On original hearing, the panel found that Amazon could be considered the “seller” of a product sold thru it’s ‘Marketplace’ under Pennsylvania products liability law. “While Amazon may at times lack continuous relationships with a third-party vendor, the potential for continuing sales encourages an on-going relationship between Amazon and the third-party vendors. Moreover, Amazon is uniquely positioned to receive reports of defective products, which in turn can lead to such products being removed from circulation. Amazon’s website, which Amazon in its sole discretion has the right to manage, serves as the public-facing forum for products listed by third-party vendors. In its contract with third-party vendors, Amazon already retains the ability to collect customer feedback: ‘We may use mechanisms that rate, or allow shoppers to rate, Your Products and your performance as a seller and Amazon may make these ratings and feedback publicly available.’ Third-party vendors, on the other hand, are ill-equipped to fulfill this function, because Amazon specifically curtails the channels that third-party vendors may use to communicate with customers…. Amazon not only accepts orders and arranges for product shipments, but it also exerts substantial market control over product sales by restricting product pricing, customer service, and communications with customers…. Amazon contended that it should not be likened to a sales agent because it lists products and collects payment on behalf of various third-party vendors, whereas a sales agent typically represents a single seller or manufacturer. This is a distinction without a difference. Pennsylvania state courts have repeatedly found that large retailers who offer a range of different products are ‘sellers’ within the meaning of §402A. Amazon is not exempted from strict products liability simply because its website offers a variety of products.”

The panel then addressed the question of whether plaintiffs claims were barred by the Communications Decency Act (CDA), a Federal statute which provides that: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” This section, sometimes referred to as the CDA ‘safe harbor’ provision, precludes courts from entertaining claims that would place a computer service provider in a publisher’s role, and therefore bars lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions — such as deciding whether to publish, withdraw, postpone, or alter content. The Act is intended to allow interactive computer services companies to perform some editing on user-generated content without thereby becoming liable for all defamatory or otherwise unlawful messages that they didn’t edit or delete.

In this particular case, the panel found that failure-to-warm claims were preempted, while other product defect claims were not: “While we recognize that Amazon exercises online editorial functions, we do not agree that all of Oberdorf’s claims seek to treat Amazon as the publisher or speaker of information provided by another information content provider. As previously discussed, Amazon is a ‘seller’ of products on its website, even though the products are sourced and shipped by third-party vendors such as The Furry Gang. Amazon’s involvement in transactions extends beyond a mere editorial function; it plays a large role in the actual sales process. This includes receiving customer shipping information, processing customer payments, relaying funds and information to third-party vendors, and collecting the fees it charges for providing these services. Therefore, to the extent that Oberdorf’s negligence and strict liability claims rely on Amazon’s role as an actor in the sales process, they are not barred by the CDA. However, to the extent that Oberdorf is alleging that Amazon failed to provide or to edit adequate warnings regarding the use of the dog collar, we conclude that that activity falls within the publisher’s editorial function. That is, Amazon failed to add necessary information to content of the website. For that reason, these failure to warn claims are barred by the CDA.”

Judge Scirica concurred with the majority as to CDA preemption, but dissented with respect to the question of whether Amazon was a “seller” under Pennsylvania law.

On August 23, 2019, rehearing en banc was granted.

Oberdorf v. Amazon.com, 930 F.3d 136 (3d Cir. 2019), rehearing en banc granted, opinion vacated, 936 F.3d 182 (3d Cir. 2019).

(See also, e.g., Erie Ins. Co. v. Amazon.com, 925 F.3d 135 (4th Cir. 2019) (holding that the CDA did not protect Amazon from tort liability, but that it was not a “seller” of product listed by a third-party vendor on its website); State Farm v. Amazon.com, 390 F.Supp.3d 964 (W.D. Wis. 2019) (holding that Amazon was a “seller” under Wisconsin’s strict product liability statute, and was not immune from liability under the CDA))