Court finds Amazon can face liability for defective products sold by third parties on its website

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Amazon can be held liable for defective products sold by third-parties on its website, a California state appeals court ruled Thursday in case brought by a San Diego woman injured when a laptop battery that she purchased exploded.

The decision by the California Court of Appeal’s Fourth Appellate District in San Diego is one of the few nationwide to reject Amazon’s core defense against third-party product liability — that it’s simply an online marketplace facilitator helping manufacturers reach customers globally, not a retailer or distributor subject to legal product liability law.

“Several cases against Amazon have been filed around the country, and Amazon has won almost all of them,” said Jeremy Robinson, a partner with the CaseyGerry, the San Diego law firm representing the injured woman. “This gives attorneys ammunition now across the country to say, OK, now their winning streak is no longer as good as it was. Now they have lost a case at the appellate level.”

Amazon plans to fight the ruling.

“The court’s decision was wrongly decided and is contrary to well-established law in California and around the country that service providers are not liable for third-party products they do not make or sell,” said a company spokesperson in an email. “We will appeal this decision.”

The ruling stems from a lawsuit filed by Angela Bolger, a Prime member. In 2016, she bought a laptop battery on Amazon distributed by Hong Kong-based Lenoge Technology Ltd. A few months later, the battery caught fire, causing significant injuries to Bolger’s hands. She spent two weeks in a hospital and still suffers today, said Robinson.

Bolger sued Amazon, Lenoge and others in early 2017 in San Diego Superior Court. The trial judge granted Amazon’s request to be dismissed from the case because it was not legally liable. Bolger appealed, and the appellate court on Thursday reversed the lower court’s decision.

Under California’s strict product liability doctrine, which applies to Walmart, Target and other retailers operating in the state, Amazon was more than just a facilitator in this instance, the appeals court ruled.

Amazon charged Bolger’s credit card and shipped the battery from an Amazon warehouse in Oakland. It arrived in Amazon packaging. Lenoge was participating in Amazon’s “fulfilled by Amazon” program, where customers who return products from participating sellers ship them back to Amazon.

“Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase,” the appeals court said. “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.”

Robinson said online buyers across the nation could feel the impact of the ruling.

“Obviously every state has different laws,” he said. “But I think it does have national implications in the sense that … plaintiffs can say the law is shifting now and is starting to figure out how Amazon has gamed the system. This case moves product liability law into the 21st century.”

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