Subject: Sellers

District of New Jersey Finds Amazon to be “Seller” of Hoverboard under NJ Product Liability Act

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The District of New Jersey has held that Amazon may be sued under New Jersey law for defective products sold by third-party sellers through its online marketplace.

The dispute in New Jersey Manufacturers Insurance Group v. Amazon.com Inc., Civil Action No. 16-cv-9014, involved an allegedly defective hoverboard purchased from a third-party seller by an insured of plaintiff New Jersey Manufacturers Insurance Group (“NJM”) via Amazon.com.  NJM filed suit as subrogee of the insured, asserting a strict lability claim under the New Jersey Product Liability Act (NJPLA), in addition to claims for breach of implied warranty and negligence.

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

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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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Strike Two for Amazon in the California Court of Appeal

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

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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

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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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En Banc Third Circuit Sends Online Marketplace Liability Issue to Pennsylvania Supreme Court

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Last week the Third Circuit made its most recent move in the Oberdorf v. Amazon case: asking the Pennsylvania Supreme Court whether an e-commerce business – such as Amazon – is strictly liable for a defective product that was sold on its platform by a third-party vendor that the e-commerce business did not possess or own. Given the lack of clarity, and the “substantial public importance” of this issue, the Third Circuit asked the Pennsylvania Supreme Court to weigh in.

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