California Finds Amazon On-the-Hook for Defective Goods

In this June 19, 2019 file photo, Amazon founder Jeff Bezos speaks at the John F. Kennedy Presidential Library in Boston. (AP Photo/Charles Krupa)

SAN DIEGO (CN) — A California state appellate court followed its federal predecessor in finding Amazon should face product liability claims for defective goods sold on its website by third-party vendors.

In a 47-page order, Fourth District of California Judge Patricia Guerrero reversed a finding by Judge Randa Trapp granting summary judgment in favor of Amazon in a product liability case brought by Angela Bolger.

Bolger bought a replacement laptop computer battery on Amazon sold by Lenoge Technology which was stored in an Amazon warehouse and shipped to her in an Amazon package before the battery exploded several months later, causing Bolger to suffer severe burns.

The online marketplace argued it couldn’t be liable for product liability claims because it did not distribute, manufacture or sell the exploding computer battery to Bolger. Trapp agreed, prompting Bolger to appeal the state court judge’s finding.

Guerrero found Amazon should be held liable for defective products offered on its website by third-party sellers like Lenoge, noting the website “placed itself between Lenoge and Bolger in the chain of distribution.”

“Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product and shipped the product in Amazon packaging to her,” Guerrero wrote.

She further emphasized Amazon “set the terms” by controlling customer information and receiving a fee on the purchase.

“Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer,” Guerrero added.

The decision in California follows the legal groundwork laid in the first successful product liability case against Amazon in federal court in Pennsylvania, where a woman who claimed she was injured and blinded by a defective dog leash purchased on Amazon initially won her own product liability appeal, only for the Third Circuit Court of Appeals to rehear the case and send it to the Pennsylvania Supreme Court this past June.

The case in Pennsylvania is still pending.

In an interview with Courthouse News, Philadelphia-based consumer lawyer Shanin Specter of Kline & Specter said he expects “the direction of the law will be in favor of consumers” as more product liability cases are filed against the online retail giant. 

“I think Amazon should be regarded as a supplier for the purposes of product liability law, because they assess the safety of their product, they possess the product when it comes through their premises on the way to the consumer, and, under principles of loss spreading, it is equitable to hold Amazon responsible if the product is defective,” Specter said.

“They’re no different than a big box retailer such as Walmart and no one doubts that Walmart is liable in the chain of product distribution,” he added.

Specter said “it would be good for everyone including Amazon” if it is held responsible for the safety of products sold on its website because consumers don’t necessarily pay attention to the Chinese company where the product is coming from, but trust the product is safe since it’s being sold on Amazon.

And those foreign third-party retailers are not bound by court judgments in the United States, meaning the only recourse for Amazon customers sold defective products is to sue the Seattle-based online marketplace.

Guerrero also emphasized that sentiment in her order, finding the website should be held liable for defective products sold by third parties on its platform.

“Amazon is the only member of the enterprise reasonably available to an injured consumer in some cases, it plays a substantial part in ensuring the products listed on its website are safe, it can and does exert pressure on upstream distributors (like Lenoge) to enhance safety, and it has the ability to adjust the cost of liability between itself and its third-party sellers. Under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective,” Guerrero wrote.

Specter further compared the third-party product liability cases against Amazon to the negligence cases attempting to hold rideshare companies Uber and Lyft accountable for unsafe drivers.

He noted Uber and Lyft “have mostly lost that battle” where they’ve argued in courts across the country they shouldn’t be held liable for negligent drivers because they only arrange rides for customers.

“In the long run the courts are going to hold Amazon responsible just as they have held Uber responsible,” Specter said.

Judge Terry O’Rourke and acting Presiding Judge Patricia Benke concurred with Guerrero’s order.

Bolger is represented by CaseyGerry attorney Jeremy Robinson, who in a statement on the firm’s website, called the case “the future of product liability law.” A firm spokesperson did not return an after-hours request for comment.

Amazon is represented by Perkins Coie attorney Julie Hussey who did not return an after-hours request for comment.

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