Amazon appeals product liability ruling to CA Supreme Court, citing ‘potentially vast blast radius’

Amazon argues that it shouldn’t be held liable for defects in products sold by others on its third-party marketplace, even when it holds and ships them from fulfilment centers such as this one. (GeekWire File Photo)

Amazon is asking the California Supreme Court to review an appeals court ruling in a landmark product liability case, seeking to avoid a precedent that would leave the tech giant open to legal claims over defective products sold by third parties through its online marketplace.

The company’s petition for review, filed Tuesday, argues that the appeals court took an “unprecedented leap” when it found that Amazon was not shielded from liability for a replacement laptop battery that allegedly exploded several months after purchase, causing severe injuries to the plaintiff in the suit, Angela Bolger.

“This Court has never extended strict liability to an entity that provides a forum or service used by others to sell their own products,” lawyers for Amazon write in the petition. “Yet the Fourth District Court of Appeal did both in an unprecedented opinion holding that, by providing a website where a third party sold its own product, Amazon is strictly liable for defects in that product.”

The company also cites the broader impact on others, calling the “blast radius” of the ruling “potentially vast” for the retail industry:

The Court’s amorphous notions of “facilitation” and “pivotal” services could apply to many marketplaces, both online and brick-and-mortar. Some of those  marketplaces — for example, eBay, Walmart, Wayfair, and Target — are large businesses perhaps better able to absorb the increased costs of strict liability. Others — for example, Postmates, Ruby Lane, Redfin, and Bonanza—are well-established but growing businesses. And thousands of others are small businesses hoping to satisfy the ever-growing demand for marketplace services that efficiently and effectively connect willing buyers and sellers. Imposing, for the first time ever, strict products liability on such service providers is not a sea-change a court should impose. The Legislature is the proper forum for making the difficult policy decisions necessary to expand liability beyond all recognized limits.

Amazon notes in the filing that a bill in California’s legislature, seeking to impose strict liability on online marketplaces, is likely to resurface again after it died in the prior session. The company calls that the appropriate forum for determining the issue. Amazon has said it would support the legislation if it is applied equally across the industry.

Competitors including Etsy have criticized Amazon’s stance on the bill, saying it would harm the company’s rivals disproportionately because of their smaller size, ultimately benefitting Amazon by eliminating competition.

The case at issue in the appeal involved a replacement laptop battery that was offered on Amazon by Lenoge Technology (HK) Ltd., operating under the name “E-Life.” Amazon handled the transaction and shipping from its warehouse, as it does for many third-party products under its Fulfillment by Amazon program.

However, as detailed in the court ruling, Amazon argued it was not liable because, in its view, it did not distribute, manufacture or sell the product.

In the earlier ruling, Judge Patricia Guerrero rejected Amazon’s stance, writing for California’s Fourth District Court of Appeal that Amazon “placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here.”

The appeals court’s ruling continued, “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. 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.’ ”

Amazon argues in its petition that those roles actually don’t mean it should be subject to liability in the case.

Lawyers for the plaintiff agree that the impact of the appeals court ruling would be significant. “It is impossible to overstate the magnitude of this ruling,” said the plaintiff’s lawyer, Jeremy Robinson, in a statement issued at the time by law firm CaseyGerry. “Consumers across the nation will feel the impact of this.”

Here is the full text of the company’s petition to the California Supreme Court.

Bolger v. Amazon – Amazon Petition for Review – CA Supreme Court. by Todd Bishop on Scribd

Source Article