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As the pandemic drags on and folks across the world remain inside, Americans have turned to Amazon to deliver many of the essential supplies needed to stock their homes during quarantine. Over the first quarter of 2020, Amazon raked in $76 billion in net sales (up from $60 billion over the same quarter in 2019), causing its shares to gain 26%. While Amazon was already a nearly universal go-to for online shopping, for many, Amazon has become a vital tool for staying supplied while remaining socially distant.
But what if the product you ordered is defective, broken, or worse, injures you? To whom do you complain? The manufacturer? Amazon? Well, as with many legal questions, it depends. It depends partly on where you live, and partly on the product you ordered. Pennsylvania, under a recent Third Circuit ruling now set for reconsideration, is poised to join Wisconsin as the only other state in the nation where shoppers can hold Amazon strictly liable for injuries caused by products sold on its website.
STRICT LIABILITY
Strict Liability is a legal doctrine that allows a person injured by a defective product to sue the manufacturer or seller for their injuries, even if the manufacturer or seller wasn’t negligent in manufacturing or selling the product. The manufacturer or seller will be held liable as long as the product is “in a defective condition unreasonably dangerous” to the user, consumer, or to their property.
The doctrine is premised on the idea that manufacturers and sellers are in the best position to compensate injured consumers and prevent injuries. The ever-looming threat of paying out a lawsuit incentivizes manufacturers and sellers to ensure that their products function as designed and don’t cause injuries or damage. While the specific verbiage and requirements for strict liability vary from state to state, all fifty states have strict product liability statutes and surrounding rules.
THE ONGOING DEBATE IN PENNSYLVANIA
The question of whether or not an online shopper can sue Amazon and hold it strictly liable for injuries caused by defective products is an ongoing debate taking place in the courts right now, and different courts have reached different conclusions.
The Third Circuit Court of Appeals held on July 3, 2019, that Amazon qualified as a “seller” under Pennsylvania law that could be held strictly liable for injuries caused by defects in products sold on its website. The case involved a woman who was rendered permanently blind in one eye when a dog collar she bought from Amazon broke, causing the leash to recoil back into her eye.
Defining Amazon as a “seller” is significant because, under Pennsylvania law, only “one who sells a product” can be held strictly liable for injuries caused by the product’s defects. Amazon argued that it was not a “seller,” but merely a service, providing an online marketplace for products sold by third-party vendors. The court disagreed, noting that because Amazon takes no precautions to ensure that its vendors are in good standing under the law, has no process in place to ensure that its vendors are amenable to legal process, and enables the vendors to structure and conceal themselves from liability through Amazon’s website, Amazon often leaves injured consumers with no avenue for legal redress. The court thus concluded that these facts, together with other equitable factors, justify finding that Amazon is a “seller.”
Although the Third Circuit recently decided to send the case back to the Pennsylvania Supreme Court to re-interpret the state law, if the Third Circuit’s decision is upheld, Pennsylvania will join Wisconsin as the only other state that allows shoppers to sue Amazon directly and hold it strictly liable for defective products that cause injury.
WISCONSIN STANDS ALONE
The District Court for the Western District of Wisconsin recently held that Amazon is a “seller” that could be held strictly liable. The underlying case involved a bathtub faucet adapter purchased on Amazon, which failed and caused a flood in a man’s home. Normally, under Wisconsin’s Product Liability Statute, a seller (e.g. Amazon) is only strictly liable for injuries caused by products if the manufacturer (a) has delegated its duty to design, manufacture, or place warning labels on the product to the seller (Amazon), (b) is not subject to service in Wisconsin, or (c) is judgment-proof.
Unfortunately for Amazon, the manufacturer of the faucet adapter was based in China and could not be served with a lawsuit. Additionally, Amazon stored, shipped, guaranteed delivery, and handled returns and refunds for the product. Thus, the court held that Amazon was a “seller” of the faucet adapter due to its integral role in the chain of distribution and because the Chinese company could not be served with the lawsuit, making Amazon the only avenue for compensation for the flooding.
However, other states disagree. New York, Ohio, Arizona, Illinois, Maryland (Fourth Circuit), and Tennessee (Sixth Circuit) have all held that Amazon doesn’t have enough control over the products it sells to be considered a “seller” for strict liability lawsuits. Even in Wisconsin, it would be likely that, for a product shipped entirely by a manufacturer located in the United States, the injured consumer’s only chance of recovery would be through the manufacturer, not Amazon. Indeed, the Third Circuit’s initial ruling in July last year rested heavily on the fact that the manufacturer of the defective dog collar could not be located or served with the lawsuit, making Amazon the only avenue for compensation.
THE LONG AND SHORT OF IT
Amazon has fought vigorously to oppose lawsuits that attempt to hold it liable as a “seller” of the products on its website. The company has largely been successful at limiting its exposure to damages for customers’ injuries caused by defective products.
If you are injured by a defective product sold on Amazon and live in any of the states that have agreed with Amazon that it is a “service provider,” rather than a “seller,” you will likely need to pursue recovery from the manufacturer of the defective product, rather than Amazon. But if you live in Wisconsin (or Pennsylvania if the Third Circuit’s ruling is upheld), you might be able to sue Amazon directly. This is a new, evolving area of law that is likely to see more changes as states, courts, and consumers grapple with the new way the world shops for goods.
If you have questions about a possible lawsuit or other matters related to legal representation, please feel free to call us at 608-490-9449 or contact us online.
Update (August 26, 2020):
Since the publishing of this article, another case was decided that agrees with Wisconsin. On August 13, 2020, the Court of Appeals for the Fourth District of California decided that, at least in some cases, Amazon is a “seller” that can be held strictly liable for defective products sold on its website. The case involved a woman who bought a defective laptop battery from Amazon’s website, which exploded, causing her third degree burns.
The woman sued Amazon and the manufacturer. However, the manufacturer, like those in the Wisconsin and Pennsylvania cases, was located in China and could not be forced into a U.S. court. Under such a circumstance, where an injured shopper is not able to recover from the actual manufacturer, the California court agreed that Amazon could be held strictly liable for the defective products it sells.
The court noted that Amazon had placed itself between the customer and manufacturer in the chain of distribution and that holding Amazon strictly liable “affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship.”
The Pennsylvania case is still yet to be decided. However, it appears that more courts are willing to consider that, at least in some circumstances, the most just outcome is to hold Amazon strictly liable for defective products. As online shopping only becomes more pervasive, this will be an ongoing development that will shape the way products liability cases are litigated throughout the U.S.