First-year law students around the United States learn in their introductory torts classes that any entity in the manufacturing, distribution, or retail chain of a defective product can be held liable for injuries that result from that defective product. But, in a recent ruling from the Southern District of New York, Amazon was relieved of any liability for an allegedly defective product that a consumer bought through the online retailer’s “Fulfillment By Amazon” service.
The plaintiff in the suit ordered a French press coffeemaker which was displayed for sale on Amazon’s website. He alleges that while washing the coffeepot, which was labeled as the “CoffeeGet 6 cup 27 oz. French Press Coffee Maker with thick heat resistant glass,” the glass shattered and caused significant lacerations to his hand, resulting in permanent nerve damage. Amazon presented evidence, unrefuted, that the coffeemaker itself was sold by a third-party operating under the name “CoffeeGet.” Though CoffeeGet paid Amazon to warehouse and deliver its products through Fulfillment By Amazon services, Amazon never actually took title of the coffeemaker, nor did it write, edit, or substantively review the information contained on the product detail page it hosted on its website.
Many lawyers and law students will recall classic products liability cases like Escola v. Coca Cola Bottling Co. of Fresno (1944), Greenman v. Yuba Power Products, Inc. (1963), and Vandermark v. Ford Motor Co. (1964). These three cases are notable for their introduction of strict liability theories of tort liability into cases concerning defective products, as well as for the California Supreme Court Justice, Roger Traynor, who wrote the influential concurrence in Escola and the controlling opinions in Greenman and Vandermark.
The court in this case joined a handful of other states in ruling that Amazon was neither a seller nor a distributor of the products listed on its website, and that strict products liability, therefore, does not apply.
Vandermark is particularly important in the context of Amazon’s case because it extended strict products liability to non-manufacturing retailers and distributors. Justice Traynor wrote: “In some cases the retailer may be the only member of [the overall producing and marketing] enterprise reasonably available to the injured plaintiff. . . . Strict liability on the manufacturer and retailer alike affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship.”
The question becomes, of course, whether Amazon should be considered a retailer or distributor of products listed by third-parties, especially when the third parties contract with it to provide Fulfillment By Amazon services. The court in this case joined a handful of other states in ruling that Amazon was neither a seller nor a distributor of the products listed on its website, and that strict products liability, therefore, does not apply.
The plaintiff in this case secondarily argued that Amazon should be held liable for breach of express warranty and misrepresentation, based on the information contained in the products detail page. However, the court disregarded this argument based on the fact that Amazon itself did not make a statement about the coffeemaker which constituted a warranty or representation of the product. Instead, CoffeeGet, the third-party, supplied the relevant information in that respect.
This case may also remind readers of a classic case in agency law, Butler v. McDonald’s Corp., in which there was a discussion of whether or not an agency relationship existed between franchisee and franchisor for the purposes of premises liability. Essentially, if McDonald’s Corp exercised enough control over the franchisee (e.g. in controlling the appearance of the restaurant, the menu items, and the overall “experience” of visiting the franchise), then apparent agency may exist if “(1)  the franchisor acted in a manner that would lead a reasonable person to conclude that the operator and/or employees of the franchise restaurant were employees or agents of the defendant; (2) that the plaintiff actually believed the operator and/or employees of the franchise restaurant were agents or servants of the franchisor; and (3) that the plaintiff thereby relied to his detriment upon the care and skill of the allegedly negligent operator and/or employees of the franchise restaurant.” Butler v. McDonald’s Corp., 110 F. Supp. 2d 62, 69 (D.R.I. 2000).
In the present case, though the third-party seller was listed on the product page, there exists an argument for apparent agency in the uniformity of format between Amazon listed items and third-party listed items that Amazon merely hosts, as well as the uniformity of delivery between Amazon products and third-party products utilizing Fulfillment By Amazon services.
This emerging trend of not holding Amazon liable for defective products that it allows to be listed on its website raises substantial policy questions. Specifically, does this trend show proper deference to the larger policy goals of tort law, including deterrence, loss distribution, corrective justice, and fair compensation to victims of unintentional negligence?