We are all familiar with online retailers like Amazon, which are involved in a huge number of sales of products. Whether under Maryland law Amazon can be sued for a defective product that it shipped to a customer was explored by the federal Fourth Circuit Court of Appeals in a recent case called Erie Insurance Company v. Amazon.Com Inc.
The appellate Court’s opinion indicates that a customer obtained through purchase on Amazon’s website a headlamp, which the customer then gave as a gift. The lamp had defective batteries that caused a fire, and the insurer for the homeowner who paid out damages attempted to sue Amazon for products liability under Maryland law, arguing that Amazon was a “seller” of the product liable under theories including negligence or strict liability. The trial judge ruled in favor of Amazon.
On appeal, the Court noted that the purchaser saw displayed at the time of purchase online that this product was “sold by: Dream Light” and “Fulfilled by: Amazon.” Amazon had an agreement with Dream Light called an “Amazon Services Business Solutions Agreement,” under which Amazon provided logistical services to sell Dream Light products. Dream Light would provide the lamp to Amazon to store in its warehouse, and when an order was placed Amazon would box and ship it to the customer, collect the purchase price and deduct its fee with the balance to Dream Light. The price and product description were provided to Amazon.
The Court held that to be a “seller” under Maryland law which could be liable for a defective product, the term seller referred to “owners of personal property who transfer title to purchasers of that property for a price.” Amazon, on the terms of this deal, was not a seller, just like a warehouse owner and delivery company. While the Court noted that sometimes Amazon did sell online property that it owned, and in such a case could qualify as a seller of property it owned. However, it was not liable for defective products that for which it facilitated the purchase of property it never owned.
Next time you make a purchase on Amazon, if you have such concerns be sure to see who is the seller of the product.
Thomas Patrick Ryan is a partner in the Rockville law firm of McCarthy Wilson, which specializes in civil litigation.