The U.S. Court of Appeals for the Third Circuitrecently handed down a decision in the matter of Oberdorf v Amazon.com, Inc., No 18-1041, 2019 U.S. App. LEXIS 19982 (3d Cir. July 3, 2019). In this ruling, the court considered whether the online retailer Amazon.com could be liable in product liability and in negligence for injuries allegedly caused by products placed within its market place by a third party manufacturers and distributors.The product at issue, a D-Ring dog collar was placed on the Amazon.com marketplace by a third-party vendor, and shipped directly to the plaintiff by that vendor.Amazon did not actually sell or ship the product.The third-party vendor in this instance, “The Furry Gang,” was not able to be located by the plaintiff following her injury.The plaintiff was injured when the D-Ring on her dog collar broke and the retractable leash recoiled to plaintiff’s face, permanently injuring her eye and blinding her.
In reaching its decision, the Third Circuit applied Pennsylvania law on products liability. Under that state’s laws, strict products liability could extend to Amazon as a “seller” of products. Amazon argued that it did not meet the definition of a “seller,” and thus could not face liability, contending that it merely provided an online marketplace for products sold by third-party vendors.The court looked to the Second Restatement of Torts § 402A, to analyze this issue.It noted that the basis of a rule limiting products liability to a seller of the product is rooted in the idea that vendors have a special responsibility for the safety of the public because they have entered into the business of supplying human beings with products which may endanger their safety.That rationale, however, does not extend to ordinary individuals who make an isolated sale.In that case, in the absence of negligence, liability would not attach.
The court weighed several factors before ultimately determining that strict products liability could attach to Amazon.Among these was the fact that Amazon was the only member of the marketing chain available for the injured plaintiff for redress.The court rejected Amazon’s contention that the third-party was readily identifiable, noting that pursuant to Amazon’s express agreement with its vendor, customers could actually only communicate with third-party vendors through Amazon.This enabled third-party vendors to conceal themselves from the customer.The court also reasoned that imposing liability on Amazon would encourage and incentivize the retailer to remove unsafe products from its website through its strong controls over its third-party vendors.Amazon’s unique position allowed it to be able to receive reports of defective products from consumers, which the court determined could lead it to remove such products from circulation. This ability placed Amazon in a much better position to prevent the circulation of defective products.Lastly, the court noted that Amazon was able to both adjust its commission-based fees with third-party vendors based on the risk that the third party vendor and its products might present, and also in its standard agreement arrange for indemnification from its third-party vendors.As such, Amazon was well able to distribute the cost of strict product liability. The mere fact that Amazon did not take title to, or possession of, the products sold by its vendors did not immunize it from liability, because under Pennsylvania law a “seller” of goods could also include a bailor, who similarly would lack possession.
Lastly, the court considered Amazon’s defense that claims against it were barred under federal law by the Communications Decency Act. This statute prohibits liability for entities as a result of their online publication.The court determined that the CDA barred some but not all of the plaintiff’s claims.The statuteholds that a provider of an interactive computer service shall not be treated as the publisher or speaker of information provided by another information content provider.This is called the CDA’s “Save Harbor Provision,” and is interpreted broadly under federal law.The provision essentially immunizes online computer service providers against claims of liability for the content posted by others. Pursuant to this law, such online service providers are not required to act in an editorial fashion as to posted content. However, the court determined that to the extent that the plaintiff’s negligence and strict liability claims relied on Amazon’s role as an actorin the sales process, they were simply not barred by the CDA. The allegations regarding the provision of an inadequate warning, however, were barred by this act.