Is Products Liability Closing In on Amazon?

In his Complex Litigation column, Michael Hoenig writes: Three decisions in July have ignited a potential firestorm of products liability exposure perhaps wider than the jurisdictions involved in the cases. Given Amazon’s huge product line, the numbers of purchasers and users, the diversity of the many third-party vendors, and the policy reasons articulated by these courts, it is likely that a flood of lawsuits lies ahead.

The July 4th celebrations notably include bedazzling fireworks displays. This year, however, there also were legal fireworks of a sort in and around July 4th. On July 3, the U.S. Court of Appeals for the Third Circuit held that Amazon could be subjected to strict products liability for defective goods that cause injury or damage. Oberdorf v. Amazon.com, 2019 U.S. App. LEXIS 19982 (3d Cir. July 3, 2019). Then, on July 5, the Sixth Circuit held that Amazon could be liable for damage and injuries caused by failure to warn the consumer about dangers of the product. Fox v. Amazon.com, 2019 U.S. App. LEXIS 20043 (6th Cir. July 5, 2019).

Why are these decisions in the nature of legal fireworks? Because, as we shall see, Amazon does not fit cleanly into the niche of being a “seller” of products—a usual requirement for strict tort liability to attach. Indeed, only a month or so earlier, the Fourth Circuit ruled that Amazon was not a “seller” subject to strict tort liability. Erie Ins. Co. v. Amazon.com, 2019 WL 2195146 (4th Cir. May 22, 2019). Indeed, in a number of prior litigations, Amazon had similarly prevailed. Yet, in late July, a federal district court in Wisconsin held that Amazon can be strictly liable for defective products sold by its marketplace vendors. State Farm Fire & Casualty Co. v. Amazon.com, 2019 WL 3304887 (W.D. Wis. July 23, 2019).

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