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Fifth Circuit certifies question of whether Amazon is ‘seller’ that may be liable for third-party merchant’s defective product
April/May 2021The Fifth Circuit Court of Appeals certified to the Texas Supreme Court the question of whether Amazon is a seller that may incur liability for an injury from a third-party vendor’s unsafe product.
Morgan McMillan’s husband bought a remote control on Amazon.com. The product’s seller was listed as “USA Shopping 7693.” McMillan’s child later swallowed the remote control’s battery, necessitating surgery and resulting in permanent damage to her esophagus. Amazon attempted to contact the owner of the USA Shopping 7693 account, Hu Xi Jie, but was unsuccessful.
McMillan sued Amazon and Hu Xi Jie, alleging claims for strict liability, breach of warranty, negligence, and gross negligence. Hu Xi Jie failed to answer the complaint or make an appearance in the case. Amazon moved for summary judgment, arguing that it was not liable to the plaintiff because under Texas law, it was not the remote control’s seller. Amazon also argued that the Communications Decency Act barred the plaintiff’s claims.
The district court found that generally, nonmanufacturing sellers are not liable for defective products; however, the Texas Products Liability Act makes an exception where the product’s manufacturer is not subject to the court’s jurisdiction. The court denied summary judgment to Amazon, finding that the company was an integral part of the distribution chain in that it enabled the sale of the remote, had physical possession of the product, delivered the product, earned money from the sale, and exercised control over the transaction. The parties moved jointly to certify the district court’s order, and the district court certified its order for interlocutory appeal.
Reviewing the district court’s denial of summary judgment, the Fifth Circuit noted that the Texas Products Liability Act defines seller as someone engaged in the business of distributing or otherwise placing a product or product component into the stream of commerce for commercial purposes. Texas law, the court said, does not require a seller to hold or transfer title to a product. The court noted that although there is a lack of specific Texas cases on the subject at issue, the Texas high court may answer questions of law certified to it by any federal appellate court that is presented with a determinative question of Texas law that has no controlling Texas precedent. The court said that the case at bar presents a novel and unresolved question of Texas law with far-reaching consequences and that were it to make an Erie guess, this would involve more speculation than analysis and would not result in a precedential ruling that would benefit future litigants.
Accordingly, the court certified to the Texas Supreme Court the question of whether, under Texas products liability law, Amazon is a seller of third-party products sold on the company’s website when Amazon does not hold title to the product but controls the process of the transaction and delivers the product through the Fulfillment by Amazon program.
Citation: McMillan v. Amazon.com, 2020 WL 7417454 (5th Cir. Dec. 18, 2020).