judgment.

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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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