Products Liability Law Reporter

The Third Circuit Court of Appeals held that Amazon.com, Inc., may be liable for strict liability in a claim brought by a customer who purchased a dog collar from a third-party vendor through Amazon’s online marketplace.

Heather Oberdorf bought a dog collar from Amazon.com’s third-party vendor, The Furry Gang. The Furry Gang shipped the dog collar directly to Oberdorf, who placed the collar on her dog. Subsequently, while she was walking her dog, the dog lunged unexpectedly, which caused the collar’s D-ring to break and the retractable dog leash Oberdorf was using to recoil and hit her face and eyeglasses. Oberdorf suffered injuries that left her permanently blind in her left eye.

Oberdorf sued Amazon.com, Inc., alleging strict products liability and negligence. The trial court held that Amazon was not strictly liable to the plaintiff, concluding that Amazon is not a “seller” under Pennsylvania law. The court also found that the plaintiff’s claims were barred by the Communications Decency Act (CDA) in that the plaintiff was seeking to hold the company liable for its role as the online publisher of third-party content.

Reversing, the Third Circuit noted that the Restatement (Second) of Torts §402A applies to strict products liability claims and limits strict liability to sellers of products. The court rejected Amazon’s argument that it is not a seller here in that its role in the transaction was to provide an online marketplace for a product sold by The Furry Gang, a third-party vendor. Citing case law, the court reasoned that several factors weigh in favor of imposing strict liability on Amazon. First, the court said, under Amazon Service’s Business Solutions Agreement, third-party vendors can communicate with customers only through Amazon, enabling those vendors to conceal themselves from customers and leaving those injured by their products with no direct recourse against the vendor. Moreover, the court said, Amazon has no vetting process to ensure that third-party vendors are amenable to legal process as was the case here, where neither Oberdorf nor Amazon was able to locate The Furry Gang after the incident.

Second, the court found that although Amazon does not directly influence third-party products’ design or manufacture, the company exerts substantial control over third-party vendors, including retaining the power to impose transaction limits or withhold payments to third-party vendors. Amazon, therefore, is capable of removing unsafe products from its website, the court said, adding that imposing strict liability would provide an incentive to do so. The court also found that Amazon is uniquely positioned to receive reports of defective products and can distribute the cost of compensating victims who are injured by such products.

The court noted that its conclusion is consistent with other Pennsylvania cases, including holdings that the term seller can extend to lessors and bailors and large retailers that offer a broad range of different products. Amazon is not exempt from strict products liability simply because its web site offers a variety of products, the court concluded.

Turning to the issue of whether the plaintiff’s claims for negligence and strict liability are barred by the Communications Decency Act, the court concluded that the law bars some, but not all, of the plaintiff’s claims. Under the CDA’s safe harbor provision, interactive computer services companies are able to perform editing on user-generated content without becoming liable for defamatory or unlawful messages. Citing case law, the court found that claims are precluded under the CDA where the plaintiff alleges the defendant owed a duty derived from the defendant’s status or conduct as a publisher or speaker.

Applying these principles here, the court concluded that although Amazon exercises an online editorial function, some of the plaintiff’s claims involve conduct by Amazon that involves more than the company’s editorial function, including its role in the actual sales process. Consequently, the court concluded that to the extent the plaintiff’s strict liability and negligence claims implicate Amazon’s role as an actor in the sales and distribution process, they are not barred under the CDA. Claims alleging that Amazon failed to provide adequate warnings regarding customers’ use of the dog collar, however, fall within the editorial function and are barred, the court held.

Thus, the court remanded.

Citation: Oberdorf v. Amazon.com, Inc., 2019 WL 2849153 (3d Cir. July 3, 2019).

Plaintiff counsel: David F. Wilk, Williamsport, Pa.

Comment: Similarly, in State Farm Fire & Cas. Co. v. Amazon.com, Inc., 2019 WL 3304887 (W.D. Wis. July 23, 2019), a federal district court held that Amazon can be held liable under Wisconsin products liability law for a product a third party sold to a consumer through Amazon. The court noted that although Amazon has transformed retailing in the United States, some Wisconsin buyers may have no recourse against foreign manufacturers and third-party sellers. The court said that particularly when Amazon provides order fulfillment services for third-party products, the company is considered a seller for purposes of Wisconsin strict products liability law. The court also held that Amazon is not immune from liability under the CDA. Teirney Christenson, Milwaukee, represented the plaintiff.

See also Erie Ins. Co. v. Amazon.com, Inc., 2019 WL 2195146 (4th Cir. May 22, 2019), holding that Amazon is not immune from tort liability under the CDA but that the company was not the seller of a headlamp purchased on its website from a third-party seller, even though the order was fulfilled by Amazon, which shipped the product to the customer.