Products Liability Law Reporter

The Supreme Court of Louisiana, answering two certified questions, held that under the Louisiana Products Liability Act, the operator of an online marketplace is a seller of third-party products sold in its marketplace when it did not hold title to the product but had physical custody and controlled the transaction process. The court also held that the Restatement (Second) of Torts §324A applies to the determination of whether an operator of an online marketplace assumed a duty owed by a third-party seller and is liable for any damages resulting from the breach of that duty.

Archie Pickard purchased a battery charger through Amazon.com. The charger allegedly ignited a fire after malfunctioning, destroying Pickard’s home and causing him to suffer severe burns that led to his death. His survivors sued Amazon.com, Inc., in federal district court, alleging claims for negligent undertaking and under Louisiana’s products liability statute. The defendants moved for summary judgment, and the district court certified two questions to the Louisiana Supreme Court. First, the district court certified the question of whether, under the Louisiana products liability law, the operator of an online marketplace was a seller of a third-party product sold in its marketplace when the operator did not hold title to the product but had physical custody of it in its distribution warehouse and controlled the process of the product transaction through its product fulfillment program. Second, the court certified the question of under what circumstances, if any, would the operator of an online marketplace that voluntarily adopts safety procedures for the products sold through its website by third-party sellers be liable for injuries sustained by the purchaser of a defective product based on a theory of negligent undertaking.

Addressing the first certified question, the court found that the Louisiana Products Liability Act, La. Rev. Stat. Ann. §9:2800.52, applies to manufacturers. Under the statute, a manufacturer includes a seller when the seller exercises control over a characteristic of the product’s design, construction, or quality, and when the seller imports and distributes products of a foreign manufacturer as an alter ego. Moreover, the court noted, §9:2800.53(2) of the statute defines a seller as a person or entity who is not a manufacturer and who is in the business of conveying title to or possession of a product to another person or entity in exchange for anything of value. Citing case law, the court said that the term “possession” in the statute means physical custody and control of the product, without regard to ownership or any intent to own it. The court reasoned that the statute focuses on the manufacturer, rather than the seller, and liability may be imposed on a seller that acts as a de facto manufacturer. Its holding is limited to the term seller, the court added, noting that it expressed no opinion on whether the operator of an online marketplace is a seller in any other context.

Turning to the second certified question, the court noted that a claim of negligent undertaking is based on the assumption of a duty and that the Louisiana legislature had not specifically addressed a cause of action for the assumption of a duty. The court cited case law adopting the Restatement (Second) of Torts §324A and held that the section applies where an operator of an online marketplace assumed a duty owed by a third-party seller and damages resulted from the breach of that duty.

Finally, the court noted that it was rendering a judgment regarding Louisiana law and not resolving factual issues presented by the case at bar.

Citation: Pickard v. Amazon.com, Inc., 2024 WL 3218633 (La. June 28, 2024).

Plaintiff counsel: Janie L. Jordan, Nicholas M. Bruno, AAJ member Richard W. Mithoff, and Russell S. Post, all of Houston; and AAJ member Charles E. Tabor, Shreveport, La.